Whilst for much of the lifetime of the listed company, corporations have tended to abide by Milton Friedman’s famous doctrine that their only real responsibility is to their shareholders, there is a sense that the rise of corporate social responsibility has seen a shift in attitudes in recent years.

A recent study from ETH in Zurich explores just how the public feel about the responsibility of the private sector to do more than just make as much money as they can.

The study revolved around the so called Responsible Business Initiative, which aims to encourage Swiss companies to respect human rights and environmental standards when they operate both at home and abroad.  The question is whether the companies should have a legal obligation to abide by the initiative, or whether it remain a voluntary act.

Public opinion

The research attempted to gauge public opinion on the matter by quizzing over 3,000 Swiss citizens, and it transpired that the majority of Swiss people seem to support legislation of the activities of Swiss companies abroad.  For instance, around 2/3 of them supported tighter supervision and regulation of companies as they operated outside of Switzerland.  Indeed, just over half thought that the voluntary steps companies were taking were not enough.

What’s more, some 60% of respondents said they would support attempts to make the Responsible Business Initiative part of the law of the land, with just 18% saying they would reject such a move.

In addition to gauging broad support for the initiative, the researchers also attempted to understand how citizens respond to new information.  They divided participants into groups who were each presented with various arguments.  Some groups were given supportive arguments for the initiative, others opposing arguments, and some a mixture of the two.

It transpired that when companies took strong voluntary measures, citizens had lower levels of support for the Responsible Business Initiative, due presumably to their belief that a legislative approach is not required.

Global responsibility

The debate is interesting, as whilst there is considerable talk about how companies can be more responsible in their actions, few of these discussions involve holding them responsible for activity outside of their home country.  The Swiss initiative is therefore bolder than most others around the world.

The volunteers were then given two clear policy proposals to gauge their opinion, and it appears as though they favored stricter regulation in many cases.  For instance, they preferred companies to have to report their activities publicly rather than to designated authorities.  They also stated approval for companies being fully liable for any damage caused to people or the environment abroad.

Interestingly, most respondents also felt sufficiently strongly that they thought the Swiss should lead, even if other countries don’t make similar requirements of their companies.  The results providing an interesting glimpse into the shifting demands citizens are placing on companies to behave the right way.

“The strong demand for state intervention and approval for the Responsible Business Initiative are indications that the population feels a need for action,” the researchers say. “Unless the private sector scores points with strong voluntary measures in this area and there is no counter proposal, the initiative could achieve a majority based on the current state of public opinion.”