Corporate Social Responsibility Is Part Of Leadership Accountability

Corporate Cheating Cannot Be Condoned And Must Be Punished

Many organizations pay public and internal lip service to the concept of Corporate Social Responsibility. And many get away with this for years and years. But if they do wrong, at some point they will get caught and then disaster strikes.

Can cheating be condoned when it is perceived to be in the best interest of employees and shareholders?

The answer is no. Witness the events of the past three years surrounding the Volkswagen emissions cheating saga, and the direct impact on two of its four key constituents.  

First, employees. Volkswagen employs over 580,000 people worldwide. Let’s assume that its diesel engine cars would not have met EPA emission standards in the USA without the company resorting to the cheating it engaged in. That obviously would have resulted in reduced sales, and probably led to a reduced workforce.

Such a mentality treats the concept of “best interest” on a short-term thinking basis. And all it does is postpone the inevitable. Workers who would have been fired if car sales declined are now likely to be laid off as the impact of this scandal cascades.

The same goes for shareholders. Short-term holders of shares in Volkswagen benefitted over the seven years while this cheating was being perpetuated. When this saga first unfolded, the share price of Volkswagen was down 40% within just a few weeks. So while one set of shareholders may have benefitted (temporarily), the entire shareholder base has been negatively and massively impacted for over three years.

One can only hope that this latter group includes all those involved in executing and covering up this duplicitous scandal.

In society, when people do not live up to their collective and individual responsibilities to the community, they are usually jailed, ostracized, or outcast.

In the corporate world, such failure to meet the duties of corporate responsibility and leadership accountability results in massive loss of value, reputation, market share, and, of course, sustainable success. It is also time that the leaders of such organizations also face be jailed, ostracized, and prohibited from leader any other organizations in the future.

This article is excerpted from my book Great Leadership Words of Wisdom, which is available on Amazon in both paperback and Kindle formats and has over 1000 quotes on leadership from global business leaders, statesmen, athletes, coaches, sages, and philosophers.