Not long ago, ‘corporate social responsibility’ (CSR) was all the rage. Leading consultants Giles Gibbons and Steve Hilton (now advisor to David Cameron) argued business could change the world, and it would be good for business too. Such rhetoric is increasingly seen as a cynical ruse, however, often dismissed as ‘green wash’, or a cynical means of avoiding unwanted regulation. But if the CSR brand is slightly tarnished, perhaps the Big Society offers a new lease of life to the idea of business as a force for good. David Cameron wants private enterprise to pick up the burden from the state and play a greater role in delivering public services. And while funding CSR programmes is no longer a no-brainer, at the 10th Annual Responsible Business Summit held in London at the start of May, top CEOs declared themselves eager to earn a ‘licence to operate’ by demonstrating their businesses’ social worth. This may be understandable, with the 2010 Edelman Trust Barometer showing trust in British CEOs dropping from 51% to 35%. The public seems increasingly cynical about fat cats and powerful corporations. But how should business contribute to society? Milton Friedman famously argued a corporation’s purpose is solely to maximise returns for its shareholders. Traditional free market advocates explain that businesses make profits by producing useful goods and services, creating jobs in the process. What more do you want?

Today, however, shareholders’ interests are often pitted against those of broader stakeholders. The new buzz-phrases are ‘social accounting’ and ‘the triple bottom line’, with demands that the social and environmental effects of a company’s economic actions are made transparent to consumers, investors such as pension funds, and communities in the areas where the corporation operates, as well as regulators and the media. A cursory glance at the course content of MBA courses - bulging with as many modules on environmental, ethical and social issues as traditional topics like accounting and management - shows young entrepreneurs and tomorrow’s senior managers are routinely taught to ‘think and act beyond the bottom line’. But is the bottom line and profit really at odds with society as implied? Is it naïve to insist corporations’ contribution stands on its own merits? After all, long-term improvements in health, living standards, the arts and higher education depend on wealth creation.

Does business leaders’ eagerness to demonstrate their social worth in new ways reflect a loss of confidence in that core contribution? Perhaps it is easier to turn a profit by manipulating the public perception of brands, and benefitting from government largesse in the form of spurious public-private partnerships, than by investing in innovation and creating jobs in new sectors of the economy. If so, are critics letting corporations off the hook? Do CSR demands help restore trust in business, or create a world of smoke and mirrors? Should corporations take responsibility for forging a Big Society, or should they mind their own business?

Listen to session audio: