Six Responsibilities of the Business Owner

It seems that many managers and CEOs were absent the day they taught business ethics in their MBA courses. At least that’s the perception we, the general public, get. The reason for that is simple: the number one responsibility of a corporation is to it’s shareholders. If their responsibility to shareholders conflicts with another responsibility, shareholders win every time! Combine that with the overwhelming drive to succeed on an individual basis, you have upper management of large corporations who will stop at nothing to please the board of directors and shareholders of their companies. Just because this is what “is,” doesn’t mean this is what ought to be. To whom should these companies be responsible? Better yet, if you own your own business, and you are “your own boss,” where are your responsibilities?

1. Investors. Yes, you are responsible to the people that invested in your company. Those people expected a decent return on their investment based on the information you provided. You have to do your best to deliver while maintaining your integrity and that of your company.
2. Community. You have an obligation to your community. Once you establish your company, grow your company, and do business in a community, you have responsibilities. For one thing, you can’t simply uproot your company and leave because you get a better deal someplace else. You owe it to your community to negotiate and try to work through any issues you have. Second, you and your employees should be volunteering your time and services to local causes and events.
3. Environment. You don’t have to be Al Gore to know that your company impacts the environment. Do what you can to reduce your impact. Recycle, save paper, use less power, less water, less… you get the idea. Conserve. While it has been a politically divisive issue in the past, I believe taking care of our environment should be bi-partisan. It should have less to do with laws and more to do with responsible adults.
4. Employees. Each and every person you hire is a responsibility. Yes, you are responsible to pay them, but what else? You need to provide a good working environment, the tools to succeed, decent wages, and reasonable assurance you’re not going to lay them off at the drop of a hat. Stop thinking like you are doing your employees a favor by hiring them. It is a relationship, and you need to live up to your end of the bargain. In today’s economy, it becomes tempting to hold employees hostage because you know they can’t work somewhere else. Don’t.
5. Government. Pay your taxes and obey the laws. While I do believe corporate income tax has a lot to do with governmental corruption, it is what it is. Don’t evade. Some tax avoidance is OK by timing your purchases and such, but it seems some people will move heaven and earth to avoid paying taxes. Just do it, and be thankful you live in a country where starting a business is virtually as easy as hanging out a shingle (and paying some fees and filling out some paperwork).
6. Customers. This one is easy. Deliver on your promises, and don’t cheat. Never sell a product or service you wouldn’t buy yourself. Again- you are not doing customers favors. They pay you, you deliver. It is an established relationship, and the burden of responsibilities lies on you.

If you cannot or will not live up to all six of these responsibilities, please don’t go into business. If you want to make a positive impact on the world, have fun, and make money, then keep these in mind. For a great resource on this topic, see MEBSR.