Common Sense Comes to Town!

Common sense is the most fairly distributed thing in the world, for each one thinks he is so well-endowed with it that even those who are hardest to satisfy in all other matters are not in the habit of desiring more of it than they already have. (Descartes)

Coporate Public Self-Consciousness

Posted on | May 21, 2011 | No Comments

Now that the end of the world is clearly not going to happen, let’s work on ways through which we could make this world a little bit more enjoyable. Please allow me to return to my favourite topic of these past few days: the link between business, emotion and society.

We’ve already established that businesses were persons handicapped by their lack of emotion. This leads to socially maladapted decisions.  So how can we rectify this situation? By forcing a certain public self-consciousness, for one.  

Businesses actually only have one such confession to make on a yearly (or quarterly) basis, and it is first and foremost an economic one: publishing financial statements at fixed intervals according to clearly defined rules and procedures. This is obviously not enough in the sense that this exam does not account for the non-economic impacts of the activities of the business, nor of the economic impacts felt outside the company.

A second audit is necessary. This one must verify all the company’s activities, its entire value chain (including suppliers, contractors, distributors, and so on) in order to draw a social, environmental, and community involvement balance sheet in a neutral, objective and public way. Various norms already exist throughout the world to address some of these issues. It is time to gather them together within one great annual mandatory examination.  

You may think this is anathema to capitalism, but to the contrary: a properly working market depends on the availability of all information to all persons involved and we are all, through our pension funds, savings and other personal investments, involved in the market. Furthermore, the major accounting cabinets already include experts in sustainable development. By encouraging this practice we will witness the rise of a new kind of professional accountant, independent, operating in a free market and bound to a code of ethics similar to those of chartered accountant.

This is costly of course. I for one would be willing at first to allow companies to deduct 100% of this expense from their income tax payments, at least for the first few years. This will allow a company to deliver information without having a negative impact on its bottom line, yet still improving global market conditions. These decisions concern us all, and therefore it is our common responsibility to act in order to correct this order of things. With time, this expense will probably evolve into an investment; at this point the returns it generates will allow us to remove any fiscal advantage and leave this to federal rules and market forces.

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