Two serious criticisms of CSR have emerged from separate ends of the political spectrum. They are levelled at the heart of the purpose of business and what companies, particularly large companies are responsible for. From the Left, Joel Bakan, in his book and subsequent film, The Corporation, alleges that CSR is a smokescreen, enabling companies to hide their bad practices and strengthen their ability to resist regulation by government. From the Right, The Economist, building on arguments that

more »

... ark back to Milton Friedman and even Adam Smith, has argued that CSR is a waste of resources, distracting companies from their core roles of producing goods and services, and making profits. These criticisms are misguided but they have intellectual foundations; as such they risk undermining much that is important and require rebuttal. Both overplay the role that governments can and will play in regulating how companies behave, and underestimate the positive contribution that NGOs can make in shaping the social environment in which businesses operate. This paper argues that corporate responsibility (CR not CSR) cannot justifiably be seen as a hindrance to the effective evolution of a proper market governance system. On the contrary it is a crucial part of the only realistic game in town and could become the key building block in such an evolution.