Editor's Page
The political role of business William Sneath, chairman of the board of Union Carbide, addressed the recent Southern Governors' Conference. Here, verbatim, is part of what he had to say. A handful of economists and others tell us that business has no social role beyond the one that's served by the efficient allocation of resources. It appears, however, that this view is held mostly by individuals with no responsibility for managing a large business. Most corporate managers regard social responsibility as a mandate. We know that our long-standing and legitimate rights to pursue private business objectives are subject to erosion if those objectives—and our practices—are not perceived to be in the public interest. But the question is not simply one of self-defense. Business is an integral part of society. Our employees are part of the community. Therefore, we must share its goals and share the work of achieving them. That's true whether the goal is energy conservation, environmental protection, or increased opportunity for women and minorities. Business has helped with all of these, and with others, and we must be part of further progress. The issue is rather one of balance. Few of the corporations I know about seek to avoid their responsibilities. However, many do resist the efforts of activist groups to have them address a single cause or a narrow issue in advance of a broad consensus in the community about the direction to take, or the speed at which to move. In my view, we would create more problems than we solved—for the corporation and the community—by doing otherwise. Corporations also look for recognition from the community that their social role must be balanced against the need to perform their chief function, which is an economic one. The fact is, that even the most responsible of companies cannot escape the discipline of the income statement and the balance sheet. Felix Rohatyn, chairman of New York's Municipal Assistance Corporation, put it very well in a recent article in the New York Times. He said: "Most of us know that there is more to business than just profits. That there is the moral imperative for affirmative action, social responsibility, environmental protection. But it is all within the framework of a viable, ongoing economic and social unit and with the recognition that, for the businessman and his company, tomorrow always comes." I have no doubt that most state officials and legislators know that very well, and appreciate the financial constraints a business manager must contend with. Yet something seems to happen on the way to the legislative chambers. Frequently the result is new laws and regulations affecting business, some of which are necessary and useful, and many others that are simply costly and unproductive. I could not say how many of each category there were among the 134,000 new laws introduced at the state level last year, many of which affected business. But policymakers should be very clear about the cost to the community of new laws and regulations, and reject those that place unnecessary obstacles in the way of increased business activity. Thus it seems to make eminent good sense for us to work together to reduce the number of unrealistic rules, and it's for that reason so many businessmen have been learning to think and speak in the language of politics. The public sector has invaded the private as never before in our history, a phenomenon that has made knowledge of and involvement in the public policy process an inescapable part of a business manager's responsibility. •
Views expressed on this page are those of the author only and not necessarily those of ACS
Oct. 23, 1978C&EN
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