“What is the responsibility of people with wealth? With wealth….Does some kind of responsibility to a common good come out on top over self- interest?”quoted byStephen B Young (author of ‘Moral Capitalism’ and Global Executive Director of Caux Round Table).
The above mentioned quote directs us to take into account the concept, narratedover here which is globally known as Moral Capitalism. So, what is it?
Basically, Moral Capitalism is a field theory that integrates intangible moral considerations with traditional micro and macro-economicpostulates. In sum Moral Capitalism asserts that interest and virtue are not necessarily in conflict; that the virtue is an extension of interest rightly understood.
To understand it simply, Moral Capitalism is an integration of Capitalist economy with social morals. It is a closely related concept to human capital. Capital has a variety of forms, including physical capital, money capital and human capital, whereby human capital plays a decisive role in economic development. Without a considerable human investment to prominently improve human ability, low level output will surely co-exist with extremely rigid economic base. Human capital which is directly related to moral capitalism prevents human capital from obtaining benefits. The improvement of Human creativity and working skills depend on the correct value orientation, scientific moral, spirit and moral practice in the society. Therefore, in the process of economic development, morality is certainly an important asset invested in the production. Hence this explains the development of the concept – moral capitalism.
Now, the next questions in readers mind should be why are we discussing about Moral Capitalism? How it relates to the article’s title?
Well the answer is here!
The Caux Round table is an international organization of senior business executives aiming to promote ethical business practice. It was founded in 1986 by Frits Philips, president of Philips, and Olivier Giscard d’Estaing, along with Ryuzaburo Kaku, president of Canon.
The Caux Round Table believes that the world business community should play an important role in improving economic and social conditions. Through an extensive and collaborative process in 1994, business leaders developed the CRT Principles for Business to embody the aspiration of principled business leadership. Its Principles for Business are a worldwide vision for ethical and responsible corporate behaviour and serve as a foundation for action for business leaders worldwide. As a statement of aspirations, The CRT Principles aim to express a world standard against which business behaviour can be measured.
The Caux Round Table has sought to begin a process that identifies shared values, reconciles differing values, and thereby develops a shared perspective on business behaviour acceptable to and honoured by all.
‘These principles are rooted in two basic ethical ideals: kyosei and human dignity. The Japanese concept of kyosei means living and working together for the common good enabling cooperation and mutual prosperity to coexist with healthy and fair competition. “Human dignity” refers to the sacredness or value of each person as an end, not simply as a mean to the fulfilment of others’ purposes or even majority prescription. This concept is directly proportional to Moral Capitalism.’
THE CRT PRINCIPLES
The Caux Round Table’s approach to responsible business consists of seven core principles. The principles recognize that while laws and market forces are necessary, they are insufficient guides for responsible business conduct.
The principles are rooted in three ethical foundations for responsible business and for a fair and functioning society more generally, namely
Living and working for mutual advantage
The respect and protection of human dignity
The principles also have a risk management foundation – because good ethics is good risk management. And they balance the interests of business with the aspirations of society to ensure sustainable and mutual prosperity for all. These are as follows:
PRINCIPLE 1 – Respect Stakeholders Beyond Shareholders
A responsible business acknowledges its duty to contribute value to society through the wealth and employment it creates and the products and services it provides to consumers.
A responsible business maintains its economic health and viability not just for shareholders, but also for other stakeholders.
A responsible business respects the interests of, and acts with honesty and fairness towards, its customers, employees, suppliers, competitors, and the broader community.
PRINCIPLE 2 – Contribute to Economic, Social and EnvironmentalDevelopment
A responsible business recognizes that business cannot sustainably prosper in societies that are failing or lacking in economic development.
A responsible business therefore contributes to the economic, social and environmental development of the communities in which it operates, in order to sustain its essential ‘operating’ capital – financial, social, environmental, and all forms of goodwill.
A responsible business enhances society through effective and prudent use of resources, free and fair competition, and innovation in technology and business practices.
PRINCIPLE 3 – Build trust by going beyond the letter of the law
A responsible business recognizes that some business behaviours, although legal, can nevertheless have adverse consequences for stakeholders.
A responsible business therefore adheres to the spirit and intent behind the law, as well as the letter of the law, which requires conduct that goes beyond minimum legal obligations.
A responsible business always operates with candour, truthfulness, and transparency, and keeps its promises.
PRINCIPLE 4 –Respect Rules and Conventions
A responsible business respects the local cultures and traditions in the communities in which it operates, consistent with fundamental principles of fairness and equality.
A responsible business, everywhere it operates, respects all applicable national and international laws, regulations and conventions, while trading fairly and competitively.
PRINCIPLE 5 – Support Responsible Globalisation
A responsible business, as a participant in the global marketplace, supports open and fair multilateral trade.
A responsible business supports reform of domestic rules and regulations where they unreasonably hinder global commerce.
PRINCIPLE 6 – Respect the Environment
A responsible business protects and, where possible, improves the environment, and avoids wasteful use of resources.
A responsible business ensures that its operations comply with best environmental management practices consistent with meeting the needs of today without compromising the needs of future generations.
PRINCIPLE 7 – Avoid Illicit Activities
A responsible business does not participate in, or condone, corrupt practices, bribery, money laundering, or other illicit activities.
A responsible business does not participate in or facilitate transactions linked to or supporting terrorist activities, drug trafficking or any other illicit activity.
A responsible business actively supports the reduction and prevention of all such illegal and illicit activities.
Futhermore, the institution played a very significant role in 2008’s economic crisis. The account of which is provided ahead, it includes the strategies that Caux Round Table proposed in front of various nations to cope up with plunging world economy as well as the sinking economic development since onset of Great Recession.
Additionally, the thrust of CRT recommendations was to provide mechanisms for better risk management and better governance. Subsequently, all the reform proposals put forth by key governments in the United Kingdom, France and the United States, and recommendations supported by the G8 and G20 meetings of national leaders, adopted similar approaches to creating new rules for global financial intermediation. CRT Principles were thus validated by the actions of various leaders worldwide.
CRT also provided commentaries on the causes of the crisis and proposed considerations for preventing future crises which were sent regularly to some 3,000 opinionleaders around the world.
WORLDWIDE INITIATIVES BY CRT
As an advocacy organization seeking to have its ideals and principles implemented around the world, the Caux Round Table provided intellectual leadership on key points of action. Out of which account of few are as follows: –
By Responding to the Financial Crisis, the CRT initiated an effort to coordinate collaboration among some 14 U.S.-based NGOs concerned for business ethics and corporate social responsibility.
It also revised the proprietary CRT risk assessment metric for companies, Arcturus, was substantially revised and improved so that it now offers the global business community a cutting-edge process for implementation of corporate responsibility within a management context of sustainable profitability.
Furthermore, in consultation with KCA University in Kenya and other experts developed a curriculum for ethical leadership training in the African context. It planned, hold and organized the trainings as high priority in 2010.
Not only this, during 2009 CRT through its Japan chapter placed increasing emphasis on realizing Moral Capitalism as an organizational goal. Domestically and internationally, they carried out a wide range of activities and projects to achieve these goals. Their main activity included providing training and support for business. Providing corporate trainings are useful in developing awareness for implementing and promoting CSR activities. CRT Japan’s corporate training ranged from sessions on CSR, workshops on materiality and training programs on liberal arts for potential business leaders. All this made global impact due to the fact that there is an increasing recognition of the need for business ethics. There is also an increasing demand for thinking about ‘Personal Social Responsibility.’
“To convert the Business man into the profiteer is to strike a blow at capitalism….The Business man is only tolerable so long as his gains can be held to bear some relation to what, roughly and in some sense, his activities have contributed to society” – John Maynard Keynes quoted in 1923
This quote highlights the belief system of not only john Keynes but it also provided base for the origination and development of The Caux Round Table for more than a decade. On and on CRT has proved its metal in establishing working relationships based upon good wills, moral business ideas and open minded organizational interaction and it seeks to continue its worldwide initiatives through cooperation and contribution of various Business Organization and their respective countries.