Friday, December 5, 2008

Corporate Responsibility Key To Future Success

The press release appended below from NZ Post made me fume.

NZ Post CE, Mr Allen said the company had long recognised it is not enough operate merely as a profitable business and is ramping up corporate responsibility and climate change programmes - Please!

There is an increasing socialist idealism that is creeping into business culture that is championing the concept of corporate social responsibility. This deserves to be challenged. Our schools seem to be aiding this fashionable trend of promoting triple bottom line accounting where social and environmental responsibility is promoted above financial bottom line objectives.

It seems that political correctness has taken precedence over core business principals. The first duty of a business is to its shareholders and employees is to make a profit. The old-fashioned, one-dimensional financial bottom line must always take precedence. The failure to do so has its own serious social consequences.

Business is the wealth-creating institution of society. Its prime “social” role is to meet consumers' needs in the most efficient manner, and this is how capitalism has raised living standards to the level we enjoy today.

Speaking as a forced shareholder in NZ Post, I suggest that Mr Allen start focusing on economic sustainability instead of transforming the company into a new age social adjunct.

5 December 2008
Press Release: New Zealand Post

Ethical behaviour and business sustainability through planned corporate responsibility programmes are essential to future business success, New Zealand Post Group Chief Executive John Allen said today.

Commenting on the Ethical Governance category award to New Zealand Post Group at last night’s 2008 Deloitte/Management Top 200 awards, Mr Allen said the company had long recognised it is not enough operate merely as a profitable business.

Last year the company further strengthened its corporate responsibility programme. In addition to providing a direct response to climate change, it has established benchmarks for its broader corporate responsibility practices and is working to enhance transparency and public engagement about the Group’s activities.

“As a State owned enterprise, we are required to be as profitable and efficient as a comparable privately owned business,” said Mr Allen. “We are demonstrably meeting our commercial obligations, with our financial performance in recent years reflecting a planned strategy of growth and diversification – including the establishment of Kiwibank and joint venture courier operations in New Zealand and Australia.

“But operating profitably is not sufficient. We must also be a good employer, and we must exhibit a sense of social responsibility for the communities in which we operate. For New Zealand Post Group, our communities are in every corner of New Zealand.

“Business sustainability for New Zealand Post Group is therefore underpinned by these two important factors: Providing a good rate of return to our shareholders – the Government, and therefore all New Zealanders – and an unqualified commitment to our social obligations through an integrated corporate responsibility programme that frames our community, environment, workplace and marketplace practices.

Mr Allen said last night’s award was a tribute everyone in the New Zealand Post Group – “but we are aware that our work in this area is continually evolving and that there is always room to improve. The challenge for us, and for all companies, is not just to keep pace with changing community expectations, but to anticipate society’s needs and keep ahead of them.”

Mr Allen also congratulated Kiwibank Chief Executive Sam Knowles and the minority-owned associate company, Datacom Limited, for being nominated in, respectively, the Executive of the Year and Company of the Year categories.

“Overall, it is very pleasing to see the leadership, performance and sustainability across the New Zealand Post Group being recognised by the wider business community,” he said.

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