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Thursday, February 12, 2009

How far is too far?

I’ve been thinking a lot about legal issues and the impact on CSR. As I’ve written my past two posts, CSR Debate and Legal Doesn’t Equal Sustainable, there has been yet another issue that has come to mind.

If the legal framework defines acceptable business practice, it is only an incremental step to see legal consequences as an acceptable cost of doing business. So if the fine for breaking the law is outweighed by the commercial benefit, then it makes sense to break the law and pay the fine. Adding a component of risk assessment, and assuming you only get caught and found guilty a small percentage of the time, can make quite a compelling commercial equation for a company to knowingly break the law.

It is often quoted that there is no such thing as standing still in business. A company that sees only legal construct as defining good and bad is on this logical pathway to self destructive behavior. So what should we be doing instead?

Businesses should view following the law as only the minimum we need to do. Ethical companies and the executives within them should be staying well on the safe side of the law. Whiter than white should be the legal related objective, supported by an ethical approach that aspires to exceed and perhaps even to lead the legal definition of right and wrong. And, through our business dealings, our vendor engagement processes and our employment approach from the highest levels down, we should let our business partners and colleagues know that flying close to the wind with regard to the law is not an acceptable business or personal practice. That way we become the check and balance on each other’s ethics and we embark on an upward spiral into mutually supportive business relationships and public trust.

1 comment:

  1. Hi Kevin,

    Given your interest, you might find SustainAbility's report "The Changing Landscape of Liability" a good read.

    Hope you are well - will drop you a line next time I am in DC.