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Corporate citizenship: Ethical embrace or marketing myth?

Expert in corporate social responsibility Professor Jeremy Moon uses the lens of citizenship to discuss corporate ethics and the role of business in society. With host Peter Mares.

"He (Milton Friedman) suggests a dichotomy between if you like the political sphere, which is where governments and officials are accountable, and the business sphere, where companies are accountable. But this dichotomy is really a work of fiction and it's surprising that Friedman believed it." -- Prof Jeremy Moon




Prof Jeremy Moon
Prof Jeremy Moon

Jeremy Moon is Professor of Corporate Social Responsibility and Director of International Centre for Corporate Social Responsibility in the Business School at the University of Nottingham, and the 2013 Gourlay Visiting Professor of Ethics in Business at Trinity College at the University of Melbourne. Professor Moon has been at the forefront of research on corporate social responsibility for about twenty five years  and has written or co-authored scores of book chapters and journal articles on business ethics. He is the co-editor of Corporate Social Responsibility: Critical Perspectives on Business Management (Routledge, 2011), Corporate Governance and Business Ethics (Edward Elgar, 2010), Corporations and Citizenship (Cambridge University Press, 2008) and and The Oxford Handbook of Corporate Social Responsibility (Oxford University Press, 2008).

Credits

Host: Peter Mares
Producers: Eric van Bemmel, Kelvin Param
Audio Engineer: Gavin Nebauer
Voiceover: Nerissa Hannink
Series Creators: Kelvin Param & Eric van Bemmel

Download file Download mp3 (34.0 MB)

VOICEOVER 
Welcome to Up Close, the research talk show from the University of Melbourne, Australia.  

PETER MARES
I'm Peter Mares.  Thanks for joining us.  The term corporate citizenship is frequently used to discuss the role of big business in society.  It captures the idea that the purpose of a firm goes beyond generating profits and includes an obligation to contribute to the overall welfare of the community.  But does it make sense to talk about corporations as citizens.  Sure companies like individuals pay taxes, both are subject to the laws of the land and both can seek legal redress in the courts, but there are significant differences too.  Companies don't vote though they may influence elections in other ways.  While some individuals hold passports from more than one country, people can't transcend the boundaries of the nation state in quite the way that multinational firms do.  Today on Up Close we use the lens of citizenship to discuss corporate ethics and the role of business in society with Professor Jeremy Moon, founding director of the International Centre for Corporate Social Responsibility at Nottingham University Business School.  Professor Moon has been researching business ethics for 25 years and has written scores of book chapters and journal articles on the topic.  He's also the co-editor of major texts in the field, including the Oxford Handbook of Corporate Social Responsibility.  Professor Moon is the 2013 Gourlay Visiting Professor of Ethics in Business at Trinity College at the University of Melbourne.  Jeremy Moon, welcome to Up Close.

JEREMY MOON
Thank you. 

PETER MARES
We hear the term good corporate citizen banded about a lot in relation to the role of business in society.  In your view what does it mean for a firm to be a good corporate citizen?

JEREMY MOON
Clearly the term can easily be misused. And sometimes the term is used by companies rather thoughtlessly simply to try and give a good impression about themselves.  But I think many companies are also demonstrating a little bit more than that.  Initially you might just think of this in terms of them being socially responsible. And again many companies used the term citizenship as a synonym for their corporate social responsibility.  But what I want to do, and what I think many companies are showing they're capable of, is thinking a little bit more seriously about what citizenship really means. 

PETER MARES
So does it mean more than obeying the law, paying your taxes, paying the right wage rate, that sort of thing?

JEREMY MOON
Yes, I think so and a model of citizenship that I've developed with my friends, Andy Crane and Dirk Matten, suggest three sorts of relationships.  Number one, that corporations can be good citizens, much like human individual citizens and thus cooperate with them, collaborate with them in community endeavours of one sort or another.  Of course both are also, in this respect, subject to governments along the ways that you mentioned: being subject to the law and so forth.  But there's a second relationship which companies often find themselves in, sometimes unwittingly, and that is they're a little bit like governments and they end up being involved in ruling us, if you like, administering our rights and so forth.  

PETER MARES 
Can you give an example of what you mean by that?

JEREMY MOON
Yeah, sometimes companies are delegated authority, particularly in remote parts of Australia, parts of Africa, India where they are delegated responsibilities for building roads, ferrying in water, providing schools even on behalf of the communities around, for example, mines.  In other cases, corporations simply extend regulations, for example about work/life balance, parental leave, care for aged parents and companies in a sense, if you like, extend the rights which the governments put down.

PETER MARES 
So they reach into our daily lives?

JEREMY MOON
Very much so, yeah.  And then there's this third relationship which we see in corporate citizenship whereby corporations are citizens much like other citizens, also facilitate the citizenship of other people.  This means that citizens don't, if you like, assert their rights always against others but they're prepared to listen to others and, as I say, support their citizenship.  I might just add that this way of thinking connects with some of the well-known political theory about citizenship.  Aristotle saw citizenship as about ruling and being ruled, which was like the first two relationships we identified…

PETER MARES 
Aristotle of course going back to the ancient Greeks who really thought very hard early on about the role of the individual in society and the relationship between and saw that dual role wasn't it, that both to be a ruler and to be ruled?

JEREMY MOON
Very much so.  Aristotle is still referred to by many people who are thinking of today's citizenship, even though the contexts were very different, particularly about this dual role.  But I think it's also implicit in Aristotle's idea of the citizen in politics that citizens refrain from asserting their own rights all the time but are engaged with other claims that fellow citizens are making.  

PETER MARES 
Are you suggesting then that we should treat corporations like citizens, that we should see them as equals you know, give corporations the vote that sort of thing?

JEREMY MOON
No, I wouldn't go that far but what I would say that it would be helpful for corporations if they understood and it was clear to them what citizenship expectations the society had of them.  I think it would also be helpful for society in some cases to diminish some of its suspicions if they felt that corporations understood what was expected of them.  

PETER MARES 
There are critics of this idea of corporate citizenship and they come I guess from two sides.  We could say from the left and from the right.  If we looked at the right-wing critique of this idea, we might take the late free market economist Milton Friedman, Nobel Prize winner of course.  He wouldn't have had any truck with the sort of stuff you're talking about.  He would have said look a firm's role is to produce goods and services as efficiently as possible in response to the rules of supply and demand. That's it.  Anything beyond that is just a distraction. 

JEREMY MOON
Yeah, and Friedman's arguments aren't altogether stupid but I think often he presents things in a slightly misplaced way.  So first of all the idea of the purpose of the firm to make as much profit as you can for the owners, actually it doesn't sit with most corporate governance or legal judgements about corporate responsibility, even in America and certainly also in the United Kingdom where I come from.  In fact the duties of corporations go rather more widely than that.  Secondly, he suggests a dichotomy between if you like the political sphere, which is where governments and officials are accountable, and the business sphere, where companies are accountable.  But this dichotomy is really a work of fiction and it's surprising that Friedman believed it.  Because in America at the time he was writing American corporations were very involved in politics, often involved in campaigns in lobbying congress, in lobbying the executive, in taking part in judicial reviews of regulation, often concerning tariffs, quotas, regulations about the environment and so forth.  So this premise of a dichotomy is empirically false.  My point is let's recognise the fact that corporations are involved in politics and come up with a framework which helps them do that in a way that society can feel positive about. 

PETER MARES 
Yeah, so it's not just as simple as saying corporations should just obey the law and they're the rules and they play by the rules because of course corporations help to set those rules, don't they.  I mean we see all sorts of examples, whether through political donations or lobbying or media campaigns using their money to influence what's in the media or whatever, that corporations do shape the rules of the game.

JEREMY MOON
Precisely, it's not as if the rules come from some neutral arbiter.  They're the stuff of politics and corporations have an interest in them and so they should do.  I think it's perfectly reasonable much like human citizens that they have an interest or a value that they would like to feed into for the forming of a new piece of regulation.  

PETER MARES 
And this takes us I suppose to the alternative critique, the left-wing critique of the idea of corporate social responsibility or corporate citizenship, which is that this is all eyewash, this is all just spin on behalf of big corporations which are primarily interested in profit and will do whatever they can to bend the rules to suit their own interests.  The idea that they will be good corporate citizens is simply a marketing strategy.

JEREMY MOON
Yes, and again it's interesting to see some similarities with Friedman's argument and similarly they conclude that business simply shouldn't be involved in the political because if business is that they will corporatize it and take it over.  But again, from my point of view, I think the citizenship idea is helpful because it provides a way of thinking about framing and containing the manifest power of business in the political.  What I point to in my work is institutions which might regulate for example the supply chains of cocoa, bananas, fish, timber. And these are regulated not by governments alone, not by corporations alone, but by if you like mixed methods combining NGOs, trade unions, appropriate professionals, companies and governments.  And this seems to be a model which could be extended to a wider range of activities of corporations. 

PETER MARES 
So an example of that would be something like say the Forest Stewardship Council, which aims to ensure that timber that gets used in building or whatever it may be is sourced from sustainable plantations or sustainably harvested forests and that we're not destroying the rain forests of the world and so on?

JEREMY MOON
Precisely and the parties to the Stewardship Council agree the regulations and they agree a certification and an auditing system and they then agree a badge, if you like, is attached to the timber that meets the criteria. 

PETER MARES
The left-wing critics of this idea though would say yes that's all well and good and sometimes there may be points at which good corporate citizenship is also good business because consumers want an ethically sourced product or whatever, but that there will come a time, or there will be examples where these two things are in conflict.  So, it's hard to see for example how a coal mining company could be a good corporate citizen when it comes to climate change because to be a good corporate citizen as a coal miner you'd essentially have to put yourself out of business?

JEREMY MOON
This is a good point even if you don't take the left-wing critique of corporations and citizenship.  My assumption is that society wouldn't expect coal mines to close down tomorrow.  That would actually create dire energy shortages; there isn't enough capacity in the system to compensate for it overnight.  And leaving aside, well not leaving aside but also thinking about the employment rights of those who work in that sector, the supply industries which supply it and convey the coal and so forth.  So, what one might assume is that if the society made a decision that it wanted to move away from certain high carbon impacts on the climate, they would come up with a strategy to do so which is graduated, which the players all contributed to that decision-making; their interests and values were presented. Rather than on one hand corporations just proceeding as if these problems don't exist or on the other hand a government regulation coming in which puts (a) energy supplies at risk, (b) puts a lot of people out of work, and (c) is probably an inappropriate intervention in the investment decisions which investors made in the coal industry, assuming a relative amount of continuity in the short run. 

PETER MARES 
I'm Peter Mares and you're listening to Up Close.  In this episode I'm discussing the social role of corporations with Professor Jeremy Moon, Director of the International Centre for Corporate Social Responsibility in the Business School at the University of Nottingham.  Jeremy, the idea of corporate citizenship is made more problematic isn't it by globalisation because citizens of course are citizens of nation states, but multinational firms transcend borders and they operate all over the world?

JEREMY MOON
Yeah, this is a good point and in fact several issues that globalisation raises for our argument.  Number one, the one you've made is that conventionally citizenship is seen as an exclusive phenomenon; you are a citizen of one place and thereby not of another.  But actually human citizenship has emerged, particularly in the last 50 or so years, as a more complicated matter and people actually do manage multiple citizenships of different countries and that's something that they've, in a sense, grown into and national authorities take this on board and build it into the citizenship that they offer.  I think also it's evident that a number of corporations manage this quite well.  I'm not saying it's easy; a company from outside Russia moving into Russia to do business will find different mores different regulations, different expectations upon them.  

PETER MARES
They may also find that the government has a different attitude towards them than it does to perhaps a Russian company?

JEREMY MOON
Indeed that's so, but I think to a large extent multinational corporations if they want to be successful will need to accommodate themselves to the mores of the country which they're moving into on the assumption that this doesn't offend fundamental expectations from their home country, particularly from their home investors and presumably their home country workers as well. 

PETER MARES 
Because there's a kind of danger area here isn't there because if the way business is done in say Papua New Guinea or indeed Russia involves a high degree of corruption and bribing officials in order to get permits and that sort of thing, that may be the local conditions and the local expectations, but it may be in direct conflict with what would be seen as good corporate citizenship in the home base?

JEREMY MOON
Yes and actually in some respects the company doesn't need to rely on its own discretion in this respect.  Companies which are registered in America or in the United Kingdom will actually be liable in their courts for corrupt activities perpetrated in Russia for example, or anywhere else for that matter, as Siemens found out to its cost when it was found in an American court that it had acted corruptly in many places.  Moreover, there are if you like softer systems whereby companies can signal what they think is appropriate behaviour and agree this.  For example, the Extractive Industries Transparency Initiative is one where companies reveal the payments they make to host governments, and make these very transparent, of course if they're found to have acted beyond that then the criticism of hypocrisy will be yet worse. 

PETER MARES 
So it may be one thing to be funding schools in Burkina Faso or another African country, quite another to be funding the private school education of the mining minster's daughter?

JEREMY MOON
I think that difference would be noticed. 

PETER MARES
There is still a difficulty here though isn't there, because corporations can - at least in certain industries - can move around the world.  So, if there's an expectation in one country that you will meet certain environmental standards or certain labour standards, and another country has more relaxed conditions that will lower your costs of production, then there's a logic to the multinational firm moving from country A to country B and taking advantage of those more relaxed environmental and labour laws?

JEREMY MOON
Yeah, that's a good point and there are some companies whose infrastructure need be quite modest and who, if you like therefore more fleet or foot than others.  I think however companies don't like moving too much.  It introduces a whole range of transactional costs which they prefer to avoid.  They often prefer to operate in countries with high standards because this builds in an element of predictability and it often makes it easier for them to meet the expectations of their own investors, governments and customers back home.  But I grant you this is an issue and again, as with humans, we wouldn't want to inhibit them from moving; that would seem inappropriate.But what I'd like to draw to the attention is that there are a number of ways in which companies actually don't want to move too frequently, it doesn't help them to do so.  They do so in extremis but I do grant you there are some cases where price has simply driven companies to move because they expect their customers simply won't pay any more.  And in this respect the citizenship has to, if you like, be factored in with market realities that they're working with. 

PETER MARES
Well I guess one of the clear examples of that would be the clothing and textile sector and we've seen in 2013 the terrible industrial accident in Bangladesh, the collapse of the Rana Plaza clothing factory, 1000-plus workers killed.  And in Bangladesh and in other developing countries, we've seen other terrible industrial disasters, you know, burning factories and workers trapped inside because the fire escapes were locked and the windows were barred, that sort of thing.  Now, how does the lens of corporate citizenship help us to address that sort of problem?

JEREMY MOON
Yeah, a number of again very tricky issues raised here.  I think the concept of corporate citizenship would presume that a company operating in Bangladesh would, if you like, bring its citizenship criteria to bear in its operations there and try to treat the workers in its supply chain appropriately, according for example to ILO conventions concerning health and safety remuneration and hours at work.  But manifestly companies aren't always able to entirely control these supply chains so that raises questions about what they're prepared to spend to ensure that their supply chain is, if you like, clean.  It raises the question of the auditors who allegedly assured the, for example, the retail buyers.  It raises questions too about the Bangladesh government.  In a number of these developing countries actually there are regulations about health and safety at work, child labour and so forth but they're simply not applied.  Again going back to my idea of citizenship as sets of relationships, clearly the corporation isn't the only actor here, and nor would we want it to be.  That would be the corporatization of the political.  And I think we need to remember in this case the role of these other players.  I think again you imagine different sorts of reaction to the Rana Plaza case.  In the late 1990s when there were revelations about child labour in Bangladeshi supply chains, the American Congress passed a regulation which effectively removed Bangladesh from the approved list of suppliers of textiles to America.  This had completely deleterious consequences for Bangladeshi children and Bangladeshi families.  This was a case where, in a sense, the government made a hard regulation which overlay any interest that corporations might have had of working with their supply chain.

PETER MARES 
So it had unintended consequences; what were the consequences in that case?

JEREMY MOON
Well many families losing cash in their domestic budget.  Children often then involved in much more risky activities than working in factories.  

PETER MARES
It shows how complicated this is because, for example, I might as an ethical company director, I might say well I want to make sure the T-shirts I get come from factories where workers are treated decently, paid well, where the factory is safe and that sort of thing.  But my competitor may be willing to deal with suppliers who are much more rough and ready and may therefore be able to offer T-shirts that are a dollar cheaper than mine.  The result could be simply that I go out of business. 

JEREMY MOON
That would be the case and I think companies do need to make decisions where they are aligning their behaviours with reasonable expectations they have of their consumers.  Companies of course are quite powerful in informing tastes, let's not forget that.  So I wouldn't rule out the possibility that companies could engage with their consumers and say look we can provide you a T-shirt which gives you an assurance that children haven't been exploited.  It's going to cost you 50 cents more.   

PETER MARES 
Yeah, because they do market to us on price as well, it's not just that we seek lower prices; we're encouraged to seek lower prices. 

JEREMY MOON
Very much so.  Then there's a range of choices that corporations have here.  They could actually just simply insist and regulate very closely supplier companies, but if the supply company is found to fail, you simply exit.  That actually isn't always a very constructive policy.  You might then take a more gradual approach whereby you work with the supply company and try to improve their standards with them.  Of course there's another solution completely which is that you simply exit from Bangladesh because it might be easier for example for a UK company to supply from Turkey.  The shorter supply chain, they might be able to manage it better, they might be able to rely on auditors better, or even come back to Nottingham where there was a thriving textile industry until about 20 years ago. Of course either of these could be examined from a citizenship perspective.  Staying in Bangladesh despite some of the troubles that the corporations experience could be seen as a contribution to the development of that country.  

PETER MARES
Because it's going to lift wages and provide work opportunities and so on?

JEREMY MOON
Very much so and without the textile industry Bangladesh would be in a more powerless state than it is now.  Conversely, a citizenship model for a UK company could be to create more jobs back in the UK.  As I've said none of these things are easy but I think just thinking in citizenship terms about the corporations' power, about its relationship to other citizens is helpful, along with other considerations about price and manageability. 

PETER MARES
So it helps to define what the problems are, what the ethical issues are and what the options might be.  Another challenge to the idea of corporate citizenship that comes from globalisation is the emergence of very powerful companies now in China that are not private companies but are in fact state-owned enterprises and therefore under the direct or indirect control of China's ruling Communist Party.  What kind of expectations might we have of a company like that; a Chinese state-owned enterprise when it comes to being a good corporate citizen?

JEREMY MOON
Good question and again I think like any corporation moving abroad, as per any person moving abroad, when one moves country one likes to understand the expectations, the folkways if you like about a country: what's appropriate behaviour to get on with your neighbours, your colleagues and so forth.  And I think this is going to be the case in Chinese companies leaving China.  And there's evidence that, for example, [Chinese] state-owned enterprises in Africa are making contributions to national economic development, often in contributing infrastructure beyond the immediate sphere of the business activity.  Of course it's also evident that state-owned enterprises in China reflect a Chinese attitude to, for example, the human rights issue, which for American companies is seen as a pivotal corporate citizenship sort of issue, but for Chinese ones isn't.  I think that gets reflected in the way, for example, state-owned enterprises from China might be operating in Africa.  But in a sense, that example illustrates the way that companies do reflect where they come from.  But to some extent would reference to the economic development that they do engage in some of the challenges facing the local populations. I think also more broadly, it's interesting to see the Chinese government actually encouraging Chinese companies in the export sector to engage with the new institutions of corporate citizenship.  For example, the United Nations Global Compact, which is a voluntary agreement among companies, but also involving NGOs, trade unions and the United Nations itself, is a way in which companies can agree about how to meet 10 principles of responsible business.  As I say, it's interesting that the Chinese government has encouraged its export sector to engage with those principles, work within that institution.  That's again if you like a perfect example of a citizenship sort of model: multiple players working around agreed principles and trying, if you like, to manage them in the business. 

PETER MARES
This is Up Close, I'm Peter Mares and I'm speaking with researcher on corporate social responsibility Professor Jeremy Moon.  Jeremy, we've been talking about corporate citizenship but there's also an idea of corporate sovereignty that is where the corporation actually overrides the nation state and the elected government if you like.  There's concern, for example, that international trade agreements often contain elements which would constrain the ability of an elected government to change the laws on environmental protection say because the company could then sue the government for massive damages.  How much is that a concern for you?

JEREMY MOON
Well it is a concern in itself but these international trade agreements are made by governments, not by companies.  I grant you there is evidence that sometimes governments have been found to be perhaps representing unduly the interests of some of their domestic companies, but I stress companies.  These agreements aren't company to company, they are government to government.  Again I think this means we need to sort of remember that corporations in this respect are more like citizens.  They have an interest in what their own government agrees and signs off on, but they can't command it and nor would we expect them to do so. 

PETER MARES
But they're much more likely to open the minister's door than you or I are, for example and to get a hearing and have influence than an ordinary citizen?

JEREMY MOON
Manifestly true and this is an area where people are reasonably more suspicious about corporations.  Then again I think in other walks of political life, transparency is terribly important and one area where I think more work needs to be done is to develop codes which, if you like, guide companies in what appropriate lobbying is.  I think transparency about lobbying has got to be central to that.  So this is an area where I think, if we take the citizenship idea a little bit further, we do see that we do need if you like in this case some more codes to at least guide and make transparent what companies are doing. 

PETER MARES
So would that be for example that ministers diaries - this has been a suggestion at least in Australia and I think is in some countries is the case - a minister's diary has to show who the minister met with, from which company, when, for how long, about what topic that sort of thing?

JEREMY MOON
Yes, and I think there should also be transparency from the point of view of the companies.  There should be information which - obviously you wouldn't expect it in great detail in annual reports, but you would expect to be able to access this detail if an enquiry was made. 

PETER MARES 
And it's easy these days to put that sort of detail online, you don't need to publish it in written volumes and so on, it can be made readily available to anyone?

JEREMY MOON
Absolutely. And again going back to the citizenship idea, if the companies agreed among themselves with government and with civil society representatives what seems an appropriate code then I think we'd get a lot more progress.  Then the companies would be less perhaps reluctant to make transparent this information because they know that it would be - assuming it was - acceptable. 

PETER MARES 
And an even playing field that their competitors had to make the same information public?

JEREMY MOON
Precisely. 

PETER MARES
Talking about the rise of the internet, that raises a whole set of questions around social media and its role in citizenship and corporations because on the one hand, things like Twitter or Facebook, or the ease of setting up a blog or whatever, that can be seen as democratising society.  It enables people to connect with each other, to organise together even across international borders and so on.  But on the other hand, the very companies, the very sources of these social media services are very, very powerful companies.  

JEREMY MOON
Yeah, and this is a fascinating example.  On the one hand these companies very powerful as you've observed, they actually facilitate the citizenship of those who use social media both to express their views about governments and of course about companies.  So this is a way in which corporations are actually facilitating the citizenship of others. 

PETER MARES
This is the third type of citizenship you were talking about at the beginning, yeah?

JEREMY MOON
Precisely, the third relationship.  I think sometimes of course difficulties arise here as an American IT company operating in China found when it was expected by the Chinese government to transfer information about the users of a certain technology.  And they decided in the end - actually their shareholders decided - that this wasn't appropriate.  In other words, the American citizenship then trumped the citizenship of that particular operation in China.  There are some other interesting side-effects of all this.  Number one is that companies because of the social media are then prompted to behave in different ways.  So I came across an interesting case in the UK recently where a parents group set up an online petition which was directed to Lego.  And Lego had had a marketing campaign with The Sun newspaper.  And the parents' petition was asking Lego to remove this marketing campaign through that newspaper on the grounds that the page three institution, which is topless ladies, in The Sun newspaper didn't fit the family values of Lego.  So here we have a very interesting case where the social media has enabled a group of parents, if you like, stakeholders of Lego to engage Lego.  Lego's behaved in some ways like a fellow citizen and they actually said we're grateful to this group for drawing our attention to these issues.  They behaved like a citizen, or even perhaps an NGO in respect of another company The Sun newspaper and withdrawing its custom.  There's one other example which has come to my attention recently which is fascinating.  That a number of banks and other finance companies in the UK, aware of social and governmental anxieties about how the internet can make children vulnerable to violent and pornographic material.  Some of these companies have said to the IT companies if you can't guarantee that these children are protected, we will not provide you with the financial mechanisms, if you like, to take payments through credit cards and so forth.  So with social media thrown up there altogether now we've considered three very different relationships but all reflecting one form of citizenship or another.  

PETER MARES
It's also important to remember that the companies that provide us with internet services and social media: companies like Google or Apple or whatever, part of their business model is about accumulating data on us as users which they can then monetise and sell to advertisers and so on.  So there's also at the same time as they may be facilitating our citizenship in one way, at another they're attempting to turn us into commodities if you like.

JEREMY MOON
Absolutely right.  These companies are not providing this citizenship opportunity for the good of their own health, as Adam Smith would have said.  They're doing it because there is a business interest here and the use of these social media manifestly needs various sorts of regulation, be it social regulation, self-regulation or governmental regulation. 

PETER MARES 
Of course social media is also used by corporations to massage their own reputations and so on.  I mean it's also very much a marketing tool, isn't it?

JEREMY MOON
Yeah and interestingly some companies have used new social media as a way of engaging with their critics.  Sometimes this has been a bigger task than they expected because the number of questions or challenges that come in about the company policy that they then have to deal with in the social media has been quite large.  And there are other cases where companies have had no choice but to respond to social media.  There was a critique of Nestle sourcing of palm oil from the organisation Greenpeace, which saw this as contributing to the threat of the orangutan in Malaysia.  As a result of this media campaign - it was through YouTube - Nestle stood back and decided to review its policy.  But I think going back to your earlier point, let's not escape from the fact that these corporations are very powerful and they're using these media as means of core business.  It turns out that these have all sorts of citizenship implications for governments, for citizens and for companies themselves. 

PETER MARES 
Another example might be that they want to make internet service providers liable for what you or I might do online.  So, if I downloaded something to which I didn't have the copyright they want to make my internet service provider responsible for that, which is - some people would compare to making the telephone company responsible for what I say to you over the telephone.  

JEREMY MOON
Yes, I think there are some hard regulatory issues here.  In a sense I recognise that.  All I'm suggesting is when it comes to addressing these different issues that citizenship questions should be uppermost.  What's the corporation doing in respect of ruling us, in what way is it behaving like a fellow citizen, and in what ways is it facilitating the citizenship of others and do we have appropriate mechanisms to ensure that these relationships get played out properly. 

PETER MARES 
Ultimately then what will it take, do you think, to improve the level of corporate citizenship?  I mean where does the pressure come from if it's not necessarily going to be an automatic thing that companies evolve in this way?

JEREMY MOON
Yeah, I think ultimately, as in human citizenship and human sociability, the key is the social gaze that neighbours are observed by other citizens, that corporations are observed by other citizens and that we have the basis for acting on the basis of what we have observed.  I thought of an example of this recently following the revelations of if you like banking misdemeanours which I would call uncitizenly behaviour, in the United Kingdom in 2012 and '13; for example, failure to pay taxation on the part of other companies.  That actually in the case of banks if citizens who held accounts in these banks felt frustrated about the uncitizenly behaviour of their own bank they could easily switch.  At the moment this is a terrifying prospect to switch bank accounts because there aren't easy mechanisms.  I think that here's a way in which the social gaze looks at banks, gets fed up with some of the uncitizenly behaviours that they've been found engaging with, but they need a mechanism to act on the social gaze, much like you can have energy switching in many parts of the world.  I think that the government, banks themselves, and appropriate professionals and civil society organisations could follow up if you like to enable us to gaze at the banks, make a judgement and then act, so switching would help.  

PETER MARES 
So part of it would be voting with our feet as consumers or indeed as shareholders and moving our pension savings into a different fund if we don't like what that pension fund's invested in, changing our electricity provider if we want one that's more committed to alternative energy, those sorts of things.  But what about good old-fashioned regulation, I mean what about going back to getting governments to be a bit braver in setting the rules of the game for the corporations to abide by?

JEREMY MOON
Certainly I'm not against regulation and regulations and conformance with the law goes with corporate citizenship.  My point though is that we can't rely on that alone.  Laws are notoriously out of date a year later.  Laws are notorious for being worked around; hence a very large number of major companies operating in the UK are paying no corporate tax there whatsoever entirely legally.  Laws also encourage diffident behaviour, grudging behaviour, even sometimes shirking.  So that where we do have laws we also need values and mechanisms to ensure that the required behaviour is realised. 

PETER MARES
Jeremy Moon, thank you for joining us on Up Close. 

JEREMY MOON
Thank you. 

PETER MARES
Professor Jeremy Moon is the founding director of the International Centre for Corporate Social Responsibility at Nottingham University Business School, and the 2013 Gourlay Visiting Professor of Ethics in Business at Trinity College at the University of Melbourne.  You'll find links to his centre and his extensive list of publications on the Up Close website, along with a full transcript of this podcast and every other weekly edition of the program.  Up Close is a production of the University of Melbourne Australia created by Kelvin Param and Eric van Bemmel.  This episode was recorded on 20 November 2013, and produced by Eric van Bemmel and Kelvin Param with Audio Engineer Gavin Nebauer.  I'm Peter Mares, thanks for listening.  I hope you can join us again soon.

VOICEOVER
You've been listening to Up Close.  We're also on Twitter and Facebook.  For more info, visit upclose.unimelb.edu.au.  Copyright 2013, The University of Melbourne. 


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