sharon sanders
Editor-in-Chief & President
According to Daniel Yankelovich in the "McKinsey Quarterly" there is an increasing agreement that Milton Friedman's interpretation of the "invisible hand" theory is limited and needs to be expanded. This interpretation of Adam Smith's concept that social good naturally comes with increased profits is now being challenged.
A stronger approach needs to be widely accepted. The ethical standards in business need to be higher. Shareholder value can be retained and increased while a higher level of social good is attained.
"Only a handful of companies ......... hold a broader conception of truly enlightened self-interest that actively seeks to serve the public good instead of winning for yourself."
An ethical culture must be established at the Corporate Board level to filtrate throughout the company. "Think of the concept of the tipping point—the point, in this case, at which policy makers can no longer ignore the public. Now, you can live with a lot of public dissatisfaction before you reach a real tipping point. But when you do reach it the whole game changes." Resolve the issues of financial performance pressures from the investment community. Consider long-term growth vs. short-term profits.
"Then I would suggest disbanding the compensation committee and its corrupt practice of working with outside consultants. It’s just a Kabuki dance. It didn’t start out that way, in the same way that shareholder value didn’t start out perverted, but it’s become perverted. All my retired CEO friends are just astonished at what CEOs are making today. Some dance!"
All business entities need to re-align themselves with the concept of enlightened self interest.
http://www.mckinseyquarterly.com/article_page.aspx?ar=1984&L2=21&L3=37&srid=246
A stronger approach needs to be widely accepted. The ethical standards in business need to be higher. Shareholder value can be retained and increased while a higher level of social good is attained.
"Only a handful of companies ......... hold a broader conception of truly enlightened self-interest that actively seeks to serve the public good instead of winning for yourself."
An ethical culture must be established at the Corporate Board level to filtrate throughout the company. "Think of the concept of the tipping point—the point, in this case, at which policy makers can no longer ignore the public. Now, you can live with a lot of public dissatisfaction before you reach a real tipping point. But when you do reach it the whole game changes." Resolve the issues of financial performance pressures from the investment community. Consider long-term growth vs. short-term profits.
"Then I would suggest disbanding the compensation committee and its corrupt practice of working with outside consultants. It’s just a Kabuki dance. It didn’t start out that way, in the same way that shareholder value didn’t start out perverted, but it’s become perverted. All my retired CEO friends are just astonished at what CEOs are making today. Some dance!"
All business entities need to re-align themselves with the concept of enlightened self interest.
http://www.mckinseyquarterly.com/article_page.aspx?ar=1984&L2=21&L3=37&srid=246