The Content of Ethical Impact Reports: A Two-Tiered Proposal

Article excerpt

What measuring sticks would a healthy, meaning-oriented society use to gauge the performance of its mid-sized and larger-scaled economic entities? Just what information should an "Ethical Impact Report" for corporations contain? Before offering my own thoughts as to specifics on this important question, some general observations about the idea are in order:

First, although the TIKKUN-sponsored Social Responsibility Amendment rightly takes aim at developing criteria for evaluating current corporate practices, it ought to be recognized at the outset that the idea of an "Ethical Impact Report" need not be limited to corporations only: We should also seek to apply these criteria to government entities, as well as non-traditional corporations, such as majority worker-owned firms. An ethical impact report might help spur not only better behavior within some existing corporations, but also provide a means to critically evaluate-and improve-the praxis of the most widely discussed alternatives to the private corporation.

Second, it is clear that a meaningful ethical impact report must simultaneously avoid either (a) replicating the assumptions of standard business practice about what is necessary for corporations to do in order to compete in a market or (b) proposing wildly unrealistic standards of ethical conduct. Even if everyone in society today agreed it was important to start moving towards a meaning-oriented economy, important vestiges of present practice-such as hierarchy, excessive work stress, competing for prestigious positions-would remain for some time to come. An ethical impact report should aim to set a higher standard than present practice, while also recognizing that an evolutionary process for change will be needed-and that in many circumstances the market itself does place severe limitations on what corporations can do in the area of social responsibility.

Ethical impact reports might help move corporations to the best possible conduct given competitive pressures, but it still will be necessary to engage in a larger critique of those market pressures if the next stage of evolution towards a meaning-oriented economy is to be reached. Ethical impact reports are not the end-all of a long-term strategic vision: Failing to recognize this at the outset could lead to either creating criteria which are simply too "far out" for any present economic entity to relate to; or, alternatively, disillusionment when establishing ethical impact reports results in only partial improvement in corporate behavior.

Third, it should be recognized straightaway that while some corporations may respond favorably to ethical impact reports, especially if backed by the force of law as the Social Responsibility Amendment proposes, others will vociferously resist the reports and make vigorous use of the legal system to fight any punitive measures (such as losing a corporate charter) imposed by the state as a result of what an ethical impact report finds. More insidiously, still other corporations will respond to such reports by making cosmetic changes, or even manipulating their own data, so as to meet the minimum requirements for a decent "grade."

Fourth, it must also be recognized that while legally enforceable requirements regarding corporate behavior will necessarily tend towards quantitative assessments of a firm's impact, the most important criteria from a politics of meaning point of view will often be qualitative assessments-which will be necessarily subjective in some measure. …