November 2012

Starbucks Community Programme

Do Starbucks, Amazon and Google Have a Wider Duty Than Maximising Shareholder Value?

A debate between Labour MP Margaret Hodge and Professor Jeff Jarvis, journalism professor at the City University of New York, perfectly encapsulates the argument for sustainable business.

Focusing on the media controversy about company tax avoidance, Jarvis argues that such companies have a duty to shareholders to minimise tax liability by whatever legal means are at their disposal.

Hodge counters that this argument is outdated and that we expect businesses to consider the interests of their wider stakeholders and also operate within the boundaries of higher principals such as fairness.

"People will no longer tolerate companies acting purely in their own interest at the expense of the wider public good. Paying tax is now a central part of how companies are judged. Damage your reputation on tax and you lose business and damage your shareholders' interest."

These are challenging times for coporate leaders, expected to balance their legal duties to shareholders with their wider responsibilities to communities.

Putting in place tools and practices to measure and track this larger notion of corporate reputation, is critical to being able to make the right judgement calls on issues such as this.

(Source: The Guardian