Tag Archive: ERISA


Well, I’ve got news for the bullies of Wall Street. The presidency is not a crown to be passed back and forth by you between two royal families.” – Former Maryland Governor Martin O’Malley

Let us wage a moral and political war against the billionaires and corporate leaders, on Wall Street and elsewhere, whose policies and greed are destroying the middle class of America.”Vermont Senator Bernie Sanders

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” – Former British Prime Minister Winston Churchill

Are the phrases “economic populism” and “social justice” not-so-clever disguises for a full-fledged War on Wall Street?occupy1

Is this another round of the disorganized/nearly forgotten desultory Occupy Wall Street movement now showered, deodorized and all dressed up to make it seem more palatable to the American public?

As we head into the 2016 presidential cycle, one needs to ask:

Is it sound politics, particularly for a general election, to directly take aim on a system in which 52 percent of Americans build their hard-earned wealth through the investment in stocks, bonds and mutual funds for an active retirement, their children’s college education, a second career or something grand on the “bucket list?”

Granted this slightly more than half figure is down significantly from the 65 percent of Americans owning stocks, bonds and mutual funds in the beginning of 2007, but that year was the beginning of the recession, downturn and economic malaise.

Some are questioning what happened to the middle class, but many are forgetting America’s burgeoning “investor class.” And with 52 percent of the public participating, it obviously applies to far more than just 1 percent of the American population. The more than half of all Americans owning stocks, bonds and mutual funds in 2013 could be even higher now because of the bull market.gender6

These are the people who invest in IRAs mainly with retail brokers in person or online (i.e., Schwab, Scottrade, TD Ameritrade, eTrade, Edward Jones) or designate a percentage of their pre-tax income in 401Ks with a percentage matching from their employer with taxes being deferred until retirement.

According to Gallup, they are for the most part college graduates as 73 percent of those with undergraduate degrees and 83 percent with graduate degrees invest in markets … that would be publicly traded companies on Wall Street.

Money Under the Mattress?

And why would they do that? Consider the alternatives:

How about under the mattress. How about no rate of return?

How about banks? How about 0.02 percent interest rates?

How about real estate? How about the prospect of underwater mortgages?

And you wonder why smart upper, upper-middle and middle class Americans with some disposable income invest in publicly traded American companies listed on the NYSE and NASDAQ, even though people can lose a portion or all of their investment? The answer is that Wall Street is the best game in town, and with knowledge, diversification, perseverance and a cast-iron stomach, literally millions of people build wealth by investing in our markets and our country.

“Unequal sharing of blessings” 

And what is the raison d’etre of these Wall Street companies? According to ERISA or the Employee Retirement Income Security Act of 1974, passed by a Democratic Congress, publicly traded corporations are legally and morally mandated to drive the bottom line (doing well) for the benefit of their shareholders.

Guess that means they hire hundreds of thousands of Americans and make the products that people around the world want and need. That even includes the upscale coffee, tablets, earphones, cameras, laptops, mobile phones, social media software and operating systems used by Occupy Wall Street and made by (gasp) companies publicly traded on Wall Street.occupy2

Almost DailyBrett senses a disconnect, but does it matter in a party primary when the empty vessels making the most noise have near zero chance of winning the nomination?

Looking down the road to the fall of 2016 would a presidential nominee really want to be saddled with a platform that takes “issue” with major employers of tens of thousands, providing wonderful products and the prospects of solid rates of return for investors? That doesn’t sound like a winning prescription.

It may make the union bosses happy. It may re-energize those with the need to demonstrate just like they did in 1968, but does it make any political sense to attack, demonize and vilify the proverbial goose that lays the golden egg?

Does Wall Street in the wake of Enron, Arthur Andersen, Bear Stearns, Global Crossing, Martha Stewart, $6,000 shower curtains, “Race Together,” Bernie Madoff, GM and Chrysler bailouts, BP Deepwater Horizon, excessive executive compensation have major real and perceived public relations problems? Does Wall Street need better reputation management? Absolutely.

At the same time, let’s not lose sight of Corporate Social Responsibility (doing good) and the literally thousands of companies that work to protect the environment (e.g., Starbucks and Conservation International), address climate change (e.g., Tesla), help rebuild communities (e.g., Home Depot and Habitat for Humanity), combat cancer (e.g., Nike founder Phil Knight and Oregon Health and Sciences University) assist low-income children with difficult medical conditions (e.g., Southwest Airlines and Ronald McDonald House) … ehh … wouldn’t that be McDonald’s as well?

For those attacking Wall Street indiscriminately under the banner of “economic populism” aren’t they guilty of throwing out the baby with the bath water.

Maybe they should be drinking their own bath water instead.

http://www.washingtonpost.com/opinions/hillary-clintons-guilt-by-association/2015/06/04/bd836dc4-0b13-11e5-a7ad-b430fc1d3f5c_story.html?wpisrc=nl_opinions&wpmm=1

http://www.cbsnews.com/news/poll-who-can-get-ahead-in-the-u-s/

http://www.brainyquote.com/quotes/authors/b/bernie_sanders.html

http://www.brainyquote.com/quotes/quotes/w/winstonchu101776.html

http://www.gallup.com/poll/147206/stock-market-investments-lowest-1999.aspx

http://money.cnn.com/2013/05/09/investing/american-stock-ownership/

 

 

 

 

 

 

“Public scrutiny of business is constant and intense, and in the past decade, disillusionment has grown over excesses in executive pay, questionable accounting practices, drug recalls, and moral laxity on the part of corporations.” — Paul A. Argenti, Professor of Management and Corporate Communication at the Tuck School of Business at Dartmouth College

Should communication students be encouraged to work for publicly traded companies either from inside the corporation or providing external advice as a hired gun at public relations or advertising agency?

Or should these very same students be galvanized against the excesses of capitalism, demonstrating against Wall Street under the banner of social justice?

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Are these questions mutually exclusive? Are you either for or against capitalism or for or against social justice?

These questions are magnified and intensified against the backdrop of underachieving employment, wage and real estate markets, while the NYSE and NASDAQ remain persistently bullish.

It appears this persistent economic scenario quite possibly will greet graduating students at least for the next academic year or two.

Examples of Corporate Excess

Finding examples of corporate excess is relatively easy.

Almost DailyBrett has joined the scads of other bloggers that take issue with seemingly brain-dead or just plain greedy antics by the leadership of large-cap publicly traded companies:

  • The author’s former company, LSI Logic, provided a seven-or-eight figure Golden Parachute to former CEO Abhi Talwalkar as he drove the 33-year-old specialty semiconductor designer into the abyss.
  • Spirit Airlines famously stiffed a decorated 76-year old, dying of cancer Marine veteran asking for a mere $197 refund, telling him literally to pound sand because he didn’t buy trip insurance. The carrier generously offered a partial credit, if he succumbed to the Grim Reaper before his flight.
  • October is right around the corner and that means (drum roll) even more corporate efforts to tie marketing bonanzas to Breast Cancer Awareness Month. Both 5-hour ENERGY and “Buckets for the Cure” KFC have become global leaders when it comes to “Pink Washing.”
  • Largest corporate bankruptcy-ever, Enron, is the poster-child when it comes to corporate greed and wrongdoing. And yet there were innocent people who were just trying to do their job, including telling the corporate story, until they realized they too were being misled.

Considering these examples and literally hundreds more, it is easy to give a broad-sweeping thumbs-down to multi-national corporations. At the same time, it should be remembered that these companies make the products and provide the services that we use on a daily basis (e.g., Apple = Macs, iPads, iPhones, iPods). They hire and provide benefits to literally tens of thousands (e.g., Boeing, 168,400; Starbucks, 160,000; Amazon, 88,400; Nordstrom, 58,140), Microsoft, 55,455). They provide wealth-accumulation prospects for the 54 percent of Americans who buy stocks, mutual funds and bonds (e.g., America’s investor class), including 73 percent of college graduates, and 83 percent of post-graduates.

Profit Motive

One of the major beefs espoused by the Occupy Wall Street movement three years ago, and the Flood Wall Street demonstrators earlier this month, is that publicly traded companies are focused on profits. These statements are accurate, but it should also be pointed out that companies have a legal (e.g., Employee Retirement Income Security Act or ERISA 1974) and moral (e.g., Fiduciary) obligation to produce the best bottom-line return possible for shareholders. Failure to do so invites almost certain civil and possible criminal litigation against the companies and potential dismissal of C-level executives.

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As a master’s degree candidate four years ago at the University of Oregon, the author of Almost DailyBrett noted the unrestrained celebration of competitive advantage and buy low/sell high mantra at the business school, and the unrestrained embrace of social justice including redistribution of income at the journalism school.

It seemed that one would build a statue of Adam Smith, while the other would throw flowers at the feet of Che Guevara. One would urge students to work and advise corporate America and the other would implore becoming an activist, marching, demonstrating and hopefully not being arrested.

Which is the better option for graduating students in making corporate America, particularly fallible publicly traded companies, more responsive to communities, the environment and let’s not forget, its own employees?

Corporate Social Responsibility

Corporate social responsibility or CSR should not be seen as an oxymoron. The concept of doing good (CSR) should not be viewed as contradictory to doing well (fiduciary responsibility). Graduates of communications, journalism and business schools can and should emphasize the value of doing BOTH to improve the bottom line for investors, including employees, while doing good deeds for communities, the planet and the rank-and-file employees.

Certainly the likes of Occupy Wall Street, which never found a unifying message, and Flood Wall Street, which tied capitalism to climate change, have their First Amendment Rights to (preferably) peacefully demonstrate. These NGOs need trained communicators and message developers.

Conversely, graduates could also choose to work internally to make companies better. They can stand for both fiduciary and corporate social responsibility. They can advocate against excessive C-level compensation. They can take stands against Pink Washing and Green Washing. They can ensure that the public is provided with good products at fair prices and everyone is treated with dignity and respect.

And heaven forbid, if another Enron is in the offing, they can courageouly tell the uncomfortable truth using their communication skills.

Is it better to be inside the corporation under the banner of capitalism or out in the streets (or in tents) calling for social justice?

There is more than one way to make corporate America better for everyone.

http://exec.tuck.dartmouth.edu/about-us/faculty/paul-argenti

http://www.huffingtonpost.com/2014/09/22/flood-wall-street-arrests_n_5865468.html

http://nypost.com/2014/09/22/climate-change-protesters-flood-wall-street/

https://almostdailybrett.wordpress.com/2014/01/02/farewell-lsi-logic/

https://almostdailybrett.wordpress.com/2012/05/06/lessons-from-the-spirit-airlines-pr-debacle/

https://almostdailybrett.wordpress.com/2012/05/02/evil-spirit-airlines/

https://almostdailybrett.wordpress.com/2013/10/10/5-hour-pink-washing/

https://almostdailybrett.wordpress.com/2014/05/22/shameless-5-hour-energy/

https://almostdailybrett.wordpress.com/2012/10/11/buckets-for-the-cure/

https://almostdailybrett.wordpress.com/2013/02/08/what-would-you-do-if-you-were-enrons-pr-chief/

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

https://almostdailybrett.wordpress.com/2011/06/03/adam-smith-vs-che%e2%80%99-guevera/

 

 

Executives are hired to maximize profits; that is their responsibility to their company’s shareholders. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they tried—and be replaced by managers who would restore profit as the top priority,” — Arneel Karnani, University of Michigan associate professor of strategy, Wall Street Journal, August 23, 2010.

“…It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest.” – Adam Smith, author of The Wealth of Nations.

Right now, the public is more likely to view greed as a deadly sin than an engine of economic growth,” Edward Glaeser, Harvard Economist, New York Times, January 6, 2009.

When push comes to shove, are corporate executives (especially at the C-level) more inclined to worship at the altar of fiduciary responsibility as opposed to corporate social responsibility (CSR)?

And conversely are public relations practitioners more inclined to counsel corporate social responsibility over fiduciary responsibility to these very same executives? And if so, is there a disconnect to the detriment of the corporate communicator? Is this a primary reason there are not more seats at corporate boardroom tables for PR pros?

The debate between fiduciary responsibility (maximizing profitability for investing shareholders) vs. corporate social responsibility (doing good deeds benefitting stakeholders in places where a company does business) is not new.

Nobel Prize winning American economist and academic Milton Friedman (1912-2006) took a Kantian stance (categorical imperative) toward a publicly traded company maintaining its fiduciary responsibility to its shareholders in his oft-quoted New York Times Magazine piece in 1970. Friedman said: “…A corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society.”

Echoing these sentiments is Harvard professor and former Treasury Secretary Lawrence Summers who stated: “It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too.”

Summers

Besides the Friedman Doctrine, there is the matter of law that is directly applicable when it comes to striving for profitability. The federal Employee Retirement Income Security Act (ERISA) of 1974 was passed to protect the retirement assets of Americans.

Specifically, the law defines a “fiduciary as anyone who exercises discretionary authority or control over a plan’s management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.”

Considering the overwhelming majority of securities are owned by institutional investors (buy-side and sell-side analysts purchasing stocks for retirement funds and big-ticket clients among others), the implied threat of regulatory action and/or liability to plaintiff strike suits aimed at deep pockets is obvious.

Also coming into play is the Nexus of Contracts Theory that posits that corporations are essentially a series of contractual obligations with stakeholders, such as the shareholders who provide capital (market capitalization or market value) to publicly traded companies in return for a potential monetary gain. Kenneth Ayotte and Henry Hansmann in their 2011 A Nexus of Contracts Theory and Legal Entities contend that a firm’s most valuable rights are its contractual assets. The question is whether a company can ethically risk running afoul of these contractual obligations in the pursuit of a higher public good?

Arneel Karnani, University of Michigan associate professor of strategy, is more aligned with Friedman than the growing movement toward CSR, particularly among the practitioners in the public relations community.  In his 2010 Wall Street Journal commentary, The Case Against Social Responsibility, Karnani states categorically that when push comes to shove executives with regularity will come down on the side of fiduciary responsibility for their shareholders and equity-holding employees. To do so otherwise, potentially impacts executive compensation, invites the eventual removal of the chief executive officer and chief lieutenants, prompts ERISA enforcement, and spurs almost certain litigation by the plaintiff’s bar on behalf of alleged aggrieved shareholders.

Fiduciary, imperative “must;” CSR, subjunctive, “should?”

The specter of these very real risks does not mean that CSR is not a factor in today’s boardrooms, even though Karnani uses the categorical words, “irrelevant or ineffective.” Karnani does acknowledge that the prospect of imposed additional costs—regulatory mandates, taxes, punitive fines, public embarrassment—on socially unacceptable behavior (see  2010 BP “Deepwater Horizon” debacle) can drive corporate executives to be at least mindful of CSR.

Karnani cites the global movement toward more fuel-efficient vehicles or healthier fast foods as being driven more out of consideration for profits (e.g. Toyota and McDonald’s respectively)  than a desire to reduce energy consumption and promote healthy diets. J.D. Margolis et al in their 2007 Does It Pay to Be Good? uses the anecdote of Home Depot building playgrounds as more of an effort to stimulate “Corporate Financial Performance” (CFP) as to demonstrate “Corporate Social Performance” (CSP).

According to these authors, all of these CSR activities are direct offshoots of the quest for profits and the maximization of shareholder value.  For example, Karnani said that pleas for corporate social responsibility will only be accepted by executives smart enough to realize that doing the right thing directly coincides with the pursuit of profit. “Pleas for corporate social responsibility will be truly embraced only by those executives who are smart enough to see that doing the right thing is a byproduct of their pursuit of profit,” Karnani wrote.

There is no argument about the mandated fiduciary obligation of publicly traded companies to maximize profits within the context of applicable laws and regulations for the benefit of their investing shareholders. Having said that, just blindly adopting Friedman’s deontological approach in rejecting CSR or Karnani’s skepticism ignore significant global trends in favor of Corporate Social Responsibility.

The Tide Turns?

Professor Charles W.L. Hill in his 2011 seventh edition of Global Business Today defined CSR as the idea that business executives should carefully consider the social consequences of economic actions when making business decisions. CSR advocates contend that businesses, particularly large multi-national enterprises (MNEs), need to recognize their noblesse oblige (Hill’s emphasis) and actually give back to the societies that make their economic success possible. Is this an Utilitarian approach, if shareholders do not receive the ultimate maximum financial return as a result of an increased emphasis on CSR?

Henry Mintzberg et al in their 2002 essay Beyond Selfishness argued that the terrorist attacks on Sept. 11, 2001 (at least for a short-period of time) changed the prevailing thinking of Wall Street denizens to actually consider engaging with society. Before the hijacked planes struck the World Trade Center towers and the Pentagon, the overwhelming focus was on the Internet bubble of the 1990s and the Enron-era rapid acquisition (“irrational exuberance” in the words of Alan Greenspan) of capital. “A society devoid of selfishness is certainly difficult to imagine. But a society that glorifies selfishness can be imagined only as base.”

One very clear trend in favor of CSR is the growing global respect for non-governmental organizations (increasingly seen as independent third-parties). Public esteem and trust for these NGOs has steadily increased. For example, the 2011 Edelman Trust Barometer revealed that not only are NGOs the most trusted in society, but their level of popular support is growing from 57 percent in 2010 to 61 percent in 2011. Certainly, the increasing public trust in these NGOs has prompted companies (e.g.Starbucks) to enter into “synergistic” relationships with these non-profits, such as Conservation International and the Environmental Defense Fund.

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The Edelman Trust Barometer reported that trust in business as measured by a quantitative survey of more than 5,000 “informed publics” grew marginally worldwide from 54-to-56 percent between 2010 and 2011, but actually declined in the US from 54- to-46 percent, and in the UK from 49-to-44 percent. Business trails NGOs in trust, but still leads the media, which only saw its trust score rise from 45-to-49 percent between 2010 and 2011.

The Edelman survey illustrated the stark difference when it comes to public benefit of the doubt between a company that is seen as trustworthy and one that is not. If a company is distrusted then it only takes on average only one-or-two negative Internet mentions for 57 percent to believe a particular item of negative information about a company. Conversely, if a company is trusted then it takes on average only one-or-two positive mentions for 51 percent to believe a particular item of positive information about a company. Edelman concluded that it was good business to align profit and purpose for social benefit.

Another reason for companies collaborating with environmental non-profits is to inoculate a firm against public attacks by more fundamentalist organizations that opt for confrontation rather than cooperation with corporations. For example, Global Exchange launched a protest at Starbuck’s annual meeting and demanded that the company sell more fair trade coffee. The company also was subjected to repeated instances of antagonism from Seattle Audubon and others.

Commenting earlier this year on the net effect of Starbucks CSR activities, Rick Cohen of the Non-Profit Quarterly wrote: “Whether one likes or dislikes Starbucks or its philanthropy, the Starbucks CSR model looks like a recipe that many corporations recognize as a solid formula for social responsibility.

And what is the present-day view of company employees if their employer is perceived to be only concerned with enriching its shareholders? This question was posed by Harvard Economist Edward L. Glaeser in his 2009 Can Business Do Well and Do Good?  He offered that the tide is turning against the Friedman Doctrine as business giants, such as Bill Gates and Warren Buffett, are increasingly arguing the value of CSR.

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This question was the focus of a MIT Sloan Management essay by C.B. Bhattacharya et al (2008) Using Corporate Social Responsibility to Win the War for Talent, which calls upon employers under pressure to attract-and-retain the best-and-the-brightest employees.

Bhattacharya advocates that corporations use internal marketing to champion a company’s CSR efforts as part of a portfolio of “job products” offered to valuable employees. The results of this additional motivation can contribute to job satisfaction, retention and higher productivity.

However, companies must learn to engage in CSR and communicate the news about these activities to its vital internal audience. Many times a company makes only cursory management statements along the lines of “we support recycling” or buries a one-paragraph mention of CSR activities as a throw-away in the text of a chief executive officer’s annual report letter (SEC filing 10K).

Bhattacharya et al state that CSR can serve as a “reputation shield” to parry negative thrusts by NGOs about a company’s impact on society. Knowledge of and employee participation in these CSR activities can also “energize” employees, stimulating them to work harder, be more productive and to focus more on quality. The latter can also contribute to fiduciary responsibility as Harvard Business Professor Michael Porter has argued that quality-driven differentiation along with lower costs are the two basic strategies for creating value for customers.

A corporation’s “reputation shield” has become even more tenuous in this age of 24/7/365 digital self-publishing. As a result, a company’s accumulated brand equity and carefully nurtured reputation are effectively traded every minute of every day online, just like a NYSE or NASDAQ security. And some of these traders are competitors or others that do not have a company’s best interests in mind.

Building up goodwill through being perceived as a solid corporate citizen may help mitigate broadsides by those who harbor different agendas.  The recent web disclosure that Burson Marsteller was secretly reaching out to bloggers to chastise Google on privacy concerns without disclosing its client, rival Facebook, turned out to be a black mark on the reputation and brand of both Burson Marsteller and Facebook.

A Balanced Approach?

The debate between the fiduciary responsibility adherents on one side and the devotees of corporate responsibility on the other is not new. In at least one case, the debate was longitudinally conducted by the same organization.

In 1981, the Business Roundtable concluded: “Balancing the shareholder’s expectations of maximum return against other priorities is one of the fundamental problems confronting corporate management. The shareholder must receive a good return, but the legitimate concerns of other constituencies (customers, employees, communities, suppliers, and society at large) also must have the appropriate attention…(Lead managers) believe that by giving enlightened consideration to balancing the legitimate claims of all its constituents, a corporation will best serve its shareholders.”

Sixteen-years later, the Business Roundtable completely reversed its field stating that a corporate board of directors cannot pit its shareholders against other stakeholders. The Business Roundtable said that imposing conflicting demands on corporate boards is unworkable and when push comes to shove between customers, employees and shareholders, a board must down on the side of shareholders.

Even though the debate is not new, the growing trend in favor of corporate social responsibility over merely adherence to fiduciary duties is gaining speed. For example, David Bach and David Bruce Allen in their 2010 What Every CEO Needs to Know About Nonmarket Strategy offer that non-market strategy recognizes that corporations are social and political entities, not just economic agents.

Glaeser wrote that company employees are becoming less enamored with the notion of working their entire lives only to pad the wallets of anonymous shareholders. Even though he agrees with Friedman’s doctrine that corporations “overriding moral obligation” is the fulfillment of fiduciary responsibilities and the maximization of shareholder wealth, he is also a fan of the notion of “Creative Capitalism.”

Michael Kinsley and Conor Clarke wrote the book Creative Capitalism, gathering the contributions of dozens of participants on the issue of corporate social responsibility, including Microsoft billionaire Bill Gates and Berkshire Hathaway billionaire Warren E. Buffett. Both offer counterpoints to the sentiments expressed by Milton Friedman, Larry Summers and others.

In particular, Gates has called for “market-based social change” and for doing the essential work that addresses the world’s inequities. “This kind of creative capitalism matches business expertise with needs in the developing world to find markets that are already there, but are untapped,” Gates said. “Sometimes market forces fail to make an impact in developing countries not because there’s no demand, or even because money is lacking, but because we don’t spend enough time studying the needs and requirements of that market.” The Bill and Melinda Gates Foundation has given $26.1 billion cumulatively, mainly for health and productivity improvements in the developing world.

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A Seat at the Table?

Regardless of the ultimate outcome of the fiduciary duty vs. corporate social responsibility debate, public relations practitioners — internal and external — are coming down reflexively on the side of Corporate Social Responsibility. The question is whether this is a wise personal public relations strategy, when PR practitioners have long complained about not being given a seat at the corporate board room table.

To gain a coveted seat, a budding corporate executive must command respect and exude gravitas. Certainly there is plenty of evidence in support of the growing trend toward CSR including the Edelman Trust Barometer, the notion of “Creative Capitalism” and increasing number of prominent executives who champion CSR. The danger lies in being seen as single mindedly arguing CSR, creating the dangerous perception of being oblivious to a publicly traded company’s fiduciary duties.

Karnani in his commentary issues the following warning: “In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.”

Public relations practitioners cannot exclusively sing the siren song of Corporate Social Responsibility without acknowledging and implementing the moral obligation of fiduciary responsibility to shareholders, equity-participation employees and to those who are genuinely interested in effective corporate governance (see Sarbanes-Oxley).

Fiduciary duties are legal-and-moral requirements for publicly traded corporations. Diversified shareholders are investing a portion of their future in the projected success of a company. Management is obligated to effectively respond to these investors.

At the same time, they are not the only stakeholders in society. That is where corporate social responsibility comes into the equation. A company doing business in a community does have an ethical responsibility to give back to society and to apply pressure to its supply chain to do the same.

Fiduciary and CSR are not mutually exclusive ethical requirements. Public relations practitioners need to worship at both altars. If not, corporate executives may stop listening before the public relations pros stop talking.

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