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Typically, responsibility is something people working in a business presume applies to the other guy…whether a customer, supplier or distributor.  The idea is that then the other guy will pay for the problem.  That someone working in the business might have been at fault is not even considered, at least outwardly, in this mentality of otherness-responsibility.  Responsibility here means “I won’t pay; you must pay!”  It is essentially immature self-centeredness and cheapness used as a weapon.

In general terms, responsibility follows, or depends upon, there being some action thought to be required of someone.  Only if Susan is to pick Billy up at practice at 4:30pm is it her responsibility to do so.  The attribution of responsibility depends on the premise that Susan is required, or has agreed, to make the pick-up.  Were it unclear whether she or say Mary were to make it, Susan could reply to someone’s claim that she is responsible for picking up Billy that she is not responsible because it is Mary’s turn.  The attribution of responsibility depends on an agreement as to function or action coupled with a particular agent.   In the case of a businessperson telling a customer what the customer’s responsibility is, the customer could reply “I did not agree to do X so I am not responsible for it; in fact, you are responsible for it because your advertisement states that your firm does X.”  So disagreements about responsibillity are actually disagreements as to who does what.

Corporate Social Responsibility as a movement presumes that managers do X beyond their respective firm’s maximizing or satisficing shareholder returns.   The managers have a fiduciary responsibility to act in the interests of the owners of the wealth that is the corporation because it is a requirement that the managers do so.  Expanding the managers’ functions beyond maximizing returns (and minimizing cost consistent with those returns) is a matter on which reasonable people can disagree because the question is really about what sort of society we want.   However, using responsibility as a way of imposing such an expansion beyond that which has been agreed to is to use the term prescriptively—meaning that there is over-reaching involved.   I would like managers to do Y as well as X, so I declare managers to have a responsibility to do Y (as well as X).   Responsibility really isn’t the right word here because the underlying agreement on the agent-function matter has not been established.  In other words, responsibility properly follows from a given agent-function rather than institutes it.   Claiming that corporations have a responsibility to act in concert with public opinion or extant social norms—to the extent that it goes beyond the business profit calculus—is to use responsibility in a way that presumes more than is presently the case.  This use of the term is really an instance of ideological prescription rather than a reminder of an agreed social contract that has modified the corporate fidicary duty to the owners of the private property.    Using the term responsibility to create an agent-action foundation puts the horse before the carriage.

So we over-reach when we say that the bankers of the commerical and investment banks that are too big to fail have a responsibility to act within public opinion on the bailout (e.g., concerning bonuses and trading on the banks’ own books).  Even if it is in the long term interest of the financial institutions that the financial system remain viable, the managers correctly point out that their responsibility (i.e., agreed upon actions) is to act in their stockholders’ interests.   To say that the big banks had a responsibility to rescue Lehman Brothers in September, 2008 even if doing so is not in their respective stockholders’ interests is essentially to express the public’s (and government’s) wish that Wall Street step up to the plate and do what is good for the system.   To make saving a bank too big to fail part of the big banks’ responsibilities, there would have to be a requirement that they do so (unless they agree that it is part of their activities).   That is to say, there would have to be a law or regulation because otherwise there is not apt to be the sort of mutual agreement out of which responsibilities can be extracted.  A person can say, “the law says you must do Z, therefore it is your responsibility to do Z.”  The response can’t very well be “Well, the law doesn’t apply to me so it is not my responsibility to do Z because I haven’t agreed to do it.”  This is not to say that a typical manager wouldn’t like to use such a line if he or she could get away with it.  Such a self-maximizing mentality makes the legal foundation of responsibility all the more important.

On the question of whether more government regulation is needed for banks too big to fail (as well as health insurance companies), I would shelve the use of the term responsibility and look instead at the mentality of managers in general (as well as in the industry in question).   Whereas the Senate can be likened to a herd of cats instinctively unwilling to be managed, a corporation can be likened to cats circling tuna.   The tuna is their required function: to act in the interests of the stockholders (typically short term).  To expand a business manager’s function to include working against systemic risk (banking) and working so all American citizens are covered (health-insurance) is an excercise in futility unless these functions dovetail with the stockholder/profit interests.  So in addition to government regulation being necessary (as responsibility is not sufficiently viable as a constraint because the agent-action foundation has not been established),  regulators would have to monitor the companies to keep the managerial feet to the fire.  Also, the regulators would have to be monitored because of the managers would have an incentive to capture the agencies that otherwise pin in the firms.  The managers will constantly be trying to turn toward the tuna.  Whether hardwired or socialized by managerial culture to do so, managers can be expected to incessantly strive for more tuna.

As an example of such striving being at the antithesis of constraint, logging companies that sold forests to the US National Parks in the mid-twentieth century continued logging even after the managers knew the sales had gone through.  Also, the managers of the banks too big to fail fought financial regulatory reform in the wake of the banks’ own culpibility in the crisis of 2008.  In addition to reading this as presumption to excess, it can be interpreted as the allure of the tuna always there.  Even if a cat could feel guilty for having knocked over a vase on the way to the food, the animal would turn right around and fight efforts to thwart it from the tuna.  The guilt is extrinsic to the animal as it pursues the tuna.  That is to say, we impose ought on an activity that is simply an “is” to the cat.   As Hume points out, you can’t get ought from is.  The cat’s mentality is essentially to keep striving for tuna, which ideally (to the cat) means ignoring constraints (if possible).   If managers could routinely ignore the law when it is in their interest, it is futile to believe that they would be the sort of creatures that would allow themselves to be guiled into acting within the contours of social norms.  What I am getting at is this: In the CSR movement, there is far too much reliance on the good faith of managers of companies—as if they can be lured away from the tuna, even for a minute for a good cause. The CSR movement ignores the managerial nature, or mentality, or tries to modify it with insufficient force.   The mentality is far too intractable and the use of responsibility far too over-reaching for CSR to be viable in the real world. Essentially, the CSR movement, even in its beginnings in the 1950’s by a few well-meaning though naive businessmen, presumes Hume’s naturalistic fallacy as somehow invalid (meaning that extant societal norms can be taken as normative on their own basis and managers can be presumed to have a responsibility to act in sync with them even if doing so is not in the stockholders’ interest).

We should not rely on CSR or good corporate citizenship in lieu of government regulation when business firms (or entire industries) put us or our society at risk of harm.  The business calculus understands requirements, not “oughts,” and responsibility follows (rather than establishes) the requirements.   To presume otherwise is mere wishful thinking along with a dash of imposing, which is really the self projecting itself on to the world—making the world in its own image.