Wikipedia defines corporate responsibility as a term which has come to characterize a family of professional disciplines intended to help a corporation stay competitive by maintaining accountability to its four main stakeholder groups: customers, employees, shareholders, and communities.
Others have also addressed this issue. Samuel Gompers, a key figure in American labor history and the founder of the American Federation of Labor (AFL) had the following take; “The worst crime against working people is a company which fails to operate at a profit.”
Another view, expressed by Milton Friedman, a noted, prize-winning economist, who wrote, “There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.”
Investors should be aware that corporations are currently under increasing pressure to address societal issues, curtail pricing and adjust product choices. Portfolio decisions should take this into consideration and reflect the investor’s personal preferences. It may be helpful to consult an advisor, who should provide advice that reflects their fiduciary responsibilities, as outlined in our blog, posted August 7, 2024, “The Job of a Fiduciary.”
All comments and suggestions are welcome.
Walter J. Kirchberger CFA