Assignment

The Business Case for Asserting the Business Case for Business Ethics

Alex C. Michalos

Published online: 26 April 2013

� Springer Science+Business Media Dordrecht 2013

Introduction

The BC and ABC Theses

The business case for business ethics is the thesis that being

morally good is materially good for business. I will call this

the BC thesis. The thesis of my essay is that asserting the

business case for business ethics is materially good for

business. I will call this the ABC thesis.

Some people may recall that in Michalos (1995, p. 57), I

argued that the worst argument for business ethics was the

argument that ‘‘a businessperson ought to be morally good

because there is money in it or, at least, there is more money

in moral goodness than in moral evil.’’ As articulated in that

article, the worst argument was just another formulation of

the business case for business ethics, i.e., for the BC thesis.

Some people might also recall that in Michalos (2008a)

I showed that this bad argument was first identified and

demolished by the philosopher-statesman Marcus Tullio

Cicero in the first century BCE. In case your reading list

has not included either the particular piece by Cicero or

me, his demolition of the BC thesis took the form of

pointing out that if your primary reason or motive for

action is self-interest or profits, then, when there is more to

be gained by morally evil than morally good action, you

will prefer the former, which would be morally wrong in

itself and undermine the institution of morality. In short,

the BC thesis is plainly a morally deficient argument for

business ethics. Incidentally, it is probably worthwhile to

emphasize that given the unsoundness of what I call the

Loyal Agent’s Argument (Michalos 1999; Poff 1999),

whether the bottom line is one’s own or a corporation’s

profits, the BC thesis is morally deficient.

The ABC thesis that I want to defend in this essay,

namely that asserting the business case for business ethics

is materially good for business is a variant of a thesis that

will be familiar to anyone who has read Niccolo Machia-

velli’s The Prince (1980). Here are the crucial passages.

‘‘A prince…ought to take great care that nothing goes out of his mouth which is not full of the five quali-

ties…all pity, all faith, all integrity, all humanity, and all religion. Nothing is more necessary than to have

this last quality. For men, universally, judge more by

the eyes than by the hands…Everyone sees what you seem to be, but few touch what you are…And with respect to human actions, and especially those of

princes where there is no judge to whom to appeal,

one looks to the end. Let a prince then win and

maintain the state—the means will always be judged

honorable and will be praised by everyone; for the

vulgar are always taken in by the appearance and the

outcome of a thing, and in this world there is no one

but the vulgar’’ (Machiavelli 1980, p. 109).

Recasting Machiavelli’s target-student from an aspiring

prince in the early sixteenth century to an aspiring corpo-

rate leader in the early twenty-first century, one might say

that in his view there were two necessary conditions for

success. First, it is necessary to appear morally virtuous

and second, to make a sustainable profit. For Machiavelli,

the way to appear to be morally virtuous was to talk a good

game, i.e., to preach pity, integrity and so on, whatever one

practiced. As someone once said, ‘‘Sincerity is everything.

Professor A. C. Michalos is Professor Emeritus from the University of

Northern British Columbia.

A. C. Michalos (&) Brandon, Manitoba R7A 4P9, Canada

e-mail: [email protected]

123

J Bus Ethics (2013) 114:599–606

DOI 10.1007/s10551-013-1706-2

If you can fake that, everything else is easy.’’ If you can

also make a profit over some reasonable length of time

while talking a good game then no one would ever question

the reality of your virtue. ‘‘Where there is no judge to

whom to appeal, one looks to the end.’’ For a prince, the

end was ‘‘to maintain the state.’’ For our contemporary

corporate leader, the end is to maintain a sustainable profit.

Machiavelli assumed that his two necessary conditions

were matters of fact, based on historical evidence. In The

Prince and his longer The Discourses on the First Ten

Books of Titus Livius (Machiavelli 1970), this was his

primary mode of defending claims. He would state his

thesis and then present one or more historical examples that

were consistent with it. I don’t know if anyone has ever

done any rigorous empirical testing of his thesis concerning

two necessary conditions for success. It is, of course, easy

to think of additional examples that are consistent and

others that are inconsistent with the thesis. It would be

difficult to find persuasive real-life cases of leaders who are

uniformly ‘‘making it by faking it,’’ i.e., cases of leaders

who always or usually deliberately merely pretend to be

morally good agents and who always or usually generate a

sustainable profit however that is defined. People like

Bernie Madoff often end as he did. Since we cannot open

up people’s heads or hearts to observe their deepest

intentions, we can only judge their intentions by their

behavior (verbal and otherwise) and its consequences,

which is unfortunate to say the least.

Validation and Vindication

In the middle of the twentieth century, the positivist phi-

losopher of science, Herbert Feigl, expanded Machiavelli’s

observation that in the absence of a judge, ‘‘one looks to

the end’’ in a somewhat famous article (Feigl 1950). In that

article, among other things, Feigl was grappling with the

so-called problem of induction. Briefly stated, the problem

was how to justify inductive inferences, i.e., inferences

from the observed to the unobserved. The justification for

accepting the conclusions of deductively valid arguments

on the basis of their premises was plain for all to see. If the

premises of such arguments are all true and there are no

methodological flaws, then anyone accepting the premises

and rejecting the conclusion would be guilty of self-con-

tradiction. In such cases, the conjunction of the premises

and denial of the argument’s conclusion would be a self-

contradictory or logically false proposition. For inductively

valid arguments no such transparently acceptable justifi-

cation was or is available because by definition (as sug-

gested above) the conclusions of inductive arguments

always go beyond the information contained in their pre-

mises. For example, even if every observed duck has died

sooner or later, the generalization that all ducks die is not

logically guaranteed by the premise because that general-

ization applies to all observed and unobserved ducks and

nobody knows or can know how or even if the all unob-

served ducks end their lives. In short, the conjunction of the

premise that all observed ducks have died and the denial of

the generalization that all ducks die (i.e., there is some

duck that does not die) is not self-contradictory.

Feigl argued that in the absence of a rule (i.e., a criterion

by which to judge one’s inferences as well as one’s rules

for warranting inferences), one ought to proceed prag-

matically and justify one’s inferences and rules on the basis

of their consequences. He called our standard rule-fol-

lowing procedure for justifying inferences by showing that

they were patterned after deductively valid argument forms

with all true premises and no methodological flaws vali-

dation. Justifying the rules themselves by the pragmatic

procedure of showing that, in my terms, their acceptance

produces at least as many benefits as costs, all things

considered, he called vindication.

I think that Machiavelli’s observation was accurate and

that Feigl’s distinction between validation and vindication

is a useful elaboration of it which has direct application to

ethics in general (a point emphasized by Feigl) and to the

ABC thesis in particular. As you might have expected,

there is a bright and a dark side to the story. The good news

is that very often the justification for moral decisions or

judgments proceeds by validation. For example, there is

wide-spread, general acceptance of the moral maxims

condemning harm to innocent people by things like mur-

der, assault, theft or blatant lies. As well, there are often

fairly clear cases in which such moral rules are deliberately

violated or not, and there are generally accepted procedures

to follow to make appropriately justified decisions regard-

ing guilt or innocence leading to moral blame or praise.

The bad news is that often enough particular cases are

not easily subsumed under generally accepted rules or

different rules might be applied and/or applied in different

ways leading to different decisions. As Aristotle famously

observed over 2,300 years ago, different subject matters,

and he referred to political science generally or what we

would call ethics in particular, do not lend themselves to

the same sort of rigor as other matters. Hence, the ‘‘edu-

cated person,’’ he wrote, ‘‘seeks exactness in each area to

the extent that the nature of the subject allows’’ (Aristotle

1999, p. 2). If he had read Feigl, then he might have said

that, where ethical issues are concerned, one should often

expect justification to take the form of vindication.

Well, you might ask, what’s so bad about that? In a

word, plenty. I am, as many people know, a pragmatist.

I confess I was a teenage logical positivist and I suppose

some of the boy remains in the man. In fact, many posi-

tivists were and probably still are pragmatists. Pragmatists

600 A. C. Michalos

123

by definition believe in judging propositions, human

actions, events, theories and institutions by their conse-

quences. The one great problem that pragmatists have is

that there is no generally accepted rule book that tells us

which consequences to count and how to count them. That

is why you can find thoughtful, apparently well-intentioned

pragmatists in bed with practically anyone from Adolf

Hitler to Jesus Christ. You can also find ill-intentioned

pragmatists committing the Fallacy of Special Pleading

(Michalos 1970), making their consequentialist cases by

advertising and counting only features favorable to their

cases and neglecting features that are unfavorable. Over

many years I have spent a lot of time and energy thinking

and writing about this great problem, e.g., Michalos (1978,

1985, 1997, 2003). All of my work on measuring the

quality of life has been and is motivated by my desire to

find a generally acceptable, rigorous, quantitative solution

of the pragmatists’ problem of precisely specifying a good

way, if not the very best way, of counting consequences to

press into the service of pragmatic justifications or, in

Feigl’s terms, vindications. I suppose that like Moses, I will

not see the promised land, but I hope others will.

Motives and Profits

In my presentation (Michalos 2010) at the Second World

Business Ethics Forum at Hong Kong Baptist University in

2008, I spent some time examining Robert Reich’s (2007)

book and how he seemed to address first, the four logical

possibilities involving the mixed motives of doing some-

thing because it is morally right versus doing something

because it will make a profit, and second, the following

four possibilities involving motives and actual payoffs.

1. Motivated to do the right thing (morally speaking) and

actually make a profit.

2. Motivated to do the right thing and actually not make a

profit.

3. Not motivated to do the right thing and actually make a

profit.

4. Not motivated to do the right thing and actually not

make a profit.

I did not consider the more complicated cases involving

both mixed motives and actual payoffs, i.e., an agent

(person or company) might be

1. Motivated to do the right thing (morally speaking) and

motivated to make a profit and actually make a profit.

(Successful CSR agent)

2. Motivated to do the right thing and motivated to make

a profit and actually not make a profit. (Unsuccessful

CSR agent)

3. Motivated to do the right thing and not motivated to

make a profit and actually make a profit. (Reich’s

supposed unlikely or non-existent CSR agent)

4. Motivated to do the right thing and not motivated to

make a profit and actually not make a profit. (Reich’s

real CSR agent)

5. Not motivated to do the right thing and motivated to

make a profit and actually make a profit. (Successful

pure capitalist agent)

6. Not motivated to do the right thing and motivated to

make a profit and actually not make a profit. (Unsuc-

cessful pure capitalist agent)

7. Not motivated to do the right thing and not motivated

to make a profit and actually make a profit. [An agent

(e.g., artist, scholar, athlete) pursuing beauty, truth or

excellent performance for its own sake and receiving

excellent material rewards]

8. Not motivated to do the right thing and not motivated

to make a profit and actually not make a profit. (A pure

hedonist agent?)

It may be noticed that the above eight alternatives just

sketched do not include Machiavelli’s insistence on

appearance versus reality. If you recall your truth-table

exercises from elementary logic, then introducing the

motive of appearing to be motivated in one way or another

to our matrix would increase its length from 8 to 32 options

(2 5 ). To keep matters as simple as possible, I am not

introducing this motive here.

Faced with the set of eight possibilities, it seems to me

that Reich would insist that a corporate agent is only doing

the right thing morally speaking if he or she is motivated to

do the right thing and not motivated to make a profit and

actually does not make a profit, i.e., Case 4. For Reich,

virtue must be its own and only reward. If a virtuous agent

actually profits materially from his or her morally good

acts, he would not regard the agent as morally praisewor-

thy. Whenever such an agent actually makes a profit, as in

Case 1 or Case 3, Reich would assume that he or she is

only doing what a good capitalist ought to do (i.e., make a

profit regardless of other considerations), is not motivated

by a desire to do the right thing morally speaking and

therefore is not entitled to moral praise. That is, by defi-

nition, Reich rules out the kinds of mixed motives (Cases 1

and 3) that might make sense of the very idea of being

ethical in business or operating a business in a socially

responsible way. In place of Cases 1 and 3 Reich insists on

Case 5. Such a priori destruction of the very possibility of

business ethics or CSR seems to me unwarranted and

inconsistent with the widely held view that people rou-

tinely have mixed motives.

I cannot pursue all the interesting historical antecedents

of the view that virtue must be its own and only reward.

Asserting the Business Case for Business Ethics 601

123

I suspect the view would have been attractive to some of

the ancient Stoics (Annas 1993) and probably to Immanuel

Kant (Michalos 2001). In The Prince, Machiavelli argued

that given the choice between the virtue of being generous

and the vice of being miserly, a prince ought to prefer the

latter because the former would be unsustainable without

excessive taxation which would finally lead to his being

hated and overthrown. On the other hand, one might argue

for anonymous generosity on the grounds that it removes

the possibility of the actor being intentionally rewarded for

his or her acts of generosity. Psychological hedonists claim

that people naturally pursue pleasure and ethical hedonists

claim that people, morally speaking, ought to pursue

pleasure (Brandt 1967). In both cases, the ultimate payoff

of human action, including virtuous action, is pleasure.

While pleasure is not a material reward, it is a reward

beyond the act of doing the right thing because it is the

right thing to do. Plato and Aristotle both took pleasure

very seriously as an important by-product of virtuous

action. Summarizing their views, I wrote,

Although Plato clearly rejected the idea that the good

life was identical to a life of pleasure, he believed that

pleasure had a useful role to play in a good life, and

he recognized at least five theories of pleasure’s

origin,…a desire satisfaction theory, a needs satis- faction theory, a harmony theory, a true pleasures

theory, and a class theory of pleasure…Plato’s greatest student, Aristotle, believed that EUDAI-

MONIA, happiness, ‘‘living well and doing well’’ is

achieved insofar as one deliberately engages in the

unimpeded excellent exercise of one’s capacities for

the sake of doing what is fine, excellent, or noble,

provided that the deliberation and activities are

undertaken from a virtuous character and accompa-

nied by an appropriate amount of external goods and

pleasure (Michalos 2012).

In the Republic and other treatises, Plato referred to

goods like ‘‘good reputation’’ and pleasure as ‘‘handmaids

to [moral] virtue,’’ never as proper and sufficient reasons

for virtuous action (Michalos 2012). In any event, as this

cursory review suggests, the idea that virtue must be its

own and only reward is questionable and has been rejected

outright by some excellent philosophers.

Corporate Social Responsibility Report 2010

I have taken a lot of time to warn you that in my defense of

the ABC thesis, you should not expect more and you will

not get more than a rough vindication. I stumbled over the

ABC thesis while reading some articles in Canada’s most

widely circulated, popular, weekly magazine called

Maclean’s Magazine. There were four articles in the June

21, 2010 issue with provocative titles, ‘‘Corporate Social

Responsibility Report 2010: Good For Business’’ (Ma-

clean’s 2010), ‘‘Ethics: A Conscience Choice’’ (Gohier

2010), ‘‘Crisis Management: When Things Get Messy’’

(Kirby 2010), and ‘‘The Top 50: Raising The Bar’’ (Jantzi-

Sustainalytic analysts 2010).

The short lead article introduced the whole set of articles

with the assertion that ‘‘for the second year in a row,

Maclean’s has partnered with Jantzi-Sustainalytics, a glo-

bal leader in sustainability analysis, to present the country’s

Top 50 Socially Responsible Corporations’’ (Maclean’s

2010, p. 37). The fact that two for-profit organizations had

‘‘partnered’’ in producing and marketing a report on the

‘‘Top 50 Socially Responsible Corporations’’ for profit

struck me immediately as clear supporting evidence for the

ABC thesis. Of course, I do not know if the report actually

made a positive contribution to Maclean’s and Jantzi-

Sustainalytics’s financial bottom line, but since it is the

second report, it seems likely that it did. If so, that report

would satisfy one of Machiavelli’s necessary conditions for

success. I also have no way of knowing if those responsible

for the whole project (assessments and publication) were

motivated by a desire to appear to be motivated by a desire

to do the right thing (i.e., reward moral virtue) or if they

were genuinely motivated by a desire to do the right thing

or both. The titles and the content of the articles certainly

give the appearance of coming from a motivation to do the

right thing. Hence, Machiavelli’s other necessary condition

for success was also satisfied. Thus, the ‘‘Corporate Social

Responsibility Report 2010’’ seems to provide a clear win–

win–win scenario for Maclean’s, Jantzi-Sustainalytics, and

Machiavelli, not to mention the 50 award winners

themselves.

Maclean’s and Jantzi-Sustainalytics’ understanding of

CSR is not very clear. It seems to be essentially connected

to their idea of sustainability, which is also never spelled

out, but seems to be very close to what most people would

regard as efficiency. Sustainable practices or policies are

often practices or policies that do or probably will produce

greater benefits with the same or fewer costs, e.g., the Bank

of Montreal’s plan ‘‘to be carbon neutral by the end of

2010’’ should produce an increased environmental benefit

that ‘‘dovetailed nicely with cost-cutting’’ in dollars (Go-

hier 2010, p. 38). The idea of efficiency is very attractive to

pragmatists and moral consequentialists, but its strengths

and weaknesses are practically the same as those con-

cerning the counting of consequences. Efficiency measures

are fundamentally ratios of benefits to costs, or outputs to

inputs, and what they tell us depends, among other things,

on what one counts as benefits or costs, outputs or inputs

(Michalos 2008b). In Michalos (1978), I explained how

workable accounts of rationality and morality could be

602 A. C. Michalos

123

provided in terms of a robust account of efficiency, but few

if anyone found my explanations compelling. Nevertheless,

my main point here is that in principle there is nothing

wrong with thinking about sustainability as efficiency. It all

depends on what one loads into one’s notion of efficiency,

and it is worth noting that so far as many business people

are concerned, such relatively non-material things as

‘‘reputational benefits’’ are acceptable candidates for

inclusion in efficiency calculations (Gohier 2010, pp. 38

and 40).

Jantzi-Sustainalytics’ methodology for evaluating cor-

porations for their CSR performance is no clearer than their

account of sustainability. The long quotation below pro-

vides the essentials as reported in Maclean’s.

The Top 50 Socially Responsible Corporations in

Canada were selected on the basis of their perfor-

mance across a broad range of environmental, social,

and governance (ESG) indicators…The selected companies rank at the top of their respective peer

groups in Jantzi-Sustainalytics Global Platform.

These companies have demonstrated strong perfor-

mance in areas such as environmental initiatives,

impact on local communities, treatment of employees

and supply-chain management. Some are notable for

their development of products or services that con-

tribute directly to sustainability.

Each of the companies featured is either Canadian-

listed or a wholly owned subsidiary of a foreign-listed

company with significant operations or brand pres-

ence in Canada… Given that Canadian subsidiaries of foreign compa-

nies are inextricably linked to their parent companies,

the evaluation is based on the performance of the

foreign corporate entities. Jantzi-Sustainalytics’

research process includes a thorough examination of

company documents, media sources, online dat-

abases, government sources and NGO research, as

well as direct communication with key stakeholders.

Analysts use a Best-of-Sector TM

methodology to

compare companies within a given peer group to

industry best practices…(Jantzi-Sustainalytic ana- lysts, 2010, p. 54).

It is worth noting that if Canadian subsidiaries can be

evaluated on the basis of ‘‘the performance of the foreign

corporate entities,’’ then the evaluation game has some

attractive fixed costs as one takes the game from Canada to

the USA, to Europe, and anywhere else where transnational

corporations operate in a network of commercial and/or

political jurisdictions. Analyses done for transnationals like

Adidas Group, Honda, L’Oreal, and Sony Corp., for

example, can be used in many different contexts, attracting

benefits over and over from a single investment.

Following the suggestion at the bottom of the text just

quoted, I visited www.sustainalytics.com for ‘‘more infor-

mation on the rating criteria,’’ and on June 20, 2010, I sent

the following message to the company.

Can you send me a copy of the procedures and cri-

teria used to get the Corporate Social Responsibility

Report 2010 that was featured in June 21 articles, or

the report itself if possible?

On June 22, I received the following reply.

Jantzi-Sustainalytics provided the research for the

Maclean’s list, which you can view on their website.

There is also a section on the site which outlines the

research methodology which you can view by click-

ing the link below.

http://www2.macleans.ca/2010/06/14/jantzi-macleans-

csr-report-2010/

If you have any further questions, please feel free to

contact me.

I went to the Maclean’s website, did not find what I

needed, but did find these interesting comments.

Our second annual survey of companies in Canada

that prove it pays to have a conscience…The under- lying goal is the same: make the world a better place.

As well as the Top 50 list…we look into how CSR might help with major PR problems, like BP’s oil

spill, and whether the recession made the business

world any less socially responsible.’’

A few minutes later I wrote back to Jantzi-Sustainalytics.

Hi…Thanks very much for the additional informa- tion. When I went to the website to find the meth-

odology and criteria, all I got was the entry to all

Jantzi products. I could not find a button to press that

would give me the methodology and criteria. Can you

please direct me right to that spot. The company

website is huge.

Having had no response, the next day (June 23) I wrote

again.

Hi again…Were you able to find directions to the methodology and criteria for me?

A few minutes later the following reply came.

Unfortunately, the link at the bottom of the Maclean’s

page was misleading. There is no additional infor-

mation on the Sustainalytics website pertaining to the

criteria and rating for the 50 Most Socially Respon-

sible Corporations list. The methodology used for the

Maclean’s list is based off of Sustainalytics’ regular

research methodology and was modified for this

Asserting the Business Case for Business Ethics 603

123

project. The link below provides some information

about our regular research process.

http://www.sustainalytics.com/sustainalytics-global-

platform

I’m sorry I couldn’t be of more help. Please feel free

to contact me if you have any further questions.

At http://www.sustainalytics.com/indexes, among other

things, I found this.

In January 2000, Jantzi Research launched the Jantzi

Social Index R

, partnered with Dow Jones Indexes.

The JSI, a socially screened, market capitalization-

weighted common stock index modeled on the S&P/

TSX 60 consists of 60 Canadian companies that pass

a set of broadly based environmental, social, and

governance rating criteria. The JSI has begun to

generate the first definitive data on the effects of

social screening on financial performance in Canada.

From the second sentence in the preceding paragraph, it

appears as if there are 60 companies in the dataset from

which 50 made their way to the Top CSR performers. If

that is indeed the case, then 50/60 = 83 % of the CSR

competitors rose to the top of their ‘‘peer group.’’ That

would suggest that the bar for achieving distinction as a top

CSR performer was very low, too low in fact to warrant

any sort of praise, moral or otherwise, for those compa-

nies. Hopefully, someone at Maclean’s or Jantzi-Sustain-

alytics will be able to tell us exactly how many CSR

competitors were in the dataset from which the top 50 were

chosen.

At the same website, we are given some questions used by

the analysts in their selection of ‘‘rating criteria’’ for the JSI.

They included such things as ‘‘Is each rating criterion

researchable?…measurable?…Is there a business, corporate social responsibility, and/or scientific foundation for each

rating criterion?’’ No specific indicators are given, although

we are told that there are some ‘‘exclusionary indicators’’

such as ‘‘the production of nuclear power, the manufacture of

tobacco products, weapons-related contracting.’’

At http://www.sustainalytics.com/sustainalytics-global-

platform, among other things, I found this.

The Jantzi-Sustainalytics Global Platform is the

foundation of the research we offer to asset owners,

plan sponsors, investment managers and other

stakeholders…Jantzi-Sustainalytics provides clients with comprehensive analysis on corporate ESG per-

formance…The Jantzi-Sustainalytics model incorpo- rates between 60 and 100 indicators, weighted

according to the industry in which they are operating.

These include a broad range of core and industry-

specific indicators that address sustainability policies,

management systems and performance outcomes.

In sum, this is all the information I could find about the

procedures and criteria used to get the Corporate Social

Responsibility Report 2010, according to Maclean’s and

Jantzi-Sustainalytics websites.

Auditing the CSR Report

At http://www2.macleans.ca/2010/06/14/social-responsible-

corp-2010/, there are a number of comments posted on the

web concerning the Maclean’s articles. Here is a sample.

Jana de Lottinville: ‘‘…For corporations, social responsibility is no longer an ancillary activity but an

integral part of their business models. It’s ‘doing well

by doing good’’ and more companies are committed

to this both because it’s the right thing to do and

because it’s good for business.

Hosertohoosier: ‘‘Corporations do good by making

profits, paying taxes, obeying the law, creating jobs, and

conducting research. The impact of a few do-gooder

deeds pales in comparison to the social benefits of things

like the invention of the PC, television or the automobile.’’

Pdpd: ‘‘…we can recycle good-old ‘yay-CSR/boo- profit’’ or Friedmanite ‘boo-CSR; it’s bad for the

economy’ arguments, but at the end of the day whether

CSR is good or bad for a given situation (or company) is

probably entirely contextual…there is no solid data on profitability. Companies that invest heavily in CSR tend

to perform similarly to peers in that respect…Firms ‘doing’ CSR is almost always a clear ‘net social benefit’

at the local level, and should be applauded as such.

But it is entirely possible that CSR can act as a cynical

PR campaign tool to frustrate more formal regula-

tion. So that’s what I meant by the importance of

context.’’

Duff Conacher: ‘‘The title of the report is misleading

because the information and factors used to rank

some of the companies is dangerously incomplete

(especially for 10 or so financial services companies

listed)…Anyone who digs into the details will soon realize that the information and factors used to

measure the companies does not, in many cases,

measure the impact of the companies’ fundamental

activities. For example, no one knows the details of

the more than $1 trillion in outstanding loans and

investments and insurance policies held by the 5 big

Canadian banks, 3 other banks and 2 insurance

companies that are included in the top 50 list, nor any

details about their customer service record, because

these financial institutions are not required by law to

disclose any details (as the federal government con-

tinues to protect them from actual accountability by

604 A. C. Michalos

123

refusing to pass a law requiring disclosure.) A law

requiring at least some disclosure of this information

has existed in the U.S. for more than 20 years…As long as the people and organizations who produce

these so-called corporate responsibility reports with-

out having the key information they need to actually

measure the level of responsibility of the companies,

the reports will continue to provide cover for irre-

sponsible activities by corporations.’’

These comments suggest that different people have

different ideas about exactly what should be counted as

CSR activities and the value of praising or blaming com-

panies for their performance of such activities. There is not

a great deal of agreement on the meaning of basic concepts

connected to CSR, on appropriate assessment criteria, data

availability, measurement, aggregation, and auditing pro-

cedures. In short, the field is ripe for exploitation, and no

one should be surprised if companies like Maclean’s and

Jantzi-Sustainalytics find a profitable niche in the field.

Having explored and explained some of the philosoph-

ical foundations of the ABC thesis and some of the prac-

tical problems I and others encountered in trying to assess

the methodological foundations of the Maclean’s/Jantzi-

Sustainalytics Corporate Social Responsibility Report

2010, I set out to provide a kind of auditing overview of the

top 50 CSR performers based on a subset of the eight

alternative kinds of agent motives and payoffs sketched

earlier, and the information provided by the Maclean’s

articles on the top 50 performers. Since I did not have

access to any of the ‘‘60 to 100 indicators,’’ their ‘‘weights’’

or the aggregation procedures used to distinguish the top 50

companies from some others, I knew that I could not

produce any sort of detailed audit of the adjudication

process leading to the Report. All I could do was work with

the Maclean’s articles and the extra material found on the

websites to try to get some sense of how the various

companies performed according to our eight alternatives.

This proved to be an unproductive exploration for several

reasons.

First, since I did not have access to the inner workings of

the minds of those who produced and/or implemented the

policies and programs leading to their companies’ inclu-

sion in the top 50 CSR performers, I was left with

appearances as my working data for the first two conjuncts

of each of the eight alternatives, i.e., I was left guessing

real motives on the basis of activities that appeared as if

they were motivated by the aims of doing the right thing

and making a profit. Second, while in principle one might

know exactly the financial payoffs connected to the various

policies, activities and/or products described in the articles,

in fact I did not have access to those payoffs. Hence, again,

I was engaged in guess work for the third conjunct as well.

Third, because each of the 50 companies listed in the

Maclean’s article (Jantzi-Sustainalytic analysts 2010) has 2

or 3 bullets highlighting some activity, policy, or program

that is supposed to indicate some kind of good CSR per-

formance, I thought I might be able to sort the total 139

bullets into some useful categories. We are not told how

these activities, policies, or programs are connected to any

of the ‘‘60 to 100’’ particular indicators or even if these

activities, policies, or programs are counted as indicators in

themselves. But they are apparently supposed to illustrate

good CSR performance, e.g., General Mills Inc. ‘‘Stimu-

lates sustainable agriculture by developing best-in-class

agricultural practices, using conventional hybrid crop

varieties to gain greater yields, and improving the envi-

ronmental performance of production scale farming prac-

tices’’ and Xerox Corp. ‘‘Engaged in a 3-year partnership

with the Nature Conservancy, focused on sustainable forest

management in Brazil, Canada, Indonesia, and the U.S..’’

After several hours over several days, it became clear to me

that, from one sitting to another, I was replacing bullets

from one category to others inconsistently. What looked

like a good guess at one time as an item for one category, at

another time looked like a good guess as an item for some

other category. Fourth, many of the bullets simply descri-

bed the particular products produced by the various com-

panies. For example, BMW ‘‘introduced the ActiveHybrid

X6 and the ActiveHybrid 7, which consume 20 per cent

less fuel than conventionally powered models’’ and Stantec

Inc. ‘‘Develops building designs with energy and resource

efficiencies that exceed the standards of those outlined in

the Model National Energy Code of Canada….’’ If BMW and Stantec were only interested in making material profits,

they might very well produce and sell such products and

make such profits, i.e., these companies would be good

examples of successful pure capitalist agents (Case 5).

They might as well be good examples of successful CSR

agents (Case 1). Fifth, and finally, it occurred to me that

practically any company might be operating as a Case 1 or

Case 5 agent, and there would be no way of knowing

which, with a reasonable amount of confidence. Quite apart

from the companies in the Report considered here, this

comment applies to every company, anywhere, at any time,

including the several companies that have published the

Journal of Business Ethics for nearly 28 years. The vast

majority of successful companies apparently do produce

goods and services that people need and/or want, every-

thing from automobiles to zippers. Granting that companies

also spend a lot of money crafting advertising campaigns to

artificially create needs and/or wants where none naturally

existed (Michalos 1980), it would be silly to imagine that

all the goods and services sustaining more or less suc-

cessful capitalist economies are useless devices designed

Asserting the Business Case for Business Ethics 605

123

by single minded (motivated) pure capitalists. People like

HosertoHoosier have a limited but not nonsensical view of

good business.

Reflecting on the combination of all these issues, I reached

the conclusion that I could not produce the detailed sort of

audit that I thought would be possible after the first couple of

readings of the Maclean’s articles. I was prepared to produce

an audit that could only be regarded as ‘‘vulgar’’ in Machia-

velli’s terms (i.e., dealing only with appearances), and I

thought that such an audit might be better or worse than

nothing. It would have been better if the vulgarity of my efforts

provoked others to do better by creating better measures of

CSR performance and using them in more transparent ways

than Maclean’s and Jantzi-Sustainalytics. It would have been

worse if the vulgarity of my efforts provoked others to seek

their own profitable niches in the field of CSR assessment with

no better results than Maclean’s and Jantzi-Sustainalytics or,

worse still, if my efforts merely helped others ‘‘provide cover

for irresponsible activities by corporations’’ as Conacher

suggested or simple special pleading in the interests of

increasing profits. In the end, I thought and still think my first

impression was mistaken. Even a vulgar audit could not be

produced given the information at my disposal. The most I

could hope for would be a kind of rough vindication of my

assessment of the value of the Maclean’s/Jantzi-Sustainalyt-

ics Report and through it, a vindication of the ABC thesis. As

vulgar as the report is, I think its success supports my claim

that the ABC thesis is true.

Conclusion

The upshot of this article of mine is that while there are

almost certainly personal and corporate material payoffs to

be made from asserting the business case for business eth-

ics, such payoffs can at best be only ‘‘handmaids of [moral]

virtue’’ in business and at worst, serious threats to indi-

viduals’ understanding of and action consistent with moral

virtue, as well as threats to the very institution of morality.

Whatever business case there is for business ethics itself or

for the assertion of the business case for business ethics,

such business cases are not moral arguments and are no

more morally praiseworthy than the business cases for

selling any other product from automobiles to zippers.

On September 3, 2010, I sent the following message to

Maclean’s and Jantzi-Sustainalytics; so far no reply has

been received.

I much appreciated the pieces of the June 21 on the

top 50 CSR performers. I will be presenting the

enclosed article in Macau in a couple of months and

would appreciate knowing if I have correctly pre-

sented Maclean’s and Jantz-Sustainalytics material.

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