The Ethical Executive

The Vaticans strategic plan for the business community

BY MICHAEL NAUGHTON
hen a business leader confronts Catholic presented a document titled Vocation of the Business social principles, there is often a dual Leader to 2,000 business leaders at the International response that was best captured by Andre Christian Union of Business Executives World Congress in Delbecq, former dean of Santa Clara Lyon, France. The document, which I coordinated and Universitys business school: We seem to have a sense of helped draft along with colleagues from around the world, what we yearn for, but behavioral specificity is thin. Catholic signals a watershed moment. The church, drawing from its social teachings principles of human dignity, the common good, solidarity and subsidiarity inspire a deep sense that there is something more to business than merely maximizing wealth for owners. But once this inspiration moves to practice, specifics are hard to locate, and yearning turns into vague sentiment. As important and as rich as the Catholic social tradition is, its principles have not been effectively communicated to the business community. For many business people, the social principles of the church are perceived as well intentioned but too abstract to have any impact. These principles do not seem to land anywhere, but rather float in the stratosphere of theory. As one chief Apple Inc.'s chief executive officer, Tim Cook, second from left, visited the iPhone production line at Foxcomm Zhengzhou Technology Park, in China's Henan Province, in executive officer said to me not March. Cook has been trying to respond to criticism of the treatment of workers by the long ago, I wouldnt know the Chinese industrial giant Foxcomm, its subcontractor, which Apple acknowledges was in common good if it bit me. For violation of Apple's ethical standards. the most part, business people have received little help from the church or the academy in rich social tradition, all but declared that God loves busitheir desire to move from principle to practice. nesses and offered concrete ways to bridge principle and This gap is not an easy one to bridge, but a recently practice. (The complete document is available at released document by the Vaticans Pontifical Council for www.bit.ly/businessleadervocation.) Justice and Peace is a move in the right direction. On March 30, 2012, Cardinal Peter Turkson, president of the council, Business Plan Vocation of the Business Leader takes to heart Pope Benedict XVIs call in Caritas in Veritate (2009) to a proMICHAEL NAUGHTON is director of the John A. Ryan Institute for foundly new way of understanding the business enterprise. Catholic Social Thought of the Center for Catholic Studies at the University of St. Thomas in Minneapolis, Minn. Writing in the context of the financial crisis, he explains
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that the economic world is in need of rediscovering deeply the social demands of faith and conceals rather than reveals moral and spiritual principles, which will orient it toward the authentic face of God and religion (No. 19). better, more effective, more humane business practices. Like To show the implications of this vocation, Vocation of the all institutions, whether church, government or education, Business Leader is organized according to a structure combusiness is in need of renewal and reform. It needs to mon in the Catholic social tradition: See, judge and act. rethink its purpose, its telos, if it is to be contributor to the Anyone in business sees the increasing complexity of doing common good rather than a drain on it. business. Vocation of the Business Leader does not shy away Catholic social principles help articulate this new under- from the serious and complicated trends within business and standing. In light of the ongoing the moral and spiritual issues they financial and cultural crises in present. While it recognizes a wide What Businesses Should Do which we find ourselves, the variety of challenges and opportunineed is clear and the opportunities, it focuses on four: globalization, Meet the needs of the world. Businesses ty could not be better to bring communication technology, finanproduce goods which are truly good and this set of principles into focus. cialization and cultural changes. services which truly serve; that contributes to the common good. They maintain soliAt the heart of the document is These trends or signs, the document darity with the poor by being alert for the conviction that business explains, are a complicated mix of opportunities to serve otherwise deprived executives are called not just to factors that present a complex and underserved populations and people in do business, but to be a particuinterplay of light and dark, of good need. lar kind of leader in business. and evil, of truth and falsehood, of Organize good and productive work. The actions of business people opportunities and threats. Businesses make a contribution to the comare significant because they The document describes, for munity by fostering the special dignity of engrave a specific character on example, the increasing phehuman work. They provide, through subtheir work communities, one nomenon of financialization, a sidiarity, opportunities for employees to that takes them and others fancy academic term for the shift in exercise appropriate authority as they consomewhere. Ten years ago, John a capitalist economy from productribute to the mission of the organization. Kavanaugh, S.J., wrote in this tion to finance as the determinant Create sustainable wealth and distribute magazine that our choices are for economic development. In a it justly. Businesses model stewardship of the prime indicators of our deswell-ordered market economy, resourceswhether capital, human or envitiny. Human work, and in parfinance is at the disposal of producronmentalthey have received. They are just in the ticular the work of business tion, development and wealth creallocation of resources to leaders, is not a second-rate ation, allowing productive investall stakeholders: employvocation, but, as Vocation ments and improvement of human ees, customers, investors, states, it is a genuine human resources. By contrast, financialsuppliers and the community. and Christian calling from ization switches this relationship, God. The document sees busiand production comes to be at the ness not simply in terms of a legal disposal of finance. minimalismdont cheat, lie or deceivebut rather as a Ask any business person today, and most will tell you vocation that makes an irreplaceable contribution to the that business worldwide has intensified tendencies to commaterial and even the spiritual well-being of humankind. modify relationships and reduce them to one value There is nothing second-rate about this. pricethe price of a product, the compensation of labor But this vocation is not without difficult challenges, espe- and the monetary value of the company. The mantra in cially in the modern world. Chief among these difficulties is business and increasingly in other areas of life is if it cant a divided life, or what the Second Vatican Councils be measured it does not exist. And the one clear measurePastoral Constitution on the Church in the Modern ment in business is financial. Without a strong sense of World calls a split between the faith which many profess vocation, financialization becomes the default mechanism and their daily lives (No. 43). The council saw this split as that moves business from relationships of virtue to the thin one of the more serious errors of our age. Religion and thread of price. family are too often viewed less as components of a social institution than as a private enclave where individuals live Practical Principles out their own private preferences. Business is viewed as a At the center of the document is a rearticulation of the mechanical operation of inputs and outputs that need to be churchs social principles for business leaders to judge and engineered for maximum efficiency. This divided life mutes discern what is good and not so good in business. The docu18

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ment lays out six practical principles in relationship to three humane job design, responsible environmental practices, essential objectives of business. These six principles attempt social and socially responsible investment. Such cultivation to help business people to see things whole and not just as would also address a host of other organizational practices parts. Business leaders are tempted to fixate on one principle such as hiring, firing, layoffs, marketing and advertising, or area of business over another. A common fixation is on receivables and payables, board governance, employee trainwealth creation and stewardship at the expense of wealth dis- ing, leadership development, supplier relations and more. tribution and justice, a focus on shareholders at the expense of the dignity of employees. Wise and just business leaders Return on Investment avoid such dichotomies and seek deeper levels of integration. Vocation asks much from contemporary business people; The document resists the temptation to draw up a detailed it also foresees new challenges for Catholic educators. The list of policy recommendations and instead provides a frame- document asks Catholic universities and especially their work of action that reflects the rhythm of the contemplative business schools to foster a mission-driven approach to curriculum and research. While and active life. In Caritas in Catholic business schools have Veritate, Pope Benedict captures made helpful contributions in this rhythm when he defines Genesis of a Teaching Document the areas of business ethics and charity as love received and The publication of Vocation of the corporate social responsibility, given. The document explains Business Leader is a sign of the leadership they have not engaged the that the first and for some the of Cardinal Peter Turkson and Bishop Mario Catholic social tradition in relamost difficult act is to receive Toso at the Pontifical Council for Justice tion to business thoroughly what God has done for him or and Peace, who are seeking a broad colenough. Instead, they have her. A principal challenge for laboration of academics and practitioners in order to better evangelize the social largely drawn upon ethical trabusiness people is that their can world. The genesis was a seminar orgaditions like utilitarianism, do and practical orientation can nized and sponsored by the council entiKantianism and other secular tempt them to regard themtled The Logic of Gift and the Meaning of systems to understand the role selves as determining and creatBusiness (visit bit.ly/businessvocation). The of ethics in business. ing their own principles, not as council brought together business leaders In Caritas in Veritate, receiving them. What is desperand academics from various disciplines, like Benedict observes that business ately needed for business people economics, theology, philosophy, manageethics severed from a theological is first to receive, and in particument, business ethics and engineering, to grapple with Pope Benedict XVIs insights anthropology risks becoming lar: to receive the sacraments, to in Caritas in Veritate. One fruit of this subservient to existing economic accept the Scriptures, to honour exploration is Vocation of the Business and financial systems rather the Sabbath, to pray, to particiLeader. than correcting their dysfuncpate in silence and in other discitional aspects (No. 45). It is plines of the spiritual life. These important for Catholic universities are not optional actions for a Christian, not mere private acts separated and disconnected to reconsider their own tradition and discuss it in the context from business. This can be a powerful shift from the over- of other approaches; otherwise, the tradition will fail both to charged activism one finds in business. Without a deep well develop in a robust manner and to contribute to the wider of reflection, contemplation and prayer, it is hard to see how culture. business people, or any other professionals, The Catholic social tradition brings can resist the negative dimensions that forth a rich interplay of teachings, ON THE WEB come from financialization, technological thought and practice to the area of busiThe full text of Vocation of a overload, hyper-competitive situations and ness and penetrates deeply into the signifBusiness Leader. americamagazine.org the like. icance of human action. Vocation of the The second act to which the church Business Leader is a timely response that calls the business leader is to give in a way articulates a coherent set of social princithat responds to what has been received. This giving is never ples governing business practice that arise from the Catholic merely the legal minimum; it must be an authentic entry social tradition. The Pontifical Council asks business people into communion with others to make the world a better to reflect on their vocation, guided by church teaching, with place. In particular, the giving of business leaders entails cul- the hope of more fruitful dialogue to come and a meaningtivating practices and policies that foster integral human ful spiritual and practical return on investment from these A development. These include fair pricing, just compensation, Catholic business principles.
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