Close-up of the book cover. Photo: Courtesy of Panoma Press.
‘Corporate Citizenship: The role of companies as citizens of the modern world’ by David Logan
Review by Daniel Clarke Flynn
This is a robust personal memoir that was born from a lecture that its Quaker author, David Logan, gave to young people joining Corporate Citizenship, a global consultancy that helps businesses find their place in society. Several of the young people said, ‘You should write a book,’ so he did. This work is an answer to the great question of his young life a generation earlier: ‘What is the future of capitalism?’ - back when he and his friends thought that socialism was the future. He came to believe that, for very practical reasons, capitalism is here to stay, that it ‘can be far more inclusive and beneficial than the Marxists ever thought, but that it probably cannot pay the environmental cost of its success.’ Consequently, he has dedicated his life to work on how for-profit companies can be made more responsible and sustainable.
The book is in two parts. The first part, ‘The Historical and Cultural Context’, is a fascinating summary of the history of business in human society, from 2000 BC to the present day. This sets the stage for the second part, ‘Managing the Company as a Corporate Citizen’, in which David Logan stresses his belief in the importance of corporate entities having clear values as a basis for decision-making, and he sets forth his call for corporate citizenship with practical examples, suggestions, and caveats.
David Logan is well qualified to write this book. He went from serving as a Trades Union Congress officer in London, to working for the Social Responsibility and Ethics Committee at the corporate headquarters of Levi Strauss & Co. in San Francisco, to being a co-founder of what became the international consultancy Corporate Citizenship, having taken a variety of career steps along the way. In addition to Levi’s, he worked with, analysed, and/or advised a range of organisations such as Cadbury, Unilever, Abbott, Johnson & Johnson, Patagonia, Diageo, Oxfam, The Body Shop, Ben & Jerry’s, Lafarge (today LafargeHolcim, a leading international construction materials company), and more.
He has served in all three of the formal global sectors addressed – for-profit companies, government, and not-for-profit organisations (or NGOs, non-governmental organisations, as the UN coined the term). It is difficult to measure the informal sector of commerce from work done locally by millions – perhaps billions – around the world. The author mentions this, but it is not specifically included in the book’s analysis and recommendations.
For-profit companies have been disparaged throughout history. David Logan addresses this up front, stating in both parts of the book his belief that capitalistic for-profit enterprises have always driven human progress, despite abuses, better than state-controlled economies. (Compare that with one of anthropologist Margaret Mead’s famous quotes: ‘Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.’)
With for-profit enterprise here to stay in the foreseeable future, David Logan calls for companies (the global for-profit sector) to act as responsible corporate citizens in cooperation with the global governmental and not-for-profit sectors. The latter has grown more effective in recent years with increasingly influential advocates such as Greenpeace, Oxfam, Amnesty International, and Médecins Sans Frontières (MSF, or ‘Doctors Without Borders’ in English, the largest individual-donor-funded humanitarian organisation in the world), representing the concerns of humankind everywhere.
David Logan rightly cites stakeholder theory. A sustainable company today needs to be aware of and respond to all stakeholders, not just its owners/shareholders, but also customers, staff, retirees and potential staff, suppliers, lenders, local, state/provincial and federal/national governments, communities in which the company operates, and the NGOs advocating on people’s behalf locally, regionally, and internationally.
The basic challenge was and remains addressing those who believe that business is solely to make a profit for owners (such as US economist Milton Friedman) versus those such as David Logan who believe that it is in a company’s long-term interest and crucial to its survival to base action on ethical values and consideration of all stakeholders. It is good business and leads to long-term corporate success.
David Logan’s success examples in the book are primarily those of admirable global consumer products companies. In contrast are private capital investment firms such as 3G Capital, which he says almost carried off a hostile takeover of values-driven Unilever. 3G Capital’s goal is to preserve capital and maximize value for their clients.
An example he does not mention is The Carlyle Group, with $81 billion of corporate equity – more financial power than many countries in the world today. Such firms are far-removed from consumer awareness. Their only purpose is generating financial value and maximizing income for their private investors. Such firms may buy out companies, strip and sell assets, lay staff off, and can, in effect, devastate communities. They don’t have to be concerned about leading social issues of our day such as climate change, inequality, child labour, or other abuses of nature or humanity. In counterpoint, David Logan recommends books by financial journalist Michael Lewis.
David Logan admits that the vision of Ronald Reagan in the US, and Margaret Thatcher in the UK, to allow businesses to get on with what they do best, to ‘give back’ to society, and to engage in society’s great issues of the day ‘largely got lost in the rush to take advantage of the new opportunities that they helped open up’.
One step in the right direction today is The Global Sustainable Investment Alliance. Strategic Sustainable Investing (SSI) is an investment strategy that recognises and rewards leading companies that are moving society towards sustainability. For companies to play their role as citizens of the modern world, David Logan also cites the UN’s seventeen Sustainable Development Goals, the blueprint to achieve a better and more sustainable future for all.
He also mentions the Global Reporting Initiative (GRI), an international independent standards organisation that helps businesses, governments and other organisations understand and communicate their impacts on issues such as climate change, human rights and corruption.
David Logan’s book is an encouraging, hopeful, and pleasurable-to-read call for a better world through values-based ethical business decision-making, and should be a reference for anyone who wants to play a part in creating that world. For the book to be such a reference, though, I would hope at least these three modifications could be made: one, that subject and author/organisation indexes, including a small glossary, particularly of acronyms, be added; two, a correction of the statement that president Franklin D Roosevelt overturned the alcohol prohibition ban (which in fact was repealed by the twenty-first amendment passed in 1933 – a US president has no constitutional role in amending the constitution or repealing any constitutional provision); and, three, a citation to clarify the statement ‘the days of government doing everything for us are over.’ When and where did any government ever do everything for all of its citizens?
