Business Ethics and Corporate Sustainability: Studies in Transatlantic Business Ethics – By Antonio Tencati and Francesco Perrini

• Published date: 01 November 2012
• Author: Nell Minow
• DOI: http://doi.org/10.1111/j.1467-8683.2012.00912.x
• Date: 01 November 2012

Book Review

Antonio Tencati and Francesco Perrini, Business Ethics and Corporate Sustainability: Studies in

Transatlantic Business Ethics, Edward Elgar, Cheltenham, 2011, 264 pp, ISBN 1849803714

The problem is starkly stated and the solutions are

urgently pressed. “The legitimacy of all f‌irms is at

stake,” leads off the introduction to a series of essays about

how we can better address structures that seem designed to

divert and pervert the “invisible hand” of the market over-

sight function described by Adam Smith. Editors Antonio

Tencati and Francesco Perrini call the current mainstream

business model a “systems crisis” that is “self-defeating,

ethically questionable, and, after all, unsustainable” (p. xxv).

By def‌ining the standard of measurement as “sustainabil-

ity,” the editors and authors take an important step forward

in recognizing the centrality of ethics and social responsibil-

ity as a core element of long-term value creation. “Sustain-

ability” is another term for what we often call “the long

term” and I would suggest it is a better one. “Long term”

can be a conveniently dismissive way to “kick the can down

the road” or, to use a popular Wall Street acronym, IBGYBG

(“I’ll be gone; you’ll be gone”). But the word “sustainability”

requires us to evaluate each decision today in terms of what

it will mean 10 and 20 years from now.

However, as the use of the term “and” in the title indicates,

they stop just short of the holistic understanding of ethics as

sustainability and as an essential component of the market.

The book calls on those in the business, investor, and non-

governmental organization (NGO) communities to “go

beyond the market and its f‌inancialdimension” but, in reality,

sustainability analysis requires a quantitative, market-based

assessment of what philosophers call ethics but lawyers call

conf‌licts of interest and economists call agency costs and

externalities. Implicitly, this theme runs through many of the

book’s most compelling chapters, and the book would have

been stronger if it had been made more explicit.

For example, the section on “The Role of Business in

Society” opens with a f‌ine essay by Laszlo Zsolnai on “Cor-

porate Legitimacy,” quoting Kenneth Boulding’s assertion

that “business is a peaceful alternative to war.” But, Zsolnai

says, “today business seems to be at war with society and

nature. Striving for prof‌it and competitiveness, mainstream

businesses produce monetary results at the expense of

nature, society, and future generations.” I would amend that

to say “short-term monetaryresults for executives and short-

term shareholders by externalizing their costs onto the com-

munity and future employees and investors.”

Similarly, Johan Wempe’s essay, “From Task to Role

Responsibility: Towards a Prospective Business Ethics,”

undercuts its argument in favor of corporate-level responsi-

bility with the use of the responsibility-diffusing passive

voice (“customers were already experiencing damage due to

the extreme interest rates they were having to pay,” “the

exorbitant interest payments that several f‌inancial institu-

tions were now charging”). The idea of a SouthAfrican-style

“Truth Commission” approach to understanding and

healing the consequences of corporate misbehavior with the

creation of a “Mortgage Suffering Foundation”is intriguing.

But it is disappointing that in Wempe’s piece, and indeed

throughout the book, there is almost universal disregard of

the role of the board and the importance of accountability of

individual directors.

One of the book’s strongest chapters is Yvon Pesqueux’s

“Corporate Social Responsibility: The Exhausting of a Man-

agement Topic.” Refreshingly candid and lively, it includes

an insightful comparison of US-style and European-style

corporate social responsibility (CSR), which one could sum-

marize in part as rules-based vs. principles-based and

individual-based vs. consensus-based.Implicit in the discus-

sion is a cost-benef‌it approach (“concrete CSR actions have

made the procedural side of business operations consider-

ably heavier”) and perhaps a bit of optimism about a more

integrated, less structural, more outputs-oriented approach

in the future.

Kevin T. Jackson’s “Moral Virtue, Philanthropy and the

Market” asks the especially provocative question explored

by George Bernard Shaw in “Major Barbara.” Which is Bill

Gates’ greater contribution, $10 billion to research vaccines

and make them available to citizens of impoverished coun-

tries, or creation of Microsoft,which has “benef‌itted human-

ity to the tune of about 1 trillion dollars?”

Typically, that essay and the others are better at asking

questions than answering them. Georges Enderle’s “What

is Long-Term Wealth Creation and Investing?” focuses on

“the courage” required to set long-term goals but could

use some more courage in going beyond a suggestion for

stronger institutional frameworks with some specif‌icity

than recommending that “the US Treasury and the Federal

Reserve and even the governments have to step up to

make sure that the public interest prevails over private

609

Corporate Governance: An International Review, 2012, 20(6): 609–610

© 2012 Blackwell Publishing Ltd

doi:10.1111/j.1467-8683.2012.00912.x