Caux Round Table Principles for Business
In a world which is experiencing profound transformation, the Caux Round
Table of business leaders from Europe, Japan and the United States is committed
to energizing the role of business and industry as a vital force for innovative
The Round Table was founded in 1986 by Frederik Philips, former President of Philips Electronics, and Olivier Giscard d'Estaing, Vice-Chairman of INSEAD, as a means of reducing escalating trade tensions. It is concerned with the development of constructive economic and social relationships between the participants' countries, and with their urgent joint responsibilities toward the rest of the world.
At the urging of Ryuzaburo Kaku, Chairman of Canon Inc., the Round Table has focused attention on the importance of global corporate responsibility in reducing social and economic threats to world peace and stability. The Round Table recognizes that shared leadership is indispensable to a revitalized and more harmonious world. It emphasizes the development of continuing friendship, understanding and cooperation, based on a common respect for the highest moral values and on responsible action by individuals in their own spheres of influence.
The Caux Round Table believes that the world business community should
play an important role in improving economic and social conditions. As a
statement of aspirations, this document aims to express a world standard
against which business behavior can be measured. We seek to begin a process
that identifies shared values, reconciles differing values, and thereby
develops a shared perspective on business behavior acceptable to and honored
These principles are rooted in two basic ethical ideals: kyosei and human dignity. The Japanese concept of kyosei means living and working together for the common good enabling cooperation and mutual prosperity to coexist with healthy and fair competition. "Human dignity" refers to the sacredness or value of each person as an end, not simply as a mean to the fulfillment of others' purposes or even majority prescription.
The General Principles in Section 2 seek to clarify the spirit of kyosei and "human dignity," while the specific Stakeholder Principles in Section 3 are concerned with their practical application.
In its language and form, the document owes a substantial debt to The Minnesota Principles, a statement of business behavior developed by the Minnesota Center for Corporate Responsibility. The Center hosted and chaired the drafting committee, which included Japanese, European, and United States representatives.
Business behavior can affect relationships among nations and the prosperity and well-being of us all. Business is often the first contact between nations and, by the way in which it causes social and economic changes, has a significant impact on the level of fear or confidence felt by people worldwide. Members of the Caux Round Table place their first emphasis on putting one's own house in order, and on seeking to establish what is right rather than who is right.
Section 1. Preamble
The mobility of employment, capital, products and technology is making
business increasingly global in its transactions and its effects.
Law and market forces are necessary but insufficient guides for conduct.
Responsibility for the policies and actions of business and respect for
the dignity and interests of its stakeholders are fundamental.
Shared values, including a commitment to shared prosperity, are as important for a global community as for communities of smaller scale.
For these reasons, and because business can be a powerful agent of positive
social change, we offer the following principles as a foundation for dialogue
and action by business leaders in search of business responsibility. In
so doing, we affirm the necessity for moral values in business decision
making. Without them, stable business relationships and a sustainable world
community are impossible.
Section 2. General Principles
Principle 1. The Responsibilities Of Businesses:
Beyond Shareholders toward Stakeholders
The value of a business to society is the wealth and employment it creates
and the marketable products and services it provides to consumers at a reasonable
price commensurate with quality. To create such value, a business must maintain
its own economic health and viability, but survival is not a sufficient
Businesses have a role to play in improving the lives of all their customers, employees, and shareholders by sharing with them the wealth they have created. Suppliers and competitors as well should expect businesses to honor their obligations in a spirit of honesty and fairness. As responsible citizens of the local, national, regional and global communities in which they operate, businesses share a part in shaping the future of those communities.
Principle 2. The Economic and Social Impact of Business:
Toward Innovation, Justice and World Community
Businesses established in foreign countries to develop, produce or sell
should also contribute to the social advancement of those countries by creating
productive employment and helping to raise the purchasing power of their
citizens. Businesses also should contribute to human rights, education,
welfare, and vitalization of the countries in which they operate.
Businesses should contribute to economic and social development not only in the countries in which they operate, but also in the world community at large, through effective and prudent use of resources, free and fair competition, and emphasis upon innovation in technology, production methods, marketing and communications.
Principle 3. Business Behavior:
Beyond the Letter of Law Toward a Spirit of Trust
While accepting the legitimacy of trade secrets, businesses should recognize
that sincerity, candor, truthfulness, the keeping of promises, and transparency
contribute not only to their own credibility and stability but also to the
smoothness and efficiency of business transactions, particularly on the
Principle 4. Respect for Rules
To avoid trade frictions and to promote freer trade, equal conditions for
competition, and fair and equitable treatment for all participants, businesses
should respect international and domestic rules. In addition, they should
recognize that some behavior, although legal, may still have adverse consequences.
Principle 5. Support for Multilateral Trade
Businesses should support the multilateral trade systems of the GATT/World
Trade Organization and similar international agreements. They should cooperate
in efforts to promote the progressive and judicious liberalization of trade
and to relax those domestic measures that unreasonably hinder global commerce,
while giving due respect to national policy objectives.
Principle 6. Respect for the Environment
A business should protect and, where possible, improve the environment,
promote sustainable development, and prevent the wasteful use of natural
Principle 7. Avoidance of Illicit Operations
A business should not participate in or condone bribery, money laundering,
or other corrupt practices: indeed, it should seek cooperation with others
to eliminate them. It should not trade in arms or other materials used for
terrorist activities, drug traffic or other organized crime.
Section 3. Stakeholder Principles
We believe in treating all customers with dignity, irrespective of whether
they purchase our products and services directly from us or otherwise acquire
them in the market. We therefore have a responsibility to:
We believe in the dignity of every employee and in taking employee interests
seriously. We therefore have a responsibility to:
Owners / Investors
We believe in honoring the trust our investors place in us. We therefore
have a responsibility to:
Our relationship with suppliers and subcontractors must be based on mutual
respect. We therefore have a responsibility to :
We believe that fair economic competition is one of the basic requirements
for increasing the wealth of nations and ultimately for making possible
the just distribution of goods and services. We therefore have a responsibility
We believe that as global corporate citizens we can contribute to such
forces of reform and human rights as are at work in the communities in which
we operate. We therefore have a responsibility in those communities to:
The Principles for Business have been widely utilized not only by companies and business organizations but in schools around the world, and also have been included in numerous books and other publications. Some examples are:
The Principles for Business have been offered as a guide for companies
to develop, re-examine, implement and monitor their own principles. The
real value of any set of principles is in its use and implementation in
day to day business activities. The Caux Round Table (CRT) and the Minnesota
Center for Corporate Responsibility (MCCR) seek to compile evidence of worldwide
best practices and stories of application of these and similar principles
to practical issues. We welcome your sharing examples of best practices
from your companies experience with or without reference to the company
We encourage others who have used the Caux Round Table Principles for
Business to notify us if you would like to be included in this listing.
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