Global Corporate Citizenship

Working With Governments and Civil Society

Klaus Schwab

From Foreign Affairs, January/February 2008

Summary:  Global corporate citizenship means that companies must not only be engaged with stakeholders but be stakeholders themselves alongside governments and civil society. Since companies depend on global development, which in turn relies on stability and increased prosperity, it is in their direct interest to help improve the state of the world.

KLAUS SCHWAB is Executive Chair of the World Economic Forum.

Second, for global corporate citizenship to be meaningful, effective, and sustainable, it must align with a company's specific capabilities and with its business model and profit motive. This also requires the active involvement of CEOs and should reflect their vision of what is good for the corporation and society. If this happens, it is more likely that the enterprise will find ways of engaging that are compatible with its business objectives and beneficial for society as well. Corporations should, however, beware of being parties to grand declarations or general commitments to solve global issues, since such commitments can blur people's perceptions of the distinct roles of the public and private sectors. The legitimacy of a corporation engaged in global corporate citizenship comes not from declarations but from results.

Third, global corporate citizenship should never be undertaken from a defensive or apologetic position. The ultimate role of business in society remains to do business. Global corporate citizenship should not develop from a bad conscience or a feeling that one must give back to society; it should be a feature of this globalizing world that stretches traditional boundaries. Global corporate citizenship is a logical extension of corporations' search for a consistent and sustainable framework for global engagement -- and one that adds value for both the companies and the global space in which they engage. It is a form of corporate engagement that can reinforce the positive role of business in society and enhance profitability in the long term. Indeed, global corporate citizenship integrates both the rights and the responsibilities that corporations have as global citizens. And in relying on a multi-stakeholder approach to tackling global problems, it can point out the way to new models of effective global governance that integrate business as a key stakeholder.