Being responsible has become ‘a tangle of traps’: Here’s five for business leaders to avoid

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Many of the traps emanate from clichés, myths and misunderstandings we have about responsible business

There was a time when Nobel Prize winning economist Milton Friedman guided executives on social responsibility by his declaration their main goal was to satisfy shareholders through gaining the maximum possible profit. These days, it’s not quite that simple. There’s a long list of policies, behaviours and goals corporations are expected to meet from various stakeholders, often contradictory.

“Reputation management now involves playing Whac-A-Mole with faceless activist groups on the internet, whose viral successes spring from nowhere,” she writes inIt’s a labyrinth of expectations, beyond profits. Working with various organizations across the globe, she stresses that none gets everything right and she cannot name good or bad businesses – only better and worse ones. Indeed, they get better by responding to ethical friction.

Mistakes – and attacks – are inevitable as the effort to be a responsible business has become what she calls “a tangle of traps.” She notes that Yvon Chouinard came under attack after announcing in 2022 that he would transfer the ownership of Patagonia Inc. to a non-profit trust, with the Earth as its only shareholder. “Gotcha” commentators noted the underlying business model still relied on plastics, the deal would make tax avoidance easier, and Patagonia’s employees would receive no stake.

 

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