Business ethics and corporate social responsibility An Anglo American case study
Page 3: Why should a business act ethically?
Businesses have great potential to transform people's lives and to alleviate poverty through generating economic growth. They produce goods and services that customers want and they create jobs. Through paying taxes, they contribute to government revenue that can finance schools, hospitals and other public services.
However, a business must keep in tune with the wishes of the societies it serves or it runs the risk of alienating its shareholders, stakeholders and customers. This would be bad for business, reducing growth and potentially affecting profit. Anglo American has to deal with many different levels of interest when setting up a new project. This includes, for example, the owners of the land and the people and services in the area.
The current South African government has a policy of transferring a share of the ownership, management and benefits of the country's mining industry to people previously excluded from the economy. Anglo American is backing the South African government in this process. This includes supporting black economic empowerment deals (BEE). Through this process, Anglo American has sold (usually at a small discount) 26% of its assets in South Africa to BEE groups. For example, Anglo American was instrumental in the creation of Exxaro. This is now the largest black-owned and managed mining company listed on the Johannesburg Stock Exchange. It also aims to have at least 40% of its managers drawn from the ranks of previously disadvantaged ethnic groups.
Social and economic issues
Governments in the developing world face many challenging social and economic problems. They need companies that are ready to be part of the solution.
Anglo American believes that it can support governments in reducing poverty and inequality and in improving health and welfare.
In South Africa, the company has been a major campaigner for AIDS education. It was the first major company in South Africa to announce that it would provide free anti-retroviral drugs to its HIV-positive employees. It now has the largest workplace HIV/AIDS education, voluntary testing and treatment programme in the world. After running the programme for five years studies have shown that the programme has become self-financing through reducing deaths and the attendant loss of skills and cutting absenteeism rates by boosting the health of infected workers.
Anglo American | Business ethics and corporate social responsibility