This is a longer version of a speech given at a Social Market Foundation fringe meeting, Brighton Party Conference, 2007

Good morning, and thank you for inviting me to talk.

I know from my own background with a family business – electrical retail shops in London – how many opportunities pass by each week where your actions can make a difference for good or bad to the outside world beyond the simple bottom line impact.

Now – the debates around this are normally as regards what should companies do or not do? What should their concerns be beyond profit? The jargon of the moment is, after all, corporate social responsibility.

I want to look at the issue from a different angle. Because companies are made up of individual people. Those decisions – they aren’t being made by companies, they are being made by individuals in the companies.

The real questions are about how should humans behave – and what responsibilities do they bear to others, whether it is at home, at work, somewhere in between or somewhere completely different?

My starting point is that I don’t believe that those responsibilities suddenly cease when you walk through a doorway and enter your company. You can no more excuse immoral behaviour by saying “but I was only at work” than you can by saying “but I was only following orders”. Individual responsibilities stick with you always.

Indeed – as an aside – I find that people’s attitudes to individuals’ responsibilities to others are a pretty good indicator of their views about companies’ behaviour. Those who believe in mutual responsibility are much more likely to believe in responsible corporate behaviour, whilst those who are only in live for themselves are far more likely to believe firms need only worry about profit.

But back to judging what companies do through the perspective of those decisions really being just the cumulative, aggregated actions of the individuals who work for them.

Let me give you a simple example of what this means. I believe that people have a responsibility to others in their communities to help keep those communities’ physical fabrics in decent shape. At home that means things like keeping the front of your home clean of rubbish. And at work that means not just turning a blind eye to graffiti on company property.

There is a debate to be had about how the costs of cleaning graffiti should be shared – but fundamentally, the reason I believe a company doesn’t have a right to drag down a community by letting its properties slide into graffiti and litter splattered disrepair is the same as for people living at home – and it is because we all have a responsibility to those who live around us.

You may have guessed that – deep down – I believe humans are good. I am an optimist, positive about the opportunities for change to bring about improvements to our world – and eager to bring about such changes.

But I am also realistic. I want to influence millions of people and the spending of billions of pounds – and widespread detailed line-by-line regulation certainly isn’t the way to do that!

So let’s have a bit of hard-nosed reality – and let’s out free market the right wing free-marketers when it comes to corporate social responsibility. You say you’ve got to put profits first? You say you can’t expect firms to make money out of just being nice? Well – let’s put that to the test. Let’s see if you can really survive in the rigours of the marketplace – but a marketplace where you can no longer hide how you behave, how you treat your suppliers or where you source your materials from.

After all – having more information available to the market-place is meant to be a good thing, isn’t it, oh preachers of the free-market?

(Isn’t it remarkably how many of those who profess hostility to regulation and preach the virtues of the free-market suddenly become a bit coy when you point out that the best free-markets are those with the most information – and that includes them coughing up more information about their own business!).

And one way to do this is by having a wider and more rigorous range of labelling schemes. We’ve already seen some major changes in the food market brought about by having credible labelling schemes, particularly covering organic food.

But isn’t it absurd that if I go shopping I can choose between labelled and non-labelled goods that tell me the virtues behind a bag of carrots, but not those behind companies? I easily judge how the field where the carrot was grown was treated – but not about how the human who made the tinned carrot soup was treated.

From the first steps with free range eggs through to comprehensive organic accreditation – labelling schemes have brought out better behaviour by companies without having to rely on government legislation.

Give consumers more information – and let market pressures play their role for good.

And side-step the questions of worries about window dressing PR, or worries about profits versus being good by exposing ethical standards and attaching a cost to bad behaviour.

It won’t just be a direct financial cost as some consumers choose where to use the spending power – it will also be the indirect costs of firms that don’t behave well having their record more publicly exposed – and finding themselves more often at the bad end of media stories, having to work harder to recruit those many talented staff who have a conscience and indeed forcing those making decisions to explicitly face up to the impact of their own behaviour more often.

And that means opening up another front in the game of calling the bluff of the free-marketers – making shareholder democracy really mean something. It’s another of those pillars of capitalism that capitalism’s most strident defenders are often oh so reluctant to really embrace.

When it comes to making companies behave responsibility – and making it make sense for them to behave responsibly – it’s not just the pressure through the market place for their goods and services that can help. It’s also pressure through the – often only nominally – democratic processes of shareholding.

So corporations, generally the larger ones, are falling over themselves at the moment to demonstrate their corporately responsible credentials.

Indeed I have just returned from looking at AIDS projects in Africa – all part of Corporate Responsibility – and they were good. And I am glad that they are taking on such responsibility – but those good works are not the be all and end all of social responsibility. That has to reach into the core of its activities.

And that is why my focus when it comes to corporate social responsibility is not on the corporation, it is on the human. What they do in their waking hours. Whether it is at a company or not.

There are standards we should all expect and strive to meet; and the way to square the circle on questions around profit versus nice behaviour is to really up the market pressure – with labelling and with meaningful shareholder pressure.