The Business Case for Asserting the Business Case
for Business Ethics
Alex C. Michalos
Published online: 26 April 2013
� Springer Science+Business Media Dordrecht 2013
Introduction
The BC and ABC Theses
The business case for business ethics is the thesis that being
morally good is materially good for business. I will call this
the BC thesis. The thesis of my essay is that asserting the
business case for business ethics is materially good for
business. I will call this the ABC thesis.
Some people may recall that in Michalos (1995, p. 57), I
argued that the worst argument for business ethics was the
argument that ‘‘a businessperson ought to be morally good
because there is money in it or, at least, there is more money
in moral goodness than in moral evil.’’ As articulated in that
article, the worst argument was just another formulation of
the business case for business ethics, i.e., for the BC thesis.
Some people might also recall that in Michalos (2008a)
I showed that this bad argument was first identified and
demolished by the philosopher-statesman Marcus Tullio
Cicero in the first century BCE. In case your reading list
has not included either the particular piece by Cicero or
me, his demolition of the BC thesis took the form of
pointing out that if your primary reason or motive for
action is self-interest or profits, then, when there is more to
be gained by morally evil than morally good action, you
will prefer the former, which would be morally wrong in
itself and undermine the institution of morality. In short,
the BC thesis is plainly a morally deficient argument for
business ethics. Incidentally, it is probably worthwhile to
emphasize that given the unsoundness of what I call the
Loyal Agent’s Argument (Michalos 1999; Poff 1999),
whether the bottom line is one’s own or a corporation’s
profits, the BC thesis is morally deficient.
The ABC thesis that I want to defend in this essay,
namely that asserting the business case for business ethics
is materially good for business is a variant of a thesis that
will be familiar to anyone who has read Niccolo Machia-
velli’s The Prince (1980). Here are the crucial passages.
‘‘A prince…ought to take great care that nothing goes
out of his mouth which is not full of the five quali-
ties…all pity, all faith, all integrity, all humanity, and
all religion. Nothing is more necessary than to have
this last quality. For men, universally, judge more by
the eyes than by the hands…Everyone sees what you
seem to be, but few touch what you are…And with
respect to human actions, and especially those of
princes where there is no judge to whom to appeal,
one looks to the end. Let a prince then win and
maintain the state—the means will always be judged
honorable and will be praised by everyone; for the
vulgar are always taken in by the appearance and the
outcome of a thing, and in this world there is no one
but the vulgar’’ (Machiavelli 1980, p. 109).
Recasting Machi ...
The Business Case for Asserting the Business Casefor Busines.docx
1. The Business Case for Asserting the Business Case
for Business Ethics
Alex C. Michalos
Published online: 26 April 2013
� Springer Science+Business Media Dordrecht 2013
Introduction
The BC and ABC Theses
The business case for business ethics is the thesis that being
morally good is materially good for business. I will call this
the BC thesis. The thesis of my essay is that asserting the
business case for business ethics is materially good for
business. I will call this the ABC thesis.
Some people may recall that in Michalos (1995, p. 57), I
argued that the worst argument for business ethics was the
argument that ‘‘a businessperson ought to be morally good
because there is money in it or, at least, there is more money
in moral goodness than in moral evil.’’ As articulated in that
2. article, the worst argument was just another formulation of
the business case for business ethics, i.e., for the BC thesis.
Some people might also recall that in Michalos (2008a)
I showed that this bad argument was first identified and
demolished by the philosopher-statesman Marcus Tullio
Cicero in the first century BCE. In case your reading list
has not included either the particular piece by Cicero or
me, his demolition of the BC thesis took the form of
pointing out that if your primary reason or motive for
action is self-interest or profits, then, when there is more to
be gained by morally evil than morally good action, you
will prefer the former, which would be morally wrong in
itself and undermine the institution of morality. In short,
the BC thesis is plainly a morally deficient argument for
business ethics. Incidentally, it is probably worthwhile to
emphasize that given the unsoundness of what I call the
Loyal Agent’s Argument (Michalos 1999; Poff 1999),
whether the bottom line is one’s own or a corporation’s
3. profits, the BC thesis is morally deficient.
The ABC thesis that I want to defend in this essay,
namely that asserting the business case for business ethics
is materially good for business is a variant of a thesis that
will be familiar to anyone who has read Niccolo Machia-
velli’s The Prince (1980). Here are the crucial passages.
‘‘A prince…ought to take great care that nothing goes
out of his mouth which is not full of the five quali-
ties…all pity, all faith, all integrity, all humanity, and
all religion. Nothing is more necessary than to have
this last quality. For men, universally, judge more by
the eyes than by the hands…Everyone sees what you
seem to be, but few touch what you are…And with
respect to human actions, and especially those of
princes where there is no judge to whom to appeal,
one looks to the end. Let a prince then win and
maintain the state—the means will always be judged
honorable and will be praised by everyone; for the
vulgar are always taken in by the appearance and the
outcome of a thing, and in this world there is no one
4. but the vulgar’’ (Machiavelli 1980, p. 109).
Recasting Machiavelli’s target-student from an aspiring
prince in the early sixteenth century to an aspiring corpo-
rate leader in the early twenty-first century, one might say
that in his view there were two necessary conditions for
success. First, it is necessary to appear morally virtuous
and second, to make a sustainable profit. For Machiavelli,
the way to appear to be morally virtuous was to talk a good
game, i.e., to preach pity, integrity and so on, whatever one
practiced. As someone once said, ‘‘Sincerity is everything.
Professor A. C. Michalos is Professor Emeritus from the
University of
Northern British Columbia.
A. C. Michalos (&)
Brandon, Manitoba R7A 4P9, Canada
e-mail: [email protected]
123
J Bus Ethics (2013) 114:599–606
DOI 10.1007/s10551-013-1706-2
5. If you can fake that, everything else is easy.’’ If you can
also make a profit over some reasonable length of time
while talking a good game then no one would ever question
the reality of your virtue. ‘‘Where there is no judge to
whom to appeal, one looks to the end.’’ For a prince, the
end was ‘‘to maintain the state.’’ For our contemporary
corporate leader, the end is to maintain a sustainable profit.
Machiavelli assumed that his two necessary conditions
were matters of fact, based on historical evidence. In The
Prince and his longer The Discourses on the First Ten
Books of Titus Livius (Machiavelli 1970), this was his
primary mode of defending claims. He would state his
thesis and then present one or more historical examples that
were consistent with it. I don’t know if anyone has ever
done any rigorous empirical testing of his thesis concerning
two necessary conditions for success. It is, of course, easy
to think of additional examples that are consistent and
6. others that are inconsistent with the thesis. It would be
difficult to find persuasive real-life cases of leaders who are
uniformly ‘‘making it by faking it,’’ i.e., cases of leaders
who always or usually deliberately merely pretend to be
morally good agents and who always or usually generate a
sustainable profit however that is defined. People like
Bernie Madoff often end as he did. Since we cannot open
up people’s heads or hearts to observe their deepest
intentions, we can only judge their intentions by their
behavior (verbal and otherwise) and its consequences,
which is unfortunate to say the least.
Validation and Vindication
In the middle of the twentieth century, the positivist phi-
losopher of science, Herbert Feigl, expanded Machiavelli’s
observation that in the absence of a judge, ‘‘one looks to
the end’’ in a somewhat famous article (Feigl 1950). In that
article, among other things, Feigl was grappling with the
so-called problem of induction. Briefly stated, the problem
7. was how to justify inductive inferences, i.e., inferences
from the observed to the unobserved. The justification for
accepting the conclusions of deductively valid arguments
on the basis of their premises was plain for all to see. If the
premises of such arguments are all true and there are no
methodological flaws, then anyone accepting the premises
and rejecting the conclusion would be guilty of self-con-
tradiction. In such cases, the conjunction of the premises
and denial of the argument’s conclusion would be a self-
contradictory or logically false proposition. For inductively
valid arguments no such transparently acceptable justifi-
cation was or is available because by definition (as sug-
gested above) the conclusions of inductive arguments
always go beyond the information contained in their pre-
mises. For example, even if every observed duck has died
sooner or later, the generalization that all ducks die is not
logically guaranteed by the premise because that general-
ization applies to all observed and unobserved ducks and
8. nobody knows or can know how or even if the all unob-
served ducks end their lives. In short, the conjunction of the
premise that all observed ducks have died and the denial of
the generalization that all ducks die (i.e., there is some
duck that does not die) is not self-contradictory.
Feigl argued that in the absence of a rule (i.e., a criterion
by which to judge one’s inferences as well as one’s rules
for warranting inferences), one ought to proceed prag-
matically and justify one’s inferences and rules on the basis
of their consequences. He called our standard rule-fol-
lowing procedure for justifying inferences by showing that
they were patterned after deductively valid argument forms
with all true premises and no methodological flaws vali-
dation. Justifying the rules themselves by the pragmatic
procedure of showing that, in my terms, their acceptance
produces at least as many benefits as costs, all things
considered, he called vindication.
I think that Machiavelli’s observation was accurate and
9. that Feigl’s distinction between validation and vindication
is a useful elaboration of it which has direct application to
ethics in general (a point emphasized by Feigl) and to the
ABC thesis in particular. As you might have expected,
there is a bright and a dark side to the story. The good news
is that very often the justification for moral decisions or
judgments proceeds by validation. For example, there is
wide-spread, general acceptance of the moral maxims
condemning harm to innocent people by things like mur-
der, assault, theft or blatant lies. As well, there are often
fairly clear cases in which such moral rules are deliberately
violated or not, and there are generally accepted procedures
to follow to make appropriately justified decisions regard-
ing guilt or innocence leading to moral blame or praise.
The bad news is that often enough particular cases are
not easily subsumed under generally accepted rules or
different rules might be applied and/or applied in different
ways leading to different decisions. As Aristotle famously
10. observed over 2,300 years ago, different subject matters,
and he referred to political science generally or what we
would call ethics in particular, do not lend themselves to
the same sort of rigor as other matters. Hence, the ‘‘edu-
cated person,’’ he wrote, ‘‘seeks exactness in each area to
the extent that the nature of the subject allows’’ (Aristotle
1999, p. 2). If he had read Feigl, then he might have said
that, where ethical issues are concerned, one should often
expect justification to take the form of vindication.
Well, you might ask, what’s so bad about that? In a
word, plenty. I am, as many people know, a pragmatist.
I confess I was a teenage logical positivist and I suppose
some of the boy remains in the man. In fact, many posi-
tivists were and probably still are pragmatists. Pragmatists
600 A. C. Michalos
123
by definition believe in judging propositions, human
11. actions, events, theories and institutions by their conse-
quences. The one great problem that pragmatists have is
that there is no generally accepted rule book that tells us
which consequences to count and how to count them. That
is why you can find thoughtful, apparently well-intentioned
pragmatists in bed with practically anyone from Adolf
Hitler to Jesus Christ. You can also find ill-intentioned
pragmatists committing the Fallacy of Special Pleading
(Michalos 1970), making their consequentialist cases by
advertising and counting only features favorable to their
cases and neglecting features that are unfavorable. Over
many years I have spent a lot of time and energy thinking
and writing about this great problem, e.g., Michalos (1978,
1985, 1997, 2003). All of my work on measuring the
quality of life has been and is motivated by my desire to
find a generally acceptable, rigorous, quantitative solution
of the pragmatists’ problem of precisely specifying a good
way, if not the very best way, of counting consequences to
12. press into the service of pragmatic justifications or, in
Feigl’s terms, vindications. I suppose that like Moses, I will
not see the promised land, but I hope others will.
Motives and Profits
In my presentation (Michalos 2010) at the Second World
Business Ethics Forum at Hong Kong Baptist University in
2008, I spent some time examining Robert Reich’s (2007)
book and how he seemed to address first, the four logical
possibilities involving the mixed motives of doing some-
thing because it is morally right versus doing something
because it will make a profit, and second, the following
four possibilities involving motives and actual payoffs.
1. Motivated to do the right thing (morally speaking) and
actually make a profit.
2. Motivated to do the right thing and actually not make a
profit.
3. Not motivated to do the right thing and actually make a
profit.
13. 4. Not motivated to do the right thing and actually not
make a profit.
I did not consider the more complicated cases involving
both mixed motives and actual payoffs, i.e., an agent
(person or company) might be
1. Motivated to do the right thing (morally speaking) and
motivated to make a profit and actually make a profit.
(Successful CSR agent)
2. Motivated to do the right thing and motivated to make
a profit and actually not make a profit. (Unsuccessful
CSR agent)
3. Motivated to do the right thing and not motivated to
make a profit and actually make a profit. (Reich’s
supposed unlikely or non-existent CSR agent)
4. Motivated to do the right thing and not motivated to
make a profit and actually not make a profit. (Reich’s
real CSR agent)
5. Not motivated to do the right thing and motivated to
14. make a profit and actually make a profit. (Successful
pure capitalist agent)
6. Not motivated to do the right thing and motivated to
make a profit and actually not make a profit. (Unsuc-
cessful pure capitalist agent)
7. Not motivated to do the right thing and not motivated
to make a profit and actually make a profit. [An agent
(e.g., artist, scholar, athlete) pursuing beauty, truth or
excellent performance for its own sake and receiving
excellent material rewards]
8. Not motivated to do the right thing and not motivated
to make a profit and actually not make a profit. (A pure
hedonist agent?)
It may be noticed that the above eight alternatives just
sketched do not include Machiavelli’s insistence on
appearance versus reality. If you recall your truth-table
exercises from elementary logic, then introducing the
motive of appearing to be motivated in one way or another
15. to our matrix would increase its length from 8 to 32 options
(2
5
). To keep matters as simple as possible, I am not
introducing this motive here.
Faced with the set of eight possibilities, it seems to me
that Reich would insist that a corporate agent is only doing
the right thing morally speaking if he or she is motivated to
do the right thing and not motivated to make a profit and
actually does not make a profit, i.e., Case 4. For Reich,
virtue must be its own and only reward. If a virtuous agent
actually profits materially from his or her morally good
acts, he would not regard the agent as morally praisewor-
thy. Whenever such an agent actually makes a profit, as in
Case 1 or Case 3, Reich would assume that he or she is
only doing what a good capitalist ought to do (i.e., make a
profit regardless of other considerations), is not motivated
by a desire to do the right thing morally speaking and
therefore is not entitled to moral praise. That is, by defi-
16. nition, Reich rules out the kinds of mixed motives (Cases 1
and 3) that might make sense of the very idea of being
ethical in business or operating a business in a socially
responsible way. In place of Cases 1 and 3 Reich insists on
Case 5. Such a priori destruction of the very possibility of
business ethics or CSR seems to me unwarranted and
inconsistent with the widely held view that people rou-
tinely have mixed motives.
I cannot pursue all the interesting historical antecedents
of the view that virtue must be its own and only reward.
Asserting the Business Case for Business Ethics 601
123
I suspect the view would have been attractive to some of
the ancient Stoics (Annas 1993) and probably to Immanuel
Kant (Michalos 2001). In The Prince, Machiavelli argued
that given the choice between the virtue of being generous
and the vice of being miserly, a prince ought to prefer the
17. latter because the former would be unsustainable without
excessive taxation which would finally lead to his being
hated and overthrown. On the other hand, one might argue
for anonymous generosity on the grounds that it removes
the possibility of the actor being intentionally rewarded for
his or her acts of generosity. Psychological hedonists claim
that people naturally pursue pleasure and ethical hedonists
claim that people, morally speaking, ought to pursue
pleasure (Brandt 1967). In both cases, the ultimate payoff
of human action, including virtuous action, is pleasure.
While pleasure is not a material reward, it is a reward
beyond the act of doing the right thing because it is the
right thing to do. Plato and Aristotle both took pleasure
very seriously as an important by-product of virtuous
action. Summarizing their views, I wrote,
Although Plato clearly rejected the idea that the good
life was identical to a life of pleasure, he believed that
pleasure had a useful role to play in a good life, and
18. he recognized at least five theories of pleasure’s
origin,…a desire satisfaction theory, a needs satis-
faction theory, a harmony theory, a true pleasures
theory, and a class theory of pleasure…Plato’s
greatest student, Aristotle, believed that EUDAI-
MONIA, happiness, ‘‘living well and doing well’’ is
achieved insofar as one deliberately engages in the
unimpeded excellent exercise of one’s capacities for
the sake of doing what is fine, excellent, or noble,
provided that the deliberation and activities are
undertaken from a virtuous character and accompa-
nied by an appropriate amount of external goods and
pleasure (Michalos 2012).
In the Republic and other treatises, Plato referred to
goods like ‘‘good reputation’’ and pleasure as ‘‘handmaids
to [moral] virtue,’’ never as proper and sufficient reasons
for virtuous action (Michalos 2012). In any event, as this
cursory review suggests, the idea that virtue must be its
own and only reward is questionable and has been rejected
19. outright by some excellent philosophers.
Corporate Social Responsibility Report 2010
I have taken a lot of time to warn you that in my defense of
the ABC thesis, you should not expect more and you will
not get more than a rough vindication. I stumbled over the
ABC thesis while reading some articles in Canada’s most
widely circulated, popular, weekly magazine called
Maclean’s Magazine. There were four articles in the June
21, 2010 issue with provocative titles, ‘‘Corporate Social
Responsibility Report 2010: Good For Business’’ (Ma-
clean’s 2010), ‘‘Ethics: A Conscience Choice’’ (Gohier
2010), ‘‘Crisis Management: When Things Get Messy’’
(Kirby 2010), and ‘‘The Top 50: Raising The Bar’’ (Jantzi-
Sustainalytic analysts 2010).
The short lead article introduced the whole set of articles
with the assertion that ‘‘for the second year in a row,
Maclean’s has partnered with Jantzi-Sustainalytics, a glo-
bal leader in sustainability analysis, to present the country’s
20. Top 50 Socially Responsible Corporations’’ (Maclean’s
2010, p. 37). The fact that two for-profit organizations had
‘‘partnered’’ in producing and marketing a report on the
‘‘Top 50 Socially Responsible Corporations’’ for profit
struck me immediately as clear supporting evidence for the
ABC thesis. Of course, I do not know if the report actually
made a positive contribution to Maclean’s and Jantzi-
Sustainalytics’s financial bottom line, but since it is the
second report, it seems likely that it did. If so, that report
would satisfy one of Machiavelli’s necessary conditions for
success. I also have no way of knowing if those responsible
for the whole project (assessments and publication) were
motivated by a desire to appear to be motivated by a desire
to do the right thing (i.e., reward moral virtue) or if they
were genuinely motivated by a desire to do the right thing
or both. The titles and the content of the articles certainly
give the appearance of coming from a motivation to do the
right thing. Hence, Machiavelli’s other necessary condition
21. for success was also satisfied. Thus, the ‘‘Corporate Social
Responsibility Report 2010’’ seems to provide a clear win–
win–win scenario for Maclean’s, Jantzi-Sustainalytics, and
Machiavelli, not to mention the 50 award winners
themselves.
Maclean’s and Jantzi-Sustainalytics’ understanding of
CSR is not very clear. It seems to be essentially connected
to their idea of sustainability, which is also never spelled
out, but seems to be very close to what most people would
regard as efficiency. Sustainable practices or policies are
often practices or policies that do or probably will produce
greater benefits with the same or fewer costs, e.g., the Bank
of Montreal’s plan ‘‘to be carbon neutral by the end of
2010’’ should produce an increased environmental benefit
that ‘‘dovetailed nicely with cost-cutting’’ in dollars (Go-
hier 2010, p. 38). The idea of efficiency is very attractive to
pragmatists and moral consequentialists, but its strengths
and weaknesses are practically the same as those con-
22. cerning the counting of consequences. Efficiency measures
are fundamentally ratios of benefits to costs, or outputs to
inputs, and what they tell us depends, among other things,
on what one counts as benefits or costs, outputs or inputs
(Michalos 2008b). In Michalos (1978), I explained how
workable accounts of rationality and morality could be
602 A. C. Michalos
123
provided in terms of a robust account of efficiency, but few
if anyone found my explanations compelling. Nevertheless,
my main point here is that in principle there is nothing
wrong with thinking about sustainability as efficiency. It all
depends on what one loads into one’s notion of efficiency,
and it is worth noting that so far as many business people
are concerned, such relatively non-material things as
‘‘reputational benefits’’ are acceptable candidates for
inclusion in efficiency calculations (Gohier 2010, pp. 38
23. and 40).
Jantzi-Sustainalytics’ methodology for evaluating cor-
porations for their CSR performance is no clearer than their
account of sustainability. The long quotation below pro-
vides the essentials as reported in Maclean’s.
The Top 50 Socially Responsible Corporations in
Canada were selected on the basis of their perfor-
mance across a broad range of environmental, social,
and governance (ESG) indicators…The selected
companies rank at the top of their respective peer
groups in Jantzi-Sustainalytics Global Platform.
These companies have demonstrated strong perfor-
mance in areas such as environmental initiatives,
impact on local communities, treatment of employees
and supply-chain management. Some are notable for
their development of products or services that con-
tribute directly to sustainability.
Each of the companies featured is either Canadian-
listed or a wholly owned subsidiary of a foreign-listed
24. company with significant operations or brand pres-
ence in Canada…
Given that Canadian subsidiaries of foreign compa-
nies are inextricably linked to their parent companies,
the evaluation is based on the performance of the
foreign corporate entities. Jantzi-Sustainalytics’
research process includes a thorough examination of
company documents, media sources, online dat-
abases, government sources and NGO research, as
well as direct communication with key stakeholders.
Analysts use a Best-of-Sector
TM
methodology to
compare companies within a given peer group to
industry best practices…(Jantzi-Sustainalytic ana-
lysts, 2010, p. 54).
It is worth noting that if Canadian subsidiaries can be
evaluated on the basis of ‘‘the performance of the foreign
corporate entities,’’ then the evaluation game has some
25. attractive fixed costs as one takes the game from Canada to
the USA, to Europe, and anywhere else where transnational
corporations operate in a network of commercial and/or
political jurisdictions. Analyses done for transnationals like
Adidas Group, Honda, L’Oreal, and Sony Corp., for
example, can be used in many different contexts, attracting
benefits over and over from a single investment.
Following the suggestion at the bottom of the text just
quoted, I visited www.sustainalytics.com for ‘‘more infor-
mation on the rating criteria,’’ and on June 20, 2010, I sent
the following message to the company.
Can you send me a copy of the procedures and cri-
teria used to get the Corporate Social Responsibility
Report 2010 that was featured in June 21 articles, or
the report itself if possible?
On June 22, I received the following reply.
Jantzi-Sustainalytics provided the research for the
Maclean’s list, which you can view on their website.
26. There is also a section on the site which outlines the
research methodology which you can view by click-
ing the link below.
http://www2.macleans.ca/2010/06/14/jantzi-macleans-
csr-report-2010/
If you have any further questions, please feel free to
contact me.
I went to the Maclean’s website, did not find what I
needed, but did find these interesting comments.
Our second annual survey of companies in Canada
that prove it pays to have a conscience…The under-
lying goal is the same: make the world a better place.
As well as the Top 50 list…we look into how CSR
might help with major PR problems, like BP’s oil
spill, and whether the recession made the business
world any less socially responsible.’’
A few minutes later I wrote back to Jantzi-Sustainalytics.
Hi…Thanks very much for the additional informa-
tion. When I went to the website to find the meth-
odology and criteria, all I got was the entry to all
27. Jantzi products. I could not find a button to press that
would give me the methodology and criteria. Can you
please direct me right to that spot. The company
website is huge.
Having had no response, the next day (June 23) I wrote
again.
Hi again…Were you able to find directions to the
methodology and criteria for me?
A few minutes later the following reply came.
Unfortunately, the link at the bottom of the Maclean’s
page was misleading. There is no additional infor-
mation on the Sustainalytics website pertaining to the
criteria and rating for the 50 Most Socially Respon-
sible Corporations list. The methodology used for the
Maclean’s list is based off of Sustainalytics’ regular
research methodology and was modified for this
Asserting the Business Case for Business Ethics 603
123
28. http://www.sustainalytics.com
http://www2.macleans.ca/2010/06/14/jantzi-macleans-csr-
report-2010/
http://www2.macleans.ca/2010/06/14/jantzi-macleans-csr-
report-2010/
project. The link below provides some information
about our regular research process.
http://www.sustainalytics.com/sustainalytics-global-
platform
I’m sorry I couldn’t be of more help. Please feel free
to contact me if you have any further questions.
At http://www.sustainalytics.com/indexes, among other
things, I found this.
In January 2000, Jantzi Research launched the Jantzi
Social Index
R
, partnered with Dow Jones Indexes.
The JSI, a socially screened, market capitalization-
weighted common stock index modeled on the S&P/
TSX 60 consists of 60 Canadian companies that pass
29. a set of broadly based environmental, social, and
governance rating criteria. The JSI has begun to
generate the first definitive data on the effects of
social screening on financial performance in Canada.
From the second sentence in the preceding paragraph, it
appears as if there are 60 companies in the dataset from
which 50 made their way to the Top CSR performers. If
that is indeed the case, then 50/60 = 83 % of the CSR
competitors rose to the top of their ‘‘peer group.’’ That
would suggest that the bar for achieving distinction as a top
CSR performer was very low, too low in fact to warrant
any sort of praise, moral or otherwise, for those compa-
nies. Hopefully, someone at Maclean’s or Jantzi-Sustain-
alytics will be able to tell us exactly how many CSR
competitors were in the dataset from which the top 50 were
chosen.
At the same website, we are given some questions used by
the analysts in their selection of ‘‘rating criteria’’ for the JSI.
30. They included such things as ‘‘Is each rating criterion
researchable?…measurable?…Is there a business, corporate
social responsibility, and/or scientific foundation for each
rating criterion?’’ No specific indicators are given, although
we are told that there are some ‘‘exclusionary indicators’’
such as ‘‘the production of nuclear power, the manufacture of
tobacco products, weapons-related contracting.’’
At http://www.sustainalytics.com/sustainalytics-global-
platform, among other things, I found this.
The Jantzi-Sustainalytics Global Platform is the
foundation of the research we offer to asset owners,
plan sponsors, investment managers and other
stakeholders…Jantzi-Sustainalytics provides clients
with comprehensive analysis on corporate ESG per-
formance…The Jantzi-Sustainalytics model incorpo-
rates between 60 and 100 indicators, weighted
according to the industry in which they are operating.
These include a broad range of core and industry-
specific indicators that address sustainability policies,
management systems and performance outcomes.
31. In sum, this is all the information I could find about the
procedures and criteria used to get the Corporate Social
Responsibility Report 2010, according to Maclean’s and
Jantzi-Sustainalytics websites.
Auditing the CSR Report
At http://www2.macleans.ca/2010/06/14/social-responsible-
corp-2010/, there are a number of comments posted on the
web concerning the Maclean’s articles. Here is a sample.
Jana de Lottinville: ‘‘…For corporations, social
responsibility is no longer an ancillary activity but an
integral part of their business models. It’s ‘doing well
by doing good’’ and more companies are committed
to this both because it’s the right thing to do and
because it’s good for business.
Hosertohoosier: ‘‘Corporations do good by making
profits, paying taxes, obeying the law, creating jobs, and
conducting research. The impact of a few do-gooder
deeds pales in comparison to the social benefits of things
32. like the invention of the PC, television or the automobile.’’
Pdpd: ‘‘…we can recycle good-old ‘yay-CSR/boo-
profit’’ or Friedmanite ‘boo-CSR; it’s bad for the
economy’ arguments, but at the end of the day whether
CSR is good or bad for a given situation (or company) is
probably entirely contextual…there is no solid data on
profitability. Companies that invest heavily in CSR tend
to perform similarly to peers in that respect…Firms
‘doing’ CSR is almost always a clear ‘net social benefit’
at the local level, and should be applauded as such.
But it is entirely possible that CSR can act as a cynical
PR campaign tool to frustrate more formal regula-
tion. So that’s what I meant by the importance of
context.’’
Duff Conacher: ‘‘The title of the report is misleading
because the information and factors used to rank
some of the companies is dangerously incomplete
(especially for 10 or so financial services companies
listed)…Anyone who digs into the details will soon
realize that the information and factors used to
33. measure the companies does not, in many cases,
measure the impact of the companies’ fundamental
activities. For example, no one knows the details of
the more than $1 trillion in outstanding loans and
investments and insurance policies held by the 5 big
Canadian banks, 3 other banks and 2 insurance
companies that are included in the top 50 list, nor any
details about their customer service record, because
these financial institutions are not required by law to
disclose any details (as the federal government con-
tinues to protect them from actual accountability by
604 A. C. Michalos
123
http://www.sustainalytics.com/sustainalytics-global-platform
http://www.sustainalytics.com/sustainalytics-global-platform
http://www.sustainalytics.com/indexes
http://www.sustainalytics.com/sustainalytics-global-platform
http://www.sustainalytics.com/sustainalytics-global-platform
http://www2.macleans.ca/2010/06/14/social-responsible-corp-
2010/
http://www2.macleans.ca/2010/06/14/social-responsible-corp-
2010/
34. refusing to pass a law requiring disclosure.) A law
requiring at least some disclosure of this information
has existed in the U.S. for more than 20 years…As
long as the people and organizations who produce
these so-called corporate responsibility reports with-
out having the key information they need to actually
measure the level of responsibility of the companies,
the reports will continue to provide cover for irre-
sponsible activities by corporations.’’
These comments suggest that different people have
different ideas about exactly what should be counted as
CSR activities and the value of praising or blaming com-
panies for their performance of such activities. There is not
a great deal of agreement on the meaning of basic concepts
connected to CSR, on appropriate assessment criteria, data
availability, measurement, aggregation, and auditing pro-
cedures. In short, the field is ripe for exploitation, and no
one should be surprised if companies like Maclean’s and
35. Jantzi-Sustainalytics find a profitable niche in the field.
Having explored and explained some of the philosoph-
ical foundations of the ABC thesis and some of the prac-
tical problems I and others encountered in trying to assess
the methodological foundations of the Maclean’s/Jantzi-
Sustainalytics Corporate Social Responsibility Report
2010, I set out to provide a kind of auditing overview of the
top 50 CSR performers based on a subset of the eight
alternative kinds of agent motives and payoffs sketched
earlier, and the information provided by the Maclean’s
articles on the top 50 performers. Since I did not have
access to any of the ‘‘60 to 100 indicators,’’ their ‘‘weights’’
or the aggregation procedures used to distinguish the top 50
companies from some others, I knew that I could not
produce any sort of detailed audit of the adjudication
process leading to the Report. All I could do was work with
the Maclean’s articles and the extra material found on the
websites to try to get some sense of how the various
36. companies performed according to our eight alternatives.
This proved to be an unproductive exploration for several
reasons.
First, since I did not have access to the inner workings of
the minds of those who produced and/or implemented the
policies and programs leading to their companies’ inclu-
sion in the top 50 CSR performers, I was left with
appearances as my working data for the first two conjuncts
of each of the eight alternatives, i.e., I was left guessing
real motives on the basis of activities that appeared as if
they were motivated by the aims of doing the right thing
and making a profit. Second, while in principle one might
know exactly the financial payoffs connected to the various
policies, activities and/or products described in the articles,
in fact I did not have access to those payoffs. Hence, again,
I was engaged in guess work for the third conjunct as well.
Third, because each of the 50 companies listed in the
Maclean’s article (Jantzi-Sustainalytic analysts 2010) has 2
37. or 3 bullets highlighting some activity, policy, or program
that is supposed to indicate some kind of good CSR per-
formance, I thought I might be able to sort the total 139
bullets into some useful categories. We are not told how
these activities, policies, or programs are connected to any
of the ‘‘60 to 100’’ particular indicators or even if these
activities, policies, or programs are counted as indicators in
themselves. But they are apparently supposed to illustrate
good CSR performance, e.g., General Mills Inc. ‘‘Stimu-
lates sustainable agriculture by developing best-in-class
agricultural practices, using conventional hybrid crop
varieties to gain greater yields, and improving the envi-
ronmental performance of production scale farming prac-
tices’’ and Xerox Corp. ‘‘Engaged in a 3-year partnership
with the Nature Conservancy, focused on sustainable forest
management in Brazil, Canada, Indonesia, and the U.S..’’
After several hours over several days, it became clear to me
that, from one sitting to another, I was replacing bullets
38. from one category to others inconsistently. What looked
like a good guess at one time as an item for one category, at
another time looked like a good guess as an item for some
other category. Fourth, many of the bullets simply descri-
bed the particular products produced by the various com-
panies. For example, BMW ‘‘introduced the ActiveHybrid
X6 and the ActiveHybrid 7, which consume 20 per cent
less fuel than conventionally powered models’’ and Stantec
Inc. ‘‘Develops building designs with energy and resource
efficiencies that exceed the standards of those outlined in
the Model National Energy Code of Canada….’’ If BMW
and Stantec were only interested in making material profits,
they might very well produce and sell such products and
make such profits, i.e., these companies would be good
examples of successful pure capitalist agents (Case 5).
They might as well be good examples of successful CSR
agents (Case 1). Fifth, and finally, it occurred to me that
practically any company might be operating as a Case 1 or
Case 5 agent, and there would be no way of knowing
39. which, with a reasonable amount of confidence. Quite apart
from the companies in the Report considered here, this
comment applies to every company, anywhere, at any time,
including the several companies that have published the
Journal of Business Ethics for nearly 28 years. The vast
majority of successful companies apparently do produce
goods and services that people need and/or want, every-
thing from automobiles to zippers. Granting that companies
also spend a lot of money crafting advertising campaigns to
artificially create needs and/or wants where none naturally
existed (Michalos 1980), it would be silly to imagine that
all the goods and services sustaining more or less suc-
cessful capitalist economies are useless devices designed
Asserting the Business Case for Business Ethics 605
123
by single minded (motivated) pure capitalists. People like
HosertoHoosier have a limited but not nonsensical view of
40. good business.
Reflecting on the combination of all these issues, I reached
the conclusion that I could not produce the detailed sort of
audit that I thought would be possible after the first couple of
readings of the Maclean’s articles. I was prepared to produce
an audit that could only be regarded as ‘‘vulgar’’ in Machia-
velli’s terms (i.e., dealing only with appearances), and I
thought that such an audit might be better or worse than
nothing. It would have been better if the vulgarity of my efforts
provoked others to do better by creating better measures of
CSR performance and using them in more transparent ways
than Maclean’s and Jantzi-Sustainalytics. It would have been
worse if the vulgarity of my efforts provoked others to seek
their own profitable niches in the field of CSR assessment with
no better results than Maclean’s and Jantzi-Sustainalytics or,
worse still, if my efforts merely helped others ‘‘provide cover
for irresponsible activities by corporations’’ as Conacher
suggested or simple special pleading in the interests of
41. increasing profits. In the end, I thought and still think my first
impression was mistaken. Even a vulgar audit could not be
produced given the information at my disposal. The most I
could hope for would be a kind of rough vindication of my
assessment of the value of the Maclean’s/Jantzi-Sustainalyt-
ics Report and through it, a vindication of the ABC thesis. As
vulgar as the report is, I think its success supports my claim
that the ABC thesis is true.
Conclusion
The upshot of this article of mine is that while there are
almost certainly personal and corporate material payoffs to
be made from asserting the business case for business eth-
ics, such payoffs can at best be only ‘‘handmaids of [moral]
virtue’’ in business and at worst, serious threats to indi-
viduals’ understanding of and action consistent with moral
virtue, as well as threats to the very institution of morality.
Whatever business case there is for business ethics itself or
for the assertion of the business case for business ethics,
42. such business cases are not moral arguments and are no
more morally praiseworthy than the business cases for
selling any other product from automobiles to zippers.
On September 3, 2010, I sent the following message to
Maclean’s and Jantzi-Sustainalytics; so far no reply has
been received.
I much appreciated the pieces of the June 21 on the
top 50 CSR performers. I will be presenting the
enclosed article in Macau in a couple of months and
would appreciate knowing if I have correctly pre-
sented Maclean’s and Jantz-Sustainalytics material.
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c.10551_2013_Article_1706.pdfThe Business Case for
Asserting the Business Case for Business EthicsIntroductionThe
BC and ABC ThesesValidation and VindicationMotives and
ProfitsCorporate Social Responsibility Report 2010Auditing the
CSR ReportConclusionReferences