Corporate Social Responsibility (CSR) is typically thought to be a topic in the field of business ethics. If a company is socially responsible, it is typically presumed to be ethical in being socially responsible. Solidifying this attribution, some scholars of CSR have even sought to explicitly base it on specific ethical principles. However, contrasting a corporate policy with societal norms or specifying how corporations can get in line with them is not to provide an ethical justification. Even if a societal norm is consistent with an ethical principle, the norm itself is something that is, rather than a justification for what ought to be. To attempt to derive ought from is is known as the naturalistic fallacy. It is like getting what ought to be from a melon ripening in a field. Is does not imply or justify ought.
By distinguishing between rules based on societal institutions (e.g., a rule for making a promise) and moral obligations (e.g., fiduciary obligation), John Rawls provides a good explanation for why business & society (e.g., CSR) is qualitatively different than business ethics. According to Rawls, a social contract philosopher for whom justice is based on the ethical principle of fairness, the rule or procedure to be followed in promise-making does not by itself give rise to a moral obligation. “To account for fiduciary obligations we must take the principle of fairness as a premise. Thus along with most other ethical theories, justice as fairness holds that natural duties and obligations arise only in virtue of ethical principles. These principles are those that would be chosen in the original position.” Rawls’ original position refers some explanation.
The original position is a level floor of sorts by which principles of a social contract can justly be adopted. It is not an actual meeting; rather, its key aspect is a veil of ignorance, whereby one does not know what office or position he or she will occupy. Rather than sitting down with other people and making a contract, one simply assumes the veil and asks oneself, “To which principles would I freely give my consent if I didn’t know my situation in the institution or system?” Those principles arrived at thusly are to be taken as the operative ethical principles on which moral reasons are based.
Essentially, Rawls is saying that the core of an ethical analysis is applying ethical principles through moral reasons to justify or castigate a given practice. These principles, together with the relevant facts of the circumstances, are what “determine our obligations and duties, and single out what count as moral reasons. A (sound) moral reason is a fact which one or more of these principles identifies as supporting a judgment.” (Rawls, p. 348) In other words, to justify something by an ethical principle is to give moral reasons based on that principle. Such reasons resonate with should be rather than necessarily what is. Such is the name of the game in business ethics: the project is to evaluate an actual or hypothetical practice or rule according to principles and reasons grounded in ought.
“By contrast, institutional requirements, and those deriving from social practices generally, can be ascertained from the existing rules and how they are to be interpreted.” (Rawls, pp. 348-49) That is, rules or norms, such as corporate policies or decisions, are based on existing practices, rather than on what ought to be the case. “The norms applying to persons who are players in a game depend upon the rules of the game. Whether these requirements are connected with moral duties and obligations is a separate question. This is so even if the standards used by judges and others to interpret and to apply the law resemble the principles of right and justice, or are identical with them.” (Rawls, p. 349) So even if a social norm bearing on a corporate policy or decision dovetails with an ethical principle, the norm itself cannot justify ethically, as in providing moral reasons, because a norm is based on existing practices rather than an ethical principle agreed to under some ideal condition.
Therefore, Corporate Social Responsibility, which relates societal norms to corporations in order to identify and explain divergences as well as to suggest ways in which corporate policies and decisions can move closer to the norms so as to achieve greater legitimacy for the corporation in society, may seem to provide ethical justification; indeed, the convergence itself may even seem ethical in nature. However, a relationship between two extant rules or practices does not get us to an ethical principle decided in the original condition scenario. How a rule relates to a practice is not an ethical principle.
In Rawls’ example, establishing a rule for how promises are to be made does not in itself create an obligation (i.e., justify why people should keep promises). Hence, Rawls (p. 349) warns, “The tendency to conflate the rule of promising and the principle of fidelity (as a special case arising from the principle of fairness) is particularly strong.” The former “is defined by the existing constitutive conventions, while the latter is explained by the principles that would be chosen in the original position.” Corporate Social Responsibility, or, more generally, the field of business & society as a field, is based on existing constitutive conventions (e.g., norms, policies/rules, decisions, outcomes). A corporation is criticized for not being socially responsible because it deviates from an extant societal norm. Whether the norm ought to be is another question. Regarding that norm, or the corporate policy or decision at issue, business ethics is in the business of providing and applying moral reasons by appealing to ethical principles that ought to be even if they are not extant in existing conventions. So to say that a corporation is socially responsible is not to say that it is ethical. The corporation may very well be highly ethical, but one cannot reach that determination on the basis of CSR; a norm cannot justify ethically, as if what people are accustomed to doing were reason enough for what they should be doing. Ought cannot be derived from is.
Click to read the existing comments on whether CSR is sufficiently justified ethically, and/or to add a question or comment the existing comments or more generally on Rawls’s theory of justice as fairness, corporate social responsibility and business ethics.
Rawls, John. A Theory of Justice (Cambridge, Mass: Belknap, 1971)