Magazine article Newsweek

Get Back to Business: Saddling Corporations with More and More Social Responsibilities Is the Wrong Move in Hard Times

Magazine article Newsweek

Get Back to Business: Saddling Corporations with More and More Social Responsibilities Is the Wrong Move in Hard Times

Article excerpt

Byline: Klaus Schwab

Where does corporate responsibility begin and end? In the old days the answer was clear: a corporation existed to make money. Social responsibility, if it was felt at all, was a matter for governments, charities and other social do-gooders. But lately, the answer has evolved considerably. Even before recent scandals, responsibilities that used to be the purview of governments--like fighting poverty, guaranteeing public health and protecting the environment--have been handed over to corporations, as if businesses were bottomless pits of money whose sole function was to provide social benefits to the world.

Now may be the time to re-examine these assumptions, because the role of business has become confusing. In this era of slowing economic growth, we must re-embrace the wealth-enhancing, job-creating role that business plays in society. And business leaders must once again take the lead, offering up an assertive, positive vision of their function in the world at large.

To be sure, the confusion did not arise overnight. The scandals of recent years severely eroded the image of the business community. As stock markets tumbled, middle-class families watched much of their wealth evaporate, leaving many rightfully resentful of the business leaders to whom they had entrusted their family savings. Many people now genuinely worry about their retirement, or whether their children will find work.

Like many people, we at the World Economic Forum welcome some elements of the corporate responsibility movement. …

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