Remarks by President McAleese at the Annual Dinner of the Institute of Chartered Accountants
Remarks by President McAleese at the Annual Dinner of the Institute of Chartered Accountants in Ireland O’Reilly Hall, UCD
Dia dhíbh a cháirde. Tá an-áthas orm bheith i bhur measc anseo ar an ócáid speisialta seo.
Thank you for that warm welcome, and thanks to Martin Wilson for inviting me here.
Back in March 2005, I was supposed to address your conference on that much‑vaunted topic of Corporate Social Responsibility but the funeral of Prince Rainier of Monaco unfortunately intervened. I am happy to return to the theme tonight and hope what I have to say won’t get between you and your digestion of a good dinner.
This Institute, as a regulator for the accountancy profession throughout the island of Ireland for almost 120 years, has long had a public interest function enshrined in its charter. So the issue of social responsibility within your profession and the business world it serves is nothing new to you. But you also know, where two or more are gathered in the name of corporate social responsibility, you can expect any amount of disagreement about its meaning and its benefits.
As a former member of Business in the Community in Northern Ireland, and now as Patron of Business in the Community Ireland, I can hardly claim to be an honest broker in this debate which in recent weeks has lost one of its most outspoken contributors, the late Nobel laureate, Milton Friedman. His view of corporate social responsibility and its advocates was notoriously contemptuous. In his book ‘Capitalism and Freedom’ he called CSR a "fundamentally subversive doctrine" and asserted that “the only social responsibility of business is to increase its profits.” According to him, businesses which outreached to the community through goodwill gestures like, for example, sponsorship were engaged in what he termed “hypocritical window-dressing” and “were unwitting puppets of the intellectual forces that have been undermining the basis of a free society.”
Frankly I find it hard to make the connection between a company logo on an under-12 football jersey and the end of democracy and freedom as we know them. In fact, for many individuals and communities all over Ireland, the enrichment of their lives by sport, the arts, education has only been possible because of generous corporate outreach, and for them that outreach was a crucial liberation. What is more, where corporate responsibility is about mainstreaming the best social and environmental practice right through the length and breadth of business operations, it is difficult to see how it can be described as anything other than good news for society.
When Friedman argues that businesses cannot have social responsibilities because they are essentially artificial rather than real persons, he ignores the very real, benign consequences in civic society that occur when those so‑called artificial entities freely decide to assume responsibility for helping to solve community problems or enhancing community life. We could all agree with him that Enron’s glossy corporate social responsibility report falls four square into the category of “hypocritical window-dressing” and that cynical PR exercises are positively not what we are talking about when we advocate CSR. What we are talking about is the world of business acknowledging its location at the heart of human life and the latent power it has to be an effective civic player with a reach beyond the concerns of its day-to-day business.
Just as the very existence of your Institute is an acknowledgment of the considerably enhanced power that the many can muster as opposed to the individual, so the concept of corporate social outreach is little more than an acknowledgment that, in trying to advance and strengthen our civic society, we do better if we harness the widest range of talents, skills, experience and resources; and for all that businesses are artificial, legal entities, they are formidable repositories of talent, skill, experience and resources which function best when utilised in the name of that business or corporation. Corporate social responsibility is an invitation to be part of that communal effort. It is the point at which a business acts generously and caringly beyond the fixed realm of share‑holder value and regulation and legal obligation, and in so doing, behaves as an active citizen, a responsible citizen, one who does not just obey the laws he is obliged to obey anyway but who will act way above the basic minima and help to create and sustain all those things which advance us humanly and decently, and which turn us from strangers into connected members of a vibrant community.
Active citizens run our sports clubs, senior citizens clubs, respite for carers, arts in the community programmes, literacy classes, charities, disability self-help groups, credit unions, environmental protection groups and a million other things that build up civic society and include people. They don’t have to do it. No law compels them to but they do it anyway for the greater good, and when they count the cost in terms of the time they have given, they will be the first to tell you that what they have received in terms of personal fulfilment far outweighs any element of self‑sacrifice. And of course among those active citizens you will find business men and women and employees of all sorts of businesses making their civic contribution as individuals, but what a huge difference it makes when those individual efforts are augmented and supported by businesses themselves and when the corporate world takes a conscious stand in favour of active citizenship. The world of business is heavily regulated. It is a world where virtuous behaviour is often imposed by law and bad behaviour penalised. When businesses treat employees fairly that is no more than we expect. When businesses protect the health and safety of consumers that is no more than we expect. When businesses act in full conformity with the law it tells us that they are doing what is expected of them. When businesses fund a youth club in a marginalized area or build houses for the poor of South Africa, or mainstream environmental concern in their everyday practice, that tells us a lot about that business and its values and its commitment to us, not as employees or consumers, but as fellow and sister citizens of Ireland and of the world.
Yes, successful, profitable businesses need the one hundred percent focus of managers and employees to create and sustain their success. But in tens of thousands of homes men and women, having given their best to their job, give their best also to their families and still find space to give their best to their communities. These are people who live beyond the one hundred percent. If real people can do it why not artificial entities that don’t have to do the night-time feeds or walk the dog.
We are very fortunate that in Ireland we have such a strong culture of investment by business in community outreach. It takes many different forms and is ever-evolving. Its proponents as well as its opponents make claims about its effect on reputation, on profitability, on corporate morale, on the environment, on the triple bottom line but I am with Albert Einstein on this when he says
“Not everything that counts can be counted and not everything that can be counted, counts.”
I suspect that the members of this Institute, after 120 years of counting and accounting, have a fair insight into Einstein’s analysis.
The full impact of corporate social investment does not always show up in the business ledgers and documents that you deal with but as mothers and fathers, as neighbours and colleagues, as friends and citizens, you feel its power when it is used for good. It translates into the civic confidence of a caring and successful civic society which has an ambition shared by all its citizens, even its artificial ones, to make Ireland the best it can be for all its people. There was a time, and on this island, when such a vision was indeed regarded as subversive. But those days are long vanished, those days of the ceann faoi, those days of narrow elites and wasted talents. In our modern democracy the language of corporate social responsibility is the challenge which a free, educated and high-achieving people offers to businesses big and small, to step out of the boardroom and into the street and to see if giving that percentage beyond the one hundred can take all of us together as a society to a place where everyone counts.
Go raibh míle maith agaibh.