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Guiding Books 13 August Aug 2018 0830 13 August 2018

Italian PM Conte’s “responsible company”

Some months before rising to the status of PM and taking up residence in Rome’s Palazzo Chigi, the Head of the Council of Ministers published an essay dedicated to corporate social responsibility. For those who wish to understand the path the Government will take in this regard, it is a must-read

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On the one hand: “Those who take on the complex risks that accompany economic activities and decide to start a company are not acting out of a spirit of goodwill to the next person or a fit of solidarity towards the community they live in.” And yet, “It’s also true that anyone attempting entrepreneurship is soon forced to handle (...) a complex and well-defined business where the prospect of economic advantage - which, naturally, must not be neglected - is overtaken and blended with many other prospects and demands, some of which are not solely economic.”

And it is this line of apparent contradiction that current PM Giuseppe Conte traces in his 350-page essay, L’Impresa Responsabile (Giuffré, January 2018). Also in the preface, Conte outlines the perimeter within which his work is contained: The research, primarily through studying the legal rules, uncovers the rise of a new way of operating in the world of business. It tells us the meaning of the new design, oriented around community and values, that has come into being - a development that has taken place over the course of several governments - in the word of economic activity.” Conte, from Italy’s Puglia region, specifically cites French philosopher Emmanuel Lévinas as he discusses the many “double movements” involved in social responsibility. It means responsibility in terms of the economic activity, of course, but also legal, social and moral responsibility towards “our own employees, consultants, suppliers, consumers, users and the entire community within which the company operates.”

We need to create a dialogue between the law, ethics and the economy, one that is more intense than it traditionally has been.

Giuseppe Conte, Italian Prime Minister

But what do we really mean by “double movement” in regard to social responsibility? According to Conte, “The strong conviction of an author (...) is that to understand the complex phenomenon we need to create a dialogue between the law, ethics and the economy, one that is more intense than it traditionally has been.” Essentially, going back to the Lévinas philosophy, “Responsibility is always double-sided”. Or, in other words, we need to recognise those for whom we are responsible, account for those for whom we are accountable. It means taking responsibility for those who look up to us.

From Conte’s research he has deduced that, “Ethics are occupying an increasingly large space in the economic area and in legal regulations. It is an undeniable fact, supported on many levels.” This can be seen from the increasingly frequent inclusion of social and sustainability reports and ethical codes and committees in companies’ governance systems. This inclusion also responds to an ethical demand from the consumers the PM defines as “politicised”. “A company that looks to succeed in the medium and long term, that wants a stable share of the market, cannot overlook best practices nor neglect to adopt behaviour that the society within which it operates deems virtuous.” Which leads us to Conte’s definition of corporate social responsibility: “A socially responsible company is one that performs economic activities and pursues profitable objectives while also maintaining an awareness of the impact its initiatives have socially and environmentally and, as such, strives to prevent those initiatives from causing risk or damage to society and to future generations.”

Previous governments have shown increasing appreciation for social demands and stakeholders’ interests in running businesses.

Giuseppe Conte, Italian Prime Minister

Having defined this perimeter, Conte focuses on two innovative types of socially responsible company: the new social enterprises and benefit corporations. Chapter five is dedicated to the former and the following chapter to the latter.

The regulations concerning social enterprises were revised by Italian Legislative Decree no. 112 of 3 July 2017, while benefit corporations were introduced by Law no. 208 of 28 December 2015. The two types of company represent two formulae: the first emerges from the world of non-profits and the second from the more traditional profit-making business. Both, however, combine the classic company model - built around profit-making - with that of third-sector organisations. Conte explains that, “Governance of social enterprises (...) clearly seems to be built around recreating the established traits of a typical ‘company’, even if part of a special regime characterised by the social values that such a company wishes to carry forward.” The social benefit model “is inserting itself fully into the slow and gradual process that - over the course of the most recent governments - has led to increasing levels of appreciation for social enterprises and boosted the interest of various stakeholders in entrepreneurship.”

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