MHC International Limited – News Item


June 2002


The Social Responsibility of Nation States

To date much of the discussion about social responsibility has been about the social responsibilities of corporations. But we can ask similar questions about the social responsibilities of a Nation State ñ National Social Responsibility (NSR) as well as Corporate Social Responsibility (CSR). CSR is about treating the stakeholders of a corporation in a socially responsible manner. NSR is about treating the stakeholders of a nation in an ethical and socially responsible manner.

To my knowledge no-one has as yet measured and then ranked nations by their social responsibility. There are indices that come close, malady however. For instance, levitra in the literature we can find nations ranked by the degree to which corruption is perceived to exist among public officials and politicians (Transparency International’s Corruption Perception Index) ñ see – Finland comes top on this index. We can also find an index of freedom from the conservative Heritage Foundation (see although this is based on economic freedoms which explains why Hong Kong and Singapore top its list. We can also find an index of political freedoms which, like the former index, also comes from the USA. Published by Freedom House (see its index makes an annual comparative assessment of the state of political rights and civil liberties in 192 countries and 17 related and disputed territories. Top ranked are the democratic industrialized nations as might be expected, with countries such as Iraq, North Korea and Burma at the bottom. Possibly, to complete an index for the social responsibility (SR) of nations one would also have to say something about environmental conditions ñ a sustainable development index for instance. Most people, of course, would consider that the industrialized countries such as the Netherlands, Sweden and Finland would come high on an index of SR. And, again, most people would put the three ‘leper’ nations mentioned above at the end of any list. Curiously, even with the Johannesburg Sustainable Development World Summit only a month away, no index of the sustainable development of countries exists.

Another way to examine the social responsibility of nation states, at a more detailed level than an index, would be to use the stakeholder model that I have frequently used to measure CSR (see and then examine whether each is being treated in a socially responsible manner. Let us, for instance, apply the model to examine the social responsibility of the USA. Again most would put the US high in any ranking of socially responsible States compared with countries where the rule of law and democracy are very low on the agenda. Clearly, the social responsibility of a nation changes over time and much depends on its CEO at the time – in this case President Bush and his administration.

First, who or what are the stakeholders of the USA? Using the parallel to the corporate sector, the internal ones are the management (administration itself, its backers such as the Republican Party and financial interests, Congress and House of Representatives); the employees (the civil service, the army, internal security); the external ones are the community or people (both inside and outside of the country), the environment (both inside and outside the country) and international community (in particular their legal instruments).

The assessment of the social responsibility of a State is obviously much more complicated than that of a corporation, even the largest corporations which have tentacles all over the world. For instance, one key problem is what to do about isolated incidents? The use of one child in one factory producing shoes or whatever for a corporation such as Nike will create a huge outburst of criticism from the press and NGOs to the extent that Nike will see its rank on one of the many scales of CSR around the world drop, investment from social funds drop and possibly a drop in its share price. Isolated incidents such as ‘collateral damage’ in a war or even the deaths of supporters in incidents such as ‘friendly fire’ cannot be judged in the same way – or can they? Should we expect a country to be pilloried for one incident? No, but what we should expect is for a country to minimize such incidents and if they happen to have a procedure to ensure that these incidents do not happen again. To a certain extent the USA has this, but it is well-known that the US can be a dangerous ally in wars and many countries have suffered from ‘friendly-fire’.

Second, does the USA have a value statement or code of conduct for its stakeholders? Yes, it has a constitution that is vigorously policed, by the Supreme Court as the highest body for its stakeholders but only inside the territory of the USA. However, the responsibility of the constitution is the Supreme Court whose members are nominated by political representatives of the past. The value statement fell down badly at the start of this administration when politics dominated the decision to stop the Florida re-count and allow George Bush to assume the Presidency. This one incident would have destroyed a corporation but not the Government of the USA. But since the vote was so close between the two protagonists, one could argue that there was a smooth transition and one that has been accepted by most electors. Curious to outsiders, however, is that the loser who even gained more votes than the winner has no say in the political process of the USA. There is no organized opposition using the leader who came closest to the winner of the election.

Third, does it treat its management in a socially responsibly manner? Certainly the management stakeholders mentioned above are treated very well. In fact some might argue that the financial interests that brought George Bush to power, and here we think of the major oil interests behind the throne, have too much of an influence. Seemingly, these hidden powers dominate the US approach to domestic and international environmental protection, and this has been very negative in the exploration of pristine wild lands and the abrogation of the Kyoto Environmental Treaty on Global Warming.

Fourth, there is no doubt that the USA treats its employees very well, although many would quibble at the need to expand the armed services and the security services when the former is already the most powerful in the world and the latter seemingly adds one incompetence to another. There is some control over the armed forces since their actions are highly publicized through the media. But there is no control over the security services by the public. Of course, secrets would not be secrets if they were publicized, but why does a democratic state need secrets anyway?

Fifth, what about the external stakeholders? These, as noted above, are the people, the environment and the international community (in particular their legal instruments). Internally, the population of the country has a strong voice in the actions of its Government and is listened to carefully. Externally, the current administration is not doing so well. It has abrogated a long list of international treaties ñ from Human Rights, to the environment to weapons control ñ and has shown major disdain for the international community such as the United Nations.

So why, when CSR is becoming an ever larger blip on corporate radar screens (especially in the wakes of the massive impacts of the Enron and WorldCom scandals) does it make any sense to consider the wider targets of nation states and their involvement in SR? The reason is simple: if States cannot behave responsibly what hope is there for other entities such as the corporations themselves, many of which have turnovers greater than the GDP of many individual countries?

[Contributed by Michael Hopkins of MHCi, thanks to Ivor Hopkins for comments on an earlier draft]

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