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Social Responsibility

There are two areas of social responsibility that leaders should consider a high priority:

  • Supporting the health and welfare of the people in the local communities in which they operate; and
  • Ensuring, the environmental and ecological health of the planet.

Welfare of the local community: One business leader who recognised his responsibility to his local community was Aaron Feuerstein.

On December 11th 1995 his Malden Mills clothing material factory located in the small town of Lawrence, Massachusetts in the United States burned down. Feuerstein used the insurance money to rebuild the factory and he also kept all his employees on the payroll with full benefits during the six months of reconstruction.

He said afterwards, “It would have been unconscionable to put 3,000 people on the streets and deliver a deathblow to the cities of Lawrence and Methuen.” Since that time the factory has been through its ups and downs, but is still a significant employer in the area. Feuerstein could easily have taken the money and retired. His actions made him a local hero.

If you are in a business of supplying services to a local community, such as banking, community involvement will be one of the ways to show your customers that you care about them and their lives. We frequently find that community involvement is one of the most important top ten values in successful banks.

Environmental and ecological health: A business leader who recognised his responsibility to create a sustainable future for humanity is Ray Anderson, Chairman and former CEO of Interface Inc., the world’s largest producer of commercial floor coverings.

In 1994, Anderson came across Paul Hawken’s book, The Ecology of Commerce. It changed his life. He decided it was time to “correct the mistakes of the first industrial revolution” by building a fully sustainable company that would target zero waste. He challenged his workers to not only pursue sustainability, but then to become restorative—putting back more than the company takes and doing good to the Earth. He also challenged his suppliers to fall in line with the Interface philosophy.

Commenting on the results of this shift in philosophy Anderson states:

Costs are down, not up, dispelling a myth and exposing the false choice between the economy and the environment, products are the best they have ever been, because sustainable design has provided an unexpected wellspring of innovation, people are galvanized around a shared higher purpose, better people are applying, the best people are staying and working with a purpose, the goodwill in the marketplace generated by our focus on sustainability far exceeds that which any amount of advertising or marketing expenditure could have generated—this company believes it has found a better way to a bigger and more legitimate profit—a better business model. Every aspect of Interface business is evidence of our culture and that culture’s shared commitment to sustainability — it is embedded in the ways in which we make, sell and distribute carpet and present ourselves to our customers and associates; and it is sustained by the innovations that emerge from our offices and plants around the world.

Interface’s “better business model” is anchored in the values of: service, innovation, leadership, commitment, stewardship, integrity, communication, individuality, and professional growth.

According to the company’s EcoMetricsTM and SocioMetricsTM measurement systems, which were installed in 1994, Interface is thriving and continually moving closer to its sustainability vision. Some of the notable accomplishments include:

  • Increase in sales by two thirds and profits doubled since embracing sustainability
  • Avoided costs from elimination of waste since 1995 estimated at $405 million
  • Total waste sent to landfills since 1996 down by 67 percent
  • Total energy consumption at carpet manufacturing plants down by 44 percent since 1996

Interface’s unique culture has been extensively acknowledged and the company has been listed in Fortune Magazine’s “Best Places to Work.”

The new paradigm, 21st century leader should be familiar with the ideas and concepts that support the environmental and ecological movements—such as the Natural Step. They should also be familiar with the UN initiatives that target global sustainability such as the Millennium Goals, as well as understanding when and where to use techniques that allow the exploration of alternative futures, such as Scenario Planning, and the U-Theory.  

The new paradigm leader will need to collaborate with “competitors” in developing industry charters that regulate competition in a manner that supports a sustainable future for our global society, and support internationally recognised frameworks of ethics and policies such as those contained in the Earth Charter or the Caux Round Table.

These challenges go far beyond what our business schools teach. They go to the very heart of our collective human values. They place business in a societal framework, where doing well by doing good becomes the dominant commercial philosophy, and where our business no longer seek to be the best in the world, but the best for the world. Leadership of this calibre will require a strong commitment to ethical conduct.


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