Corporate Responsibility?

As Milton Friedman famously noted, the main responsibility of the corporation is to make profits for the shareholder. If your company isn’t profitable, not much else matters – it won’t be around long.

That said, looking at the Fortune list on CNN, at least most of these are actually viable concerns in the long term. Looking behind the covers, however, we find that the “most admired” criteria are:

Innovation
People Management
Use of Corporate Assets
Social Responsibility
Quality of Management
Financial Soundness
Long Term Investment
Quality of Products / Services

In that order. Yikes. How to begin? Many of these are intertwined – if Mgmt is Dilbert-esqe, you’ll have a tough time on finances, long term investment, quality, innovation, etc.

Actually, the only item completely out of place here is the PC one – Social Responsibility. If your company excels in the other 7, you won’t have to lose sleep worrying about your job. If all your company can boast is ‘social responsibility’, better tune that resume, ‘cause you be goin’ down.

Given our environment, the only noted plus associated with ‘social responsibility’ is buying the firm some positive PR, not an insignificant concern. Maybe only the absence of negative PR.

Update: (March 3): Isaac Post, writing for NRO, hits many of the same themes, but more thoroughly. At least I beat him to press.