A finance professor, a business journalist, and two corporate executives debated whether corporations have a social responsibility to the public before more than 150 people in Cook Auditorium last night.
"There is more to business than the petty jealousies, unbridled egos and ambition," said Richard Shreve, a professor at Amos Tuck School of Business Administration and moderator of the discussion.
Sharon Cohen, Reebock's vice president of public affairs, said she believes it is corporate America's responsibility to look beyond profits and consider human rights.
"At Reebok we're showing the world that going into business doesn't mean you have to check your values in at the door at 8 am and pick them up on the way out at 6," Cohen said. Reebock manufactures athletic shoes and clothing.
Cohen said Reebok is trying to improve its social awareness by donating money to programs like Witness, which provides free video equipment to Amnesty International for documenting human rights violations.
But Kenneth French, a visiting professor at the Tuck School and finance professor at the University of Chicago, argued that business managers who donate to social causes altruistically are breaking their fiduciary duty to shareholders to maximize profits.
He referred to Milton Friedman's philosophy that "the social responsibility of business is to make larger profits." Friedman is a Nobel Prize-winning economist.
"Corporations can give if it will help profits," French said. "But giving out of generosity is in effect stealing from the stockholders."
Jeffrey Swartz, chief operating officer and a director of Timberland, a national outerwear company, said social spending is in the best interest of businesses because consumers are becoming more socially aware.
"At Timberland, we believe doing well and doing good are inextricably linked," he said.
Swartz said Timberland decides where to operate factories based on countries' human rights policies and environmental records.
Kathleen Hays, New York bureau chief and senior economics correspondent for the financial publication Investor's Business Daily, said she agrees that profits and social responsibility are not necessarily mutually exclusive.
