Brands And Best Behaviour

It is a complicated time for brand managers. In the last few years, a number of brands have come under intense scrutiny for reasons ranging from tax avoidance to safe manufacturing environments. Consumers (and politicians) want brands to be good corporate citizens and it has elevated the topic right to the top of the agenda for many businesses. Good news for society, right?

But there is a problem here: companies – or publicly listed companies at least – are about profit, and being a good corporate citizen usually costs money. Maximising shareholder wealth is the CEO's fiduciary duty, let alone their personal incentive in order to retain their job. In the case of tax avoidance for example, it could be seen as financially reckless by shareholders to pay more than is legally necessary.