World Economic Forum - Global Corporate Citizenship
The Self-Interested Role of Global Corporate Citizens
Global Corporate Citizenship is the brainchild of Klaus Schwab, founder and executive chairman of the World Economic Forum. A corporation has traditionally only been beholden to its shareholders in the form of company profits, market share, and growth. However, as certain corporations have grown far beyond their the boundaries of their birth countries, with annual profits exceeding many countries' GDPs, it becomes clear that in order to adequately meet the long-term growth desires of shareholders, global corporate citizens also have an vested interest in the stability, security, and increased prosperity of populations all around the globe. For instance, global philanthropy, involved with bringing populations up to the point where they can take part in the global economy, is actually a sound business decision for global corporate citizens.
Global Corporate Citizenship as New Ethic
Citizens of a nation have to act according to a certain ethic. Namely, they ought not to engage in actions that weaken the nation, and they should endeavor to work to strengthen their nation's standing and position. The reason for this is self-evident - when citizens strengthen the nation, the nation in turn gives back to the citizens. Global citizens seek to do so for the entire world with regards to environmental, economic, political and human rights issues. When we all strengthen the global system, we are all brought up together. The idea of global corporate citizenship operates under the same premise. When a company operates with a globally-sound ethic, it will ultimately profit in the end.
Voluntary Elements of Global Corporate Citizenship
The purpose behind global corporate citizenship as a theory was to convince newly emerging multinational corporations that it was in their best interests to act in the best interests of distressed populations around the world, rather than simply to use them to further their goals in high-consuming countries in the West. It is better to have a whole world of people wealthy enough to become consumers than to only focus on consumers in one market and turn the other segment of the market into subsistence workers. The theory was designed to try to solve the problem of global living standard disparities supported by multinational corporate practices.
This idea means that GCC is not backed up by any corporate law, but is rather a voluntary body of knowledge and definition that companies should logically follow. In many cases, they do, which translates into better living conditions for peoples around the world. However, because it is voluntary, GCC is not a perfect solution to the problem.
Global Corporate Citizens as Stakeholders
When a company makes the leap and becomes a global corporate citizen, according to the World Economic Forum, the business part of the company becomes one of four separate aspects that require attention. A company grows beyond being a mere business entity and need to engage in diplomacy with governments, needs to participate in social engagement with communities and populations, and needs to take part in academic affairs around the world. A global corporate citizen is a fellow stakeholder in the world as a whole, rather than simply a representative of the stakeholders in it.
World Economic Forum - Global Corporate Citizenship
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