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Speed Review: The Civil Corporation

The New Economy of Corporate Citizenship

by Simon Zadek

Speed Review: The Civil Corporation
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The Present and Future of Corporate Citizenship
Dr. Simon Zadek is a co-founder of the Institute of Social and Ethical Account Ability and the author of numerous books on the subject of corporate responsibility. The role of business in society has become one of the most important public interest issues of today, and The Corporate Citizen explores the underlying aspects of the social and environmental performance of corporations. Zadek writes that corporate citizenship is a direct outcropping of the dynamics of the New Economy, and suggests that the new civil governance will grow out of a web of local, national and international private-public partnerships.

Sustainable development is one of the most important challenges being faced by many companies today, and Zadek suggests that the global business community will have to undergo fundamental changes to address the issue. In The Civil Corporation, Zadek seeks to find out how much corporations should be expected to actively contribute to providing social and environmental benefits, and how this contribution should be realized. The first half of his book offers a close look at the rise and current state of corporate citizenship in the world, and the second half provides an assessment of his research and offers ways corporations can most effectively contribute to sustainable development.

So Much Good, So Much Bad
In just a few decades, people have become taller, faster and stronger. Developing countries are seeing dynamic jumps in life expectancy, adult literacy and declining infancy mortality rates. On the other hand, the natural environment is suffering while the climate is changing, half of the world's original forest cover has disappeared, and the use of natural resources is mushrooming, along with levels of waste and emissions. Examining how so much bad can exist in a world with so much good, Zadek presents the idea of corporate citizenship. He writes, "Corporate citizenship is about business taking greater account of its social and environmental - as well as its financial - footprints."

Based on current trends and the recent history of corporate citizenship, Zadek offers these skeptically optimistic peeks into the future of the corporate citizen:

  • Good practices by some corporations, even those that prove sustainable, will not alone ensure that the wider business community meets basic social and environmental standards. Zadek writes that market fragmentation "will limit the extent to which the wider business community follows corporations leading in improving their social and environmental performance, even where there is a competitive edge gained through such leadership."
  • Powerful dynamics driving the New Economy will tend to undermine good corporate citizenship, as well as those elements that tend to nurture it. Most attempts by businesses to enhance long-term business success through better social and environmental performance will not be sustainable unless they are rewarded financially through their markets and/or legislation.
  • Private standards could be either part of the solution or the problem, and will in practice be both. Zadek writes that we should not assume that private standards will push the change process into positive innovations, even if they are technically good standards. In other words, corporations will only shift toward better social and environmental performance if there is a competitive advantage to the good practices.

Corporations Must Lead
Zadek writes that civil corporations must take the lead in creating processes that are embraced by all businesses, and codifying best practices and building oversight that works to ensure implementation across the entire business community. The Civil Corporation provides evidence and research that makes these two points:

  1. Alliances of corporations have a far greater chance to sustain significant enhancements in social and environmental performance, and also to influence other market players to follow suit.
  2. Such civil alliances and partnerships will over time seek to codify negotiated agreements into more formalized governance frameworks.

The Civil Corporation provides a solid platform from which the responsibilities of corporations can be observed and reckoned with on a wider scale.

Why Soundview Likes This Book
Although Zadek's lofty language requires intense concentration to dig through, his sound points are specific, well-researched and worth the extra effort. By supporting his ideas on a foundation of pertinent factsand theories, he tackles the complex problems facing corporations today and creates an academic source from which further discussions of these crucial matters can take shape. The Civil Corporation lays thegroundwork that will help drive corporations to develop viable business strategies and practices that can enable businesses to address "the aspirations underpinning sustainable development."