Editorial: What makes a responsible business?

How are businesses responsible? During Responsible Business Week, this is a question we’re posing. If we are being self- congratulatory we could immediately associate co-ops with being responsible....

How are businesses responsible? During Responsible Business Week, this is a question we’re posing. If we are being self- congratulatory we could immediately associate co-ops with being responsible.

But, before we do that, we need to figure out what an irresponsible business is. It is an obvious step to award some mega-conglomerates the title of Most Irresponsible Business.

And there are many factors that would make a business more irresponsible than responsible. These factors would certainly include putting profit before people, ignoring environmental concerns and lack of transparency – especially when looking at the sourcing of products and avoidance of tax payments.

Co-operatives: the ultimate responsible business?

There are many opinions on the rise of Big Business – which, on the other side of the coin, can be seen as the decline (or merging) of smaller businesses.

It can be argued that in the days when a small family business adorned every street corner, those businesses were not largely irresponsible. One reason for this is that the owner had more oversight over the business.

But as businesses employed more people and became owned by fewer people – often trading across multiple borders – that oversight became trickier.

Smaller businesses also have a community feeling; everyone knows everybody, and any wrongdoing is quickly picked upon.

So with the birth of industrialisation and globalisation, it can be hypothesised that as businesses grow bigger they lose responsibility through the lack of oversight, control and, therefore, transparency.

The assurance of being responsible is built within the rules of a co-op

Rochdale Pioneers Museum, site of the Pioneers' shop on Toad Lane
Rochdale Pioneers Museum, site of the Pioneers’ shop on Toad Lane

Transparency, and, more importantly, control are two massive factors that make a co-op a co-op. By having values and principles at the very core of a co-operative, they allow a business to grow from a small shop in Rochdale to a multi-billion pound retailer – such as the Co-operative Group.

It is this quality that makes all 7,000 co-ops different. The assurance of being responsible is built within the rules of a co-op. Co-ops are community businesses and, whether big or small, oversight is carried out by members.

By having stakeholders within an organisation, people care about how it runs. Be it employees or shopper- members, these people all have mechanisms to keep a check on the business in some way.

Now, this isn’t to say big businesses are all irresponsible. Tesco, for example, has raised over £18m for diabetes; has given 27.5 million meals to people in need through food banks; and has over 500 in-store champions working with communities.

But on the other hand, this has to be balanced with the fact that Tesco is owned by shareholders, so its true stakeholders are the few. Plus Tesco has been embroiled in a number of unfair practices regarding supplier payments, which has come out over the past year.

Of course, like any other business co-ops can make irresponsible decisions. But, the safeguarding of the assets of a co-operative and oversight from members must ensure the business is run more responsibly than others.

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