At the beginning of the Industrial Revolution, Queen Elizabeth of England began to charter corporations, empowering them to do business as if they were individuals.   This resulted in numerous savings for their owners.   Each new charter included a statement of public responsibility.   The idea was that the Queen granted the favor of incorporation in return for the benefits that the business would provide to the community at large.³⁵

In four hundred years, we have gone from a corporation having a duty to its community to a corporation only having a duty to its shareholders.   The attention to the bottom line in much of the Western world directs a company’s management to consider this quarter and possibly next quarter.   If a company’s actions spell trouble that will not manifest for twenty years, then it is something that should be left until later.  

Very recently we have seen a change in this attitude.   Whether or not their behavior actually changes, companies are at least beginning to say that they have a responsibility to their employees, their customers, and the community in which they exist.

This attitude is spreading slowly, and perhaps will eventually mean that Nestlé’s management can no longer tolerate the unethical promotion of infant formulae.  In the meantime, it is hardly surprising that the expressed moral opinion of Nestlé management is in conflict with that emerging elsewhere in the developed nations.

Former CEO of Nestlé Helmut Maucher wrote a book called Leadership in Action: Tough Minded Strategies from the Global Giant.   In it, he makes the statement that “ethical decisions which injure a company's ability to compete are actually immoral."

In an interview, Maucher’s successor Peter Brabeck-Letmathé was asked to comment on this statement.   His reply points to the basis of Nestlé’s method of marketing infant formula.

"I decided to eliminate the word ethical from Nestlé because it's a word which divides people as opposed to uniting them.  Ethics, if you look into dictionaries, are a set of moral standards within a very specific unit of society, and ethical standards in Britain, Switzerland, Chile and China vary to a large extent.  And because this word is more likely to divide than to unite we don't talk about ethics at Nestlé.  We talk about responsibility.  Our responsibility to our shareholders, our employees, and all other stakeholders.  It's true that we do have a social responsibility that corresponds to a global company as opposed to the group interests of one community or another community." ³⁶

As a member of the society, I am concerned that Nestlé doesn’t put my interests in even the same sentence as that of its shareholders.

Footnotes

35.  Estes, Ralph.  “What You Count, You Get.”  In Context.  1995.   http://www.context.org/ICLIB/IC41/Estes.htm (online 27 July 2001). 

36.  “Nestlé Dumps Ethics at its AGM.”  Baby Milk Action.  http://www.babymilkaction.org/boycott/boyct29.html#3 (online 27 July 2001).