Corporate Britain Needs More Than Rules to Rediscover a Sense of Purpose

Feb. 9, 2012 - PRLog -- But the ultimate aim should be to build a culture in which staff and management naturally have a sense of moral purpose that goes beyond pure profit maximisation.

This was the conclusion of a round table jointly organised by Cass Business School and the Spiritual Capital Foundation in January 2012. Participants were drawn from a range of academic disciplines and professional backgrounds, to examine Milton Friedman’s famous assertion that the only social responsibility of a business is to “engage in activities designed to increase its profits so long as it stays within the rules of the game.”

“The rules of the game have changed since Friedman’s day. Businesses today are expected to optimise profits in a sustainable fashion, not just to maximise them,” said Professor Paul Palmer, Associate Dean for Ethics, Sustainability and Engagement at Cass.

The discussion comes at a time when corporate Britain faces profound questions, with the UK government actively encouraging different corporate ownership models, and increasing scrutiny on executive pay. The round table encouraged chief executives to redefine “winning” the game in a corporate context, to include the company’s effects on wider society.

There was general concern that the growth of rules-based systems, especially in the financial sector, has encouraged a mechanical compliance culture without a deeper sense of individual duty or personal principles.  “Rules can be helpful to create the habit of good behaviour, but they cannot alone bear the weight of moral responsibility,” said Giles Fraser, former Canon of St Paul’s Cathedral who was responsible for engagement with the City of London.

Inevitably, staff reflect the moral values in wider society when they join a company. But panellists argued that this places an even greater responsibility on businesses to create a moral purpose in their own workplace.  Corporate transparency is needed to increase the probability of moral failings being revealed. And participants also emphasised the value of extensive professional training in giving staff personal capital in maintaining their reputation and that of their company.

Cass offers the widest portfolio of specialist Masters programmes in Europe. It also has the largest faculties of Finance and Actuarial Science (http://www.cass.city.ac.uk/courses/masters/courses/actuar...) and Insurance in the region. It is ranked in the top 10 UK business schools for business, management and finance research and 90% of the research output is internationally significant.   Cass’s MBA (http://www.cass.city.ac.uk/courses/mba), specialist Masters and undergraduate degrees have a global reputation for excellence, and the School supports nearly 100 PhD students.

Spiritual Capital Foundation is a non-profit organisation that brings together leading voices from a wide range of disciplines and perspectives including business, industry, academia, journalism, the arts and government. These voices contribute to an ongoing creative conversation about the role of values in 21st century business. (www.spiritual-capital.org)

# # #

Cass Business School (http://www.cass.city.ac.uk/) is one of Europe’s leading providers of business and management education, consultancy and research.