Thursday, December 02, 2004

MSN Money - Forbes: Who are our best corporate citizens?

MSN Money - Forbes: Who are our best corporate citizens?: "It's a debate as old as the corporate institution: Are companies beholden only to their shareholders, or do they have a responsibility to society beyond their bottom line?

In 1970, future Nobel economist Milton Friedman published a now-famous essay asserting that the best corporate citizens were those who maximized their profits within the legal boundaries set by society. If there was good to be done with those profits, shareholders should do it. They could send their dividends to charity.

Friedman's view provokes plenty of dissent in the executive suite.

Many a corporation makes quite a show of serving other 'stakeholders' besides the owners of shares -- employees, communities or environmental causes, for example. In the last of our four-part Beyond the Balance Sheet series, we review one consultant's scorecard on how big corporations act as citizens. KLD Research & Analytics, an investment research firm in Boston, does the ratings to help institutional investors and money managers who want to steer money toward good corporate citizens, on the theory that Friedman is wrong and that such angels can be identified. Banks and insurers
check your credit.
So should you."

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