Book Review of Bryan Horrigan, Corporate Social Responsibility in the 21st Century (Edward Elgar: Cheltenham 2010)

Who and what is a business for? Is the sole business of business to make business? Or should corporations be responsive to broader societal concerns such as environmental protection, social welfare and public health? Much water has flowed under the bridge since the Nobel laureate Milton Friedman stated that ‘there is one and only one social responsibility of business – . . . to increase its profits so long as it stays within the rules of the game . . .’ Environmental challenges and the current crisis in the financial markets have prompted a paradigm shift and radical rethinking of the role of business in society. Corporate Social Responsibility (hereinafter CSR), interpreted as corporations’responsibility to conduct their business in ways that respect the environment as well as broader society in which they operate, has come to the forefront of legal debate. There is an increasing acceptance of CSR, due also to the fact that deeming wealth maximisation as the only goal of corporations ultimately undermines the corporation and the social fabric itself. In fact, under such line of reasoning there would not be any limits to what a corporation could do to achieve profit maximisation. An excessive emphasis on profit maximisation would obscure the linkage between a given corporation, its operation and the social context in which it operates. While corporations need to meet the expectations of their shareholders, to turn shareholders’ expectations into the sole purpose of the corporation would neglect the possible contribution of business to society. By creating new products, spreading technology, employing people and improving service, business can be an active agent of progress. If left unregulated, however, corporations can be potentially very damaging to society. As Professor Ruggie has correctly pointed out, ‘markets work optimally only if they are embedded within rules, customs and institutions’. Horrigan’s Corporate Social Responsibility in the Twenty-First Century provides answers to the questions posed above arguing that as businesses are a vital component of society, they have both the power and the responsibility to conduct their business in ways that satisfy not only shareholders, but also other stakeholders.