President Howard Bowen & Corporate Social Responsibility

This year marks the 60th anniversary of the publication of an important —  and until recently neglected — book by Howard R. Bowen, president of  Grinnell College from 1955 to 1964. Social Responsibilities of the Businessman (1953) is considered the foundation for the study of corporate social responsibility (CSR). 

By social responsibility of businessmen, Bowen meant “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action  that are desirable in terms of the objectives and values of our society.”

Since the 1960s, both the scholarship and the practice of CSR have expanded exponentially, and women became more visible in business. The discourse of social responsibility now routinely refers to the “triple bottom line,” including not only the economic but also the social and environmental outcomes of enterprise.

Corporate social responsibility in the 21st century is a global business norm, although the debate continues concerning the efficacy of CSR and the degree to which it is used principally as a form of advertising or marketing.  

Bowen’s book received routine and honorific mention for several decades. However, following Archie Carroll’s statement that the book should be considered the seminal book on the subject, it has been cited with increasing regularity during recent years. Carroll is Scherer Professor Emeritus of Management at the University of Georgia’s Terry College of Business.

Bowen’s book was particularly thrust back into the center of CSR scholarship by an article entitled “Rediscovering Howard R. Bowen’s Legacy: the Unachieved Agenda and Continuing Relevance of Social Responsibilities of the Businessman” in the journal Business & Society, December 2011, vol. 50, no. 4.

The authors contended that, “Bowen’s institutional perspective on social responsibility is an authentic treasure that can be fruitfully exploited for future theory building and empirical studies in the business and society/CSR field.”

With increased interest in Bowen’s book, the price of the used hardback edition had gone up to more than $1,000 in October 2013. Fortunately, the book has just been republished in paperback by the University of Iowa Press with introductory essays by one of the authors of the aforementioned article and by Bowen’s eldest son, Peter Geoffrey Bowen. Royalties from this republished book will go to Grinnell College, Claremont Graduate University, and the University of Iowa, the three institutions where Howard Bowen was president or chancellor.

Meager use of this landmark book has been made at Grinnell College in recent years. According to Burling Library records, the single copy of Social Responsibilities of the Businessman in the circulating collection has been checked out only four times since 1989, when digital records were first kept. More importantly, Bowen has not been recognized as an important spokesperson for Grinnell’s social justice tradition.

A prolific scholar, Bowen probably did not speak much about his 1953 book at Grinnell. Former Grinnell President George Drake ’56, a student during Bowen’s early tenure, doesn’t recall hearing about CSR at the time. Rather, Bowen is best known for his scholarship on higher education, including several important books, such as The Costs of Higher Education (1980) and American Professors: A National Resource Imperiled (1986).

Bowen’s distinguished early career was in several government posts, followed by a relatively brief time as dean of the School of Commerce at the University of Illinois. Bowen later taught at Williams College before coming to Grinnell.

“As president of Grinnell College, he probably was, at least in part, responsible for eliminating the business focus of the economics department and was a champion of the campuswide liberal arts focus of the curriculum,” according to Waldo Walker, Bowen’s associate dean at Grinnell. Beryl Clotfelter, professor emeritus of physics, and his wife Mary Lou remember Bowen as kind and welcoming to new faculty families who, like themselves, were starting at the college. 

Bowen did much to build Grinnell’s reputation. He became chancellor of the Claremont Colleges in 1970, where he served for four years. He received numerous awards, including the Distinguished Career Award of the Association for the Study of Higher Education. Walker remembers Bowen as a “very moral person with a rather Spartan perspective about college education.” Following Bowen’s death in 1989, Clark Kerr, former president of the University of California, described Bowen as, “the moral mentor for all of us.” 

Bowen’s book does much to fill a gap in the Grinnell tradition of social justice by extending the domain of moral responsibility into the territory of corporate capitalism. David Morris ’92 worries about “the inherent aversion many (most?) of the U.S. students at Grinnell have to for-profit business,” presumably because of a moral preference for nonprofits. Morris notes that his perception also is based on his “prior experience introducing for-profit careers at Grinnell.”

Some Grinnellians think of for-profit and nonprofit enterprises as different moral universes, but this kind of dichotomous thinking oversimplifies the complex continuum of organizational structures and guiding principles or missions that include social businesses, social enterprises, B corporations (certified for their social and environmental performance), and other organizations with strong social responsibility principles. Bowen concluded in his 1953 book that:

As major objectives I suggest a concerted attempt to eliminate the excessive display and conspicuous waste that result from large incomes; an all-out effort to establish codes of practice for business that will mitigate the harshness of the competitive struggle — in other words, to eliminate unfair practices instead of depending on the government to do it; a resolute undertaking to outlaw the exploitive aspects of advertising and make it in reality a form of service to consumers; encouragement, in all sectors of the economy, of the nonfinancial human incentives which temper acquisitiveness and make for social harmony; a bold attempt, in cooperation with labor, the community, and government, to tame that most dangerous enemy of our economy — the business cycle of boom and depression. 

In the wake of the growth of economic disparities in the United States as well as the financial crisis of 2008, Bowen’s book assumes a new relevance for scholarship and civic discourse concerning the social responsibility of businesses. In the opinion of the authors, Bowen also deserves a more central place in the history of Grinnell’s dialogue on social responsibility, in all sectors of the economy, within a strong liberal arts tradition.

CORPORATE SOCIAL RESPONSIBILITY:

Ben & Jerry’s, Pfizer continue the work

Economist Milton Friedman, writing in The New York Times Magazine in 1970, famously asserted that “the social responsibility of business is to increase its profits.” However, corporations today must be responsive to an increasingly diverse audience, made up of individuals and stakeholders they previously might have been able to ignore. In addition, ethical standards of companies have changed dramatically on a global scale and will likely continue to do so in this century. 

Corporate giving takes diverse forms. Ben & Jerry’s mission statement includes social goals, including: “To operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally and internationally.” 

Many grocery stores donate 2 to 5 percent of each purchase to local causes. Pfizer Pharmaceuticals donates drugs to the uninsured, while Goldman Sachs supports international development organizations. 

Cash donations from America’s 180 largest companies equaled $4.9 billion in 2010. Pfizer Pharmaceuticals gave the most — more than $3 billion in cash and products combined.

Wells Fargo has an extensive policy and reports donations averaging of $865,200 per day to nonprofit organizations and causes. In the 2012 social responsibility report, John G. Stumpf, Wells Fargo president and chief executive officer, explained that the corporation is a learning organization: “We’re committed to connecting with our stakeholders and communities, and to listening and understanding, to doing what’s right, to admitting mistakes and learning from them.” 

In Iowa, Wells Fargo funds or contributes to nearly 200 nonprofit program and activities. 

Together, the corporate social responsibility and socially responsible investing movements have led to substantial improvements in the triple bottom line performance of corporations. Still, controversies continue to rage over the appropriate approach to corporate philanthropy. Many corporations are consistent in their annual donations to environmental and social causes. 

Goldman Sachs’ philanthropy, in contrast, has varied widely, creating some suspicion about a major gift in 2012 from the Goldman Foundation, their main vehicle for CSR. “Is Goldman Buying Redemption?” asked The New York Times on Sunday, Oct. 27. In this article, Susanne Craig explored the possibility that Goldman Sachs is attempting to ward off criticism of Wall Street’s behavior during the economic crisis. Before the crash of 2008, Goldman gave less than 1 percent of its annual pretax earnings to charity; after the crash, the contributions shot up to more than 6 percent of its earnings, supporting highly publicized programs for small businesses and women in developing countries. Warren Buffett, famed investor, philanthropist and a former trustee of Grinnell College, has noted that it is rare for corporations to donate more than 2 percent of their profits to social and environmental causes.

In an opinion survey for Forbes Magazine, the top social responsibility firms according to the public include such iconic brands as Microsoft, Google, Facebook, Apple, BMW, Amazon, and Disney Co. This would not be surprising to Howard Bowen, who contended in his 1953 book: “The businessman had been subjected to pressure originating from the new social climate in which he operates, and at the same time he himself has assimilated many of the values and attitudes that are characteristic of this new social climate.” 

The Nov. 2 issue of The Economist, commenting on the partnerships between nonprofits and corporations, contends that “the benefits of partnerships will never be uniform, smooth, or even very satisfying,” and concludes that corporate-nonprofit partnerships are messy, but “on balance they are forces for good.” That conclusion would have pleased Howard Bowen.