9. The Pillars of Coherency

Over 9500 corporations have signed up to the United Nations Global Compact at time of writing (UN Global Compact, n.d.)

‘First’ here is a relative term. No individual pillar ranks above the rest. They are interconnected and share a common structural need to support the creation of coherent value.

That some stakeholders are much more on the receiving end of some impacts, for example, conditions in supply chains in the developing world, is not to suggest that action of such issues will not translate back into warm glow feelings for employees and increased commitment. People are not naturally selfish, and there is growing awareness that issues such as deforestation, rising pollution levels, and falling fish stocks, on the one hand, and inequality, corruption, and exploitation, on the other, are interlinked. Actions to improve any one area ultimately feedback into other areas.

This is not to suggest that a business should paralyze itself in inaction by engaging in never-ending dialogue, but instead make real efforts to evaluate the inputs and costs borne by each stakeholder and enable a coherent distribution of resulting value. For example, Eccles et al. (2014) find that more responsible firms interact more regularly with financial analysts to explain their financial decision-making and performance. Why is such a process not the same regarding environmental stakeholders? Why are AGM’s a standard interaction tool whereby investors can make their opinions known, but not so communities, employees, nature, or suppliers exploited workers? In most cases, a company’s board is legally obliged to meet at least once a year. No such obligations apply toward other stakeholder groups.

These are not commonly referred to as inputs, but as they are part of the costs of producing a product or service, they should be. Genuine responsible behavior should not permit that they are externalized at little cost to the organization, but at great cost to society.

A lot of small and medium sized firms also ‘do CSR’ but in many cases are not aware of it, and/or do not label it as such. Due to their size, characteristics of being-based usually in one community and with strong links to that community, they tend to be naturally quite socially responsible.

The core philosophy of a coherently responsible organization is that economic success does not have to come at the cost of environmental and social success, while the values are based on fair and honest distribution of that economic success. The mission is self-evident—to find ways to put this philosophy and these values into practice.

This is not intended as an exercise in human and organizational psychology, rather a way to present to the reader the general thrust of the five pillars. In addition, this reference should not be interpreted in any way as portraying the pillars in a hierarchical system.

Even in a very democratic organization, official legal power resides with those at the top, and in many cases, they are responsible for making legally binding decisions.