A Journey into Moral Free Space
Daniel Malan
University of Stellenbosch Business School
23 March 2011
Pracademia
•  How can any theory of ethics that is rigorous enough to pass
muster with picky philosophers possibly give guidance to
busy, hardheaded business managers? (John Boatright)
Corporate Irresponsibility
•  “Those businessmen (sic) who argue that business has
responsibilities to provide employment, eliminate
discrimination and avoid pollution are preaching pure and
unadulterated socialism” (Milton Friedman)
•  “We cannot and must not expect formal organizations, or their
representatives acting in their official capacities, to be honest,
courageous, considerate, sympathetic, or to have any kind of
moral integrity. Such concepts are not in the vocabulary, so
to speak, of the organizational language game” (John Ladd)
Corporate Responsibility
Understanding
Taking
Regulating
Reporting
Governing /
managing
Integrative Social Contracts Theory
•  Local economic communities have moral free space (freedom
of individuals to form or join communities and to act
jointly to establish moral rules applicable to the
members of the community) in which they may generate
ethical norms for their members through microsocial contracts
•  Norm-generating microsocial contracts must be grounded in
consent, buttressed by the rights of individual members to
exercise voice and right to exit
•  If a norm is generated within moral free space and has the
support of the majority of the community, it is “authentic”
•  In order to become obligatory (legitimate), a microsocial
contract norm must be compatible with hypernorms
Moral Free Space
Hypernorms
10 Principles = Hypernorms
Hypernorms guide CR programme
Moral Free Space: contextual, respect for
local concerns, customs and traditions
ISCT
CEO and Board
statement
Communication
on Progress
Mainstream /
MDGs
UN Global Compact Management Model
ISCT
Commit
Measure,
communicate
Assess, define,
implement
The Regulatory Range
Mandatory or
Voluntary (UNGC,
GRI, ISO 26000
S
M
R
B
)
Human Rights
•  Levi-Strauss in India
–  Employment of children below legal minimum age
–  Compulsory (sponsored) school education
–  Guaranteed full-time job at legal age
•  Holcim in Sudan
–  Member of the International Committee of the Red
Cross Corporate Support Group
–  Clean Water in Sudan Project
–  Licence to operate?
3
H
5
(OLCIM HAS JOINED
THE )#2# #ORPORATE
3UPPORT 'ROUP
AND WILL TARGET
HUMANITARIAN
PROJECTS IN CON¾ICT
AFFECTED COUNTRIES
WHERE WE OPERATE
4
6ISIT WWW
S
HOLCIMCOM
SUSTAINABLE FOR
MORE INFORMATION
E
C
I
S
B
C
(
H
O
Anti-discrimination
•  KPMG in Southern Africa
–  Affirmative action in
South Africa
–  Localisation practice in
Botswana
Limits to Moral Free Space
•  Nestle on the environment
–  Same waste water management standards in all countries
where the company operates, regardless of local legal
requirements
•  Sanlam and anti-corruption
–  “Corruption not only attacks the moral fibre of our society and the integrity of our markets, but it also conflicts
with the core principles on which Sanlam’s business
strategy is based. Our commitment to our ethical values
and our strategic vision demand that we shall not tolerate any form of corruption in our business
dealings.” (Johan van Zyl, Group Chief Executive, Sanlam,
South Africa)
Traditional Approach
ISCT Approach
•
•
•
•
We like the UN brand
Our values are compatible with the 10 principles
Our sustainability report can double up as a COP
•
•
We support the Global Compact because it
provides a moral framework of responsible
corporate citizenship
To prevent the Global Compact from becoming a
list of empty and vague principles, we will
actively investigate moral free space in all the
communities and geographical locations where
we operate around the globe. We will
demonstrate fundamental respect for the 10
principles, but also for local cultures and
traditions, and we will implement the principles in
such a way that it makes a real and positive
difference at the local level
We understand that these activities that we will
engage in have to be both authentic (i.e.
supported by all our material stakeholders) and
legitimate (i.e. in line with the substantive
hypernorms of the Global Compact and other
relevant hypernorms that we might identify)
daniel.malan@usb.ac.za
www.governance.usb.ac.za