The UK is the first
European country to have appointed a minister for corporate social
responsibility. Ethical Performance talked to Kim Howells about his
early thoughts on the role of government in helping business promote
CSR policies
Business ethics leapt up
the policy agenda when Stephen Byers, the trade and industry secretary,
announced in March that one of his junior ministers, Kim Howells, was
to become minister for corporate social responsibility.
This new responsibility follows the recommendation of a team from the
government’s Social Exclusion Unit, and will be shouldered by Howells
in addition to his existing duties on corporate and consumer affairs.
In that existing role he has been a powerful voice for consumers,
complaining publicly about anything from mortgage mis-selling to the
price of soft drinks in pubs. But in his first statements since taking
up his new duties, the minister has been at pains to calm any concerns
in the business world that his job is to be an ethical policeman.
He does not even like the term ‘ethics’.
‘I am an enemy of the term ‘ethics,’ he says. ‘None of these subjects
are easy – they are not arguments that are subject to facile solutions,
still less to politicians standing up and saying what’s ethical.’
Howells cites Barclays’ recent branch closures as an example: ‘They
made a business decision that could be described as ethical because
they want to stay in business. They have a duty to their employees to
remain viable, as well as to communities.’ And he adds that the overtly
ethical Co-operative Bank was the first to leave the high street in his
constituency town of Pontypridd.
The minister does not
believe the state can do better than the market and says he will merely
do his best to persuade companies it is in their own interest to look
after employees, care for communities, reduce their impact on the
environment and ensure children are not making their products in third
world sweatshops.
Persuasion will be based on the by now
well-worn message that corporate social responsibility (CSR) is good
for shareholders because irresponsible companies will be exposed and
suffer financially.
‘I believe there are good commercial
reasons for CSR and the government can facilitate the case and
publicise examples of good practice,’ says Howells. ‘But there is
absolutely no point in us laying down rules if the net effect is to
bankrupt businesses. You can’t force firms to behave more
compassionately.
‘Ultimately they are commercial companies
and will make decisions about the way they see [social issues]
affecting their shareholders. But there is a wider community they have
got to be concerned about.’
Despite his market
orientation, Howells has a blunt message for those companies that
believe business is most responsible when it concentrates on making
money, leaving the government to look after social issues.
‘They are missing a trick,’ he says. ‘There is value to be added by being socially responsible.’
Reputation, rather than ethics, is the minister’s watchword. Using a
story that he has already cited in a handful of public appearances in
his CSR role, Howells talks about the damage caused by the revelation
that child labour had been used to make rugby balls for the last World
Cup. ‘That is not acceptable,’ he says. ‘Even hard-nosed rugby fans
know it’s not right. And if businesses expect to ignore things like
that they will be in big trouble.’
He stresses that he
remains wedded to deregulation, rather than more demands on business.
But he believes companies will face more demands from consumers for
information on which to base buying decisions.
While he
says he believes in transparency because it will allow people to vote
with their feet and their money, he adds that transparency will also be
left to market forces. Companies will not be forced to publish more
information about their social and environmental affairs.
‘I don’t want to say companies must do it [publish information].
Instead I say to consumers: ask what companies are involved in. The
more information they [consumers] have, the better the decisions they
can take about the products and services they buy – including an
understanding of what companies are doing in terms of social
responsibility.’
The minister warns he will have vocal
organizations such as Greenpeace on his side. ‘Life will be
uncomfortable for companies that don’t care. That is the message I have
to take around the country. But it’s a message that the most successful
businesses know already.’
