Milton Friedman's famous quote " the business of business is business" is now questioned by many.

John Plender, Chairman of Quintain-Estates PLC, and a Financial Times columnist wrote a very interesting article on January 30th entitled "Flaws in trying to moralize about capitalism." Commenting on the recent Societe General scandal he wrote: "There are huge advantages in commercial life in fostering an ethical culture that guides behavior."

An article in the January 19th issue of the Economist entitled "How good should your business be? Ethical capitalism" states that: "there is money to be made in doing good".

How exactly does ethics impact the bottom line?

The absence of ethical conduct can be very expensive for corporations, including the cost of litigation and fines. The WorldCom scandal caused the loss of 17,000 jobs and brought a company worth $100 billion to bankruptcy.

An ethical culture can engender loyalty that increases motivation and productivity, as well as reduce turnover. A good reputation will also strengthened customer loyalty and help maintained and increase market share.

A 2005 KPMG international survey on Corporate Responsibility, listed the seven most important reasons why major corporations engage in corporate responsibility activity.

1. To have a good brand and reputation
2. To be the employer of choice
3. To have and maintain a strong market position
4. To have the trust of the financial markets
5. To increase shareholder value
6. To be innovative in developing new products and services
7. To create new markets.

However ethics and corporate social responsibility should transcend the however important concern of profitability. There are essential values in our lives that cannot always be measured in financial terms, such as honor, respect and justice.

As the poet and educator William Arthur Ward said:
"Wise are those who learn that the bottom line doesn't always have to be their top priority."