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Opinion: Why your business needs to define its responsibilities


By David Logan, co-founder of Corporate Citizenship

The discussion around corporate citizenship often focuses on the 0.5 per cent of British businesses that are classified as large and multinational – but all private companies, large and small, are ‘corporate citizens’ of society. Like individual citizens, they have rights, responsibilities and aspirations. 

Businesses shape society through their choices, just as individual citizens do, so running a small firm requires business owners and managers to make ethical judgements. In some ways, business decisions are more important because of the scale of the impact they have, globally and locally.

A business’s offering is sustained by hundreds of decisions that have ethical, economic, social and environmental consequences. Some ethical decisions can save businesses money, such as reducing waste to landfill, cutting electricity consumption and providing healthcare to workers to keep them fit for work. Some, such as being open to diversity in employment, are cost-neutral. Others can cost a little, but bring indirect benefits – for example, working with local schools to educate an emerging generation of workers, who could then work for you.

Some decisions may be costly, however, and this is where values play a part. It can be difficult or costly, for example, if a business has to stop trading a certain line, importing from or travelling to a repressive country, or using certain ingredients. However, choosing to make this costly decision can bring reputational benefits: it is a statement of values and lets customers know what the business stands for. 

Good values do sometimes impose costs on a business, but this does not counteract their benefits. Integrity is the key ingredient of reputation and cannot be bought by spending on PR campaigns.

Owners and managers need to be clear about what the business stands for, and to tell employees, customers and consumers what that is. This often means setting the business’s values down in a statement of business principles, and being willing to discuss them when issues arise. 

Small businesses are often at the heart of communities, but people rarely know what they do and why they do it. I encountered this working on community issues for BP corporate in the 1990s. I visited five service stations in Northern Ireland with turnovers of between £2-3 million, to see what they did for the community. All were very active, giving goods from the shop to local charities and events, training schoolchildren in motor maintenance and organising travel to hospital appointments for housebound elderly people.

The owners and managers did what they thought was right – but they didn’t say clearly what they did or keep an accurate record of the cost involved. Small businesses ought to measure this so they can show employees and customers what they do and why.  

Small businesses need to show that they are corporate citizens, not just commercial enterprises – it is a vital part of their identity and reputation, binding employees and customers to the business.

David Logan is co-founder of Corporate Citizenship and author of the book Corporate Citizenship. Views expressed are those of the author and not necessarily those of FSB