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Corporate code marries dollars and sense.

MINNEAPOLIS and ST. PAUL -- A global business ethic will develop, if not by design then by default, predicts Kenneth Goodpaster, who holds the Koch Chair in Business Ethics at the University of St. Thomas here.

The reason, he says, is because people increasingly transact business on a global basis, and to do so they "have to have reasonable expectations of one another."

A new effort to produce the ethic by design has resulted in "The Minnesota Principles: Toward an Ethical Basis for Global Business." Last summer, international business executives meeting in Caux, Switzerland, endorsed the principles. The code was presented last month in China's booming Guandong Province and is to be assessed in Japan by U.S., European and Asian businesspeople.

The Minnesota Principles state moral values and proposed rules of conduct for corporations operating in the world community. They call for fairness, honesty, respect for human dignity and respect for the environment, then spell out those values in guidelines for evaluating conduct relating to customers, employees, owners and investors, suppliers, communities and competitors.

Despite endorsement in Caux and distribution of more than 2,000 copies of the principles, they are intended not as a finished product but as an opening bid for discussion, expansion and modification by the world business community. The name "Minnesota Principles" is "a tag of origin rather than a tag of destiny," Goodpaster said.

Similar proposals have arisen in Japan, notably the kyosei concept espoused by Ryazaburo Kaku, chairman of Canon Corp. Kyosei refers to living and working cooperatively for the common good and mutual prosperity.

The businesspeople meeting in Caux last August also endorsed Kaku's principles, and they too were to be discussed in Japan in April.

Robert MacGregor, president of the Minnesota Center for Corporate Responsibility, which is affiliated with the University of St. Thomas and which created the Minnesota Principles, said be expects contributions toward refining "them from all over the world. Already we've been invited to go to Africa and to Russia," he said. He added that they are participating with a university in Mexico in elaborating the principles, and they recently got an invitation from the United Nations to cosponsor a global conference on business behavior. With the interconnectedness of business, with AIDS spreading worldwide from a single locale and with rain forest destruction depleting the world's oxygen supply, "the time is now for an international standard of business conduct," said MacGregor.

Goodpaster said he hoped that by the year 2000 there would have been enough discussion worldwide to get not only some consensus on the wording of the principles, but also consensus on practical implementation. An audit procedure would be needed, he said, so people who traded with companies that signed on would consider their acceptance of the global ethic "as a nontrivial attribute of that company."

In their infancy, the principles represent goals and aspirations," with enforcement provisions yet to come, said MacGregor. Media publicity exposing shabby business practices is one enforcement tool, he said, and businesses sooner or later find ethical behavior to be in their self-interest.

In MacGregor's estimation, Minnesota is an appropriate incubator for the principles. "Minnesota prides itself on its unique quality of life," he said, and 15 years ago, chief executive officers of companies such as Pillsbury, Dayton-Hudson and Green Giant formed the Minnesota Center for Corporate Responsibility to institutionalize their concern about corporate citizen responsibility.

Often when people in other U.S. communities experience a problem, they visit to learn how Minnesotans deal with a similar situation, MacGregor said, and increasingly, civic leaders from around the world are doing the same.

The Minnesota Principles at a glance

The following are some of the responsibilities of businesses as outlined in the Minnesota Principles:

* "To make every effort to ensure that the health and safety (including environmental quality) of our customers will be sustained or enhanced by our products or services."

* To be sensitive to the serious unemployment problems frequently associated with business decisions and to work with governments and other agencies in addressing these dislocations."

* "To disclose relevant information to owners/investors subject only to legal and competitive constraints."

* To seek, encourage and prefer suppliers whose employment practices respect human dignity."

* "To support peace, security and diversity in local communities" and "to respect the integrity of local cultures."

* To refrain from either seeking or participating in questionable payments or favors to secure competitive advantages."

The Minnesota Principles also states, "Business activities must be characterized by respect for the environment. We understand this to mean that business activities should promote sustainable development and prevent environmental degradation and waste of resources."
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Title Annotation:Minnesota Principles: Toward an Ethical Basis for Global Business
Author:Gibeau, Dawn
Publication:National Catholic Reporter
Date:May 14, 1993
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