Corporate Social Responsibility through Government Action: EBF's Autumn 2000 Forum and Winter 2000 Forum Revisited Sections Highlighted the Growing Pressures on Business to Be Socially and Environmentally Responsible. but the Opportunity for Companies to Work in Partnership with Politicians in This Area Is in Danger of Being Overlooked

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The role of business in society has never been so widely discussed. Much of the current debate centres on the notion that the authority of government has been diluted in the face of increasing corporate muscle.

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The argument runs that politicians are powerless in the face of the pervasive influence of multinational companies. This view has found supporters in both the developed and the developing world. It seems that the extremist view of the anti-capitalist movement--that corporate power outstrips that of national governments--is gaining mainstream allies.

Recently, attacks on global capitalism have been rehearsed and re-evaluated in a number of best-selling books. In 1997, David Korten described how things would look in When Corporations Rule the World. Two years later he expounded on life after capitalism in The Post Corporate World. One year on and Naomi Klein gave a compelling account of the power of brands in No Logo. Most recently, Noreena Hertz joined this group to depict the level of corporate influence on the political system in her book, The Silent Takeover--Global Capitalism and the Death of Democracy.

While all of these works are of great influence and merit, they all suffer from the problem of over-simplification. In trying to describe the pervasive influence of large companies they miss the other side of the argument. The fact remains that national governments--acting independently or in collaboration--retain a significant degree of monopolistic power over the activities of business. For example, in virtually all developed countries, government remains the largest employer. As such, government is able to influence the income and expenditure of a large proportion of GDP through its own activities. Beyond this, government has enormous power over business through legislation and taxation.

The debate about corporate social responsibility (CSR) that has been aired in previous editions of EBF has tended to polarise this argument about the relative status of business and government. On the one hand, we have heard Edward Kimman (Autumn 2000) argue for corporate political representation. In contrast, Viscount Etienne Davignon (Winter 2000) extolled the virtues of a voluntary corporate campaign to spread best practice in CSR across Europe.

What has so far been underplayed in the debate is the huge potential for business and government to work together to address some of the most pressing issues facing society. This is perhaps not surprising given the reluctance of national governments to articulate their expectations and requirements of business in delivering CSR initiatives.

This shortcoming was the subject of a recent study undertaken by Ashridge on behalf of The Copenhagen Centre (1). The report, 'Government as Partners' looked at the changing relationship between government and business in seven European countries. In particular, the research considered how and why national governments seek to work with business to promote social cohesion and combat social exclusion.

The starting point for understanding this emerging role of national governments is to appreciate the context in which they seek to deliver social welfare provision. Across Europe there has been a profound shift in the way in which public services are provided. The Keynesian notion of 'public goods' has largely been replaced by neo-liberal concepts of the free market.

Traditional ideas that government is in the best position to provide certain goods and services that benefit the whole of society have been modified to allow for the private provision of a variety of welfare services. Increasingly, business is called upon to enter into a wide range of partnerships with government--from large scale capital projects that involve public and private finance, through to the supply and delivery of welfare provision in healthcare, pensions, education and social housing. …