January 25, 2008 11:45 AM PST
Perspective: On 'creative capitalism,' Gates gets itSee all Perspectives
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Critics argue that donating funds or freeing up employees to work on charitable projects, even if they one day actually turn a profit, violates corporate charters. Corporations need to maximize shareholder value, which means working on high-margin projects and directing profits to dividends.
The fiduciary duty of corporate officers, however, is quite broad. It does not, and never has, dictated that every spare cent must go toward utilitarian function. (If that were the case, corporate lobbies wouldn't feature artwork and polished reception areas. They'd have orange crates and a bulb hanging from the ceiling.) Free-market absolutists on this point are simply and utterly wrong.
A corporation can give to charity, or free up its employees to work on projects with an altruistic bent, if it helps public relations. Intel gives millions in scholarships. Few of the recipients end up at the company. But by doing so, the chipmaker can foster a tight bond with a major research institution.
Creative capitalism can also boost employee morale and loyalty. One of the biggest problems oil companies have faced in recent years has been recruiting. Simply put, oil companies have bad public images and that turns away top grads.
"We will not be able to recruit and retain people if people do not see us as a high integrity industry," Raul Restucci, executive vice president of exploration and production in the Middle East at Shell, said during a conference panel in 2005.
Building leeway and creativity into a job can have huge indirect benefits. And, to focus on the mercenary again, you can't say that these projects won't ultimately prove profitable. After all, how many people 20 years ago believed that the luxury-goods market would be driven by shoppers in Shanghai and Moscow? Fostering relationships now can only help.
Perhaps the toughest roadblock toward acceptance of this kind of system is envy. Deep down, I think most everyone would probably like to work on a project that could make a difference in the lives of others. That is, until you see your college roommate drive by in a Ferrari.
On the other hand, you'll be able to tell him about constructing a subdivision of mud homes in Mali.
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas. He has worked as an attorney, travel writer and sidewalk hawker for a time share resort, among other occupations.
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