Take on responsibility.

• Author: Gearino, G.D.
• Position: FINEPRINT

In the business world, "socially responsible" is fast becoming what "low fat" is to potato chip makers: a suggestion of goodness, a whiff of virtue and a declaration of commitment to the values of its customers (who may not exactly go around preaching, or even living, those values but surely appreciate goodness by association). Casting a skeptical eye on such a socially responsible business as The Redwoods Group Inc. is akin to wondering out loud about Mother Teresa's secret motives. What soulless creature even starts down that path? Naturally, I'll take a whack at it.

I first heard of the Morrisville-based insurer a few years ago, while interviewing a teenage cancer patient who had founded a surprisingly successful charity focused on providing various diversions--coloring books, DVDs, phone cards, etc.--to sick children. When I remarked on the professionalism of the operation, the young philanthropist mentioned that "Kevin" had made his company's office staff available for virtually all administrative chores. That company was Redwoods, which provides comprehensive insurance to YMCAs and Jewish Community Centers, and "Kevin" was its CEO, Kevin Trapani.

I began to notice Redwoods popping up occasionally in the news, almost always in relation to its carefully nurtured image as a do-gooder company. For instance, it requires employees to perform at least 40 hours of community service annually (while on the company clock) and limits Trapani's pay to no more than 10 times that of its lowest-paid office grunt. It also invites representatives from Duke University's and UNC Chapel Hill's graduate business schools to conduct an annual "social audit" to ensure that Redwoods hews to its principles. It was amusing, then, to see these headlines both appear in my local paper within 14 days: The first said, "Social Responsibility Doesn't Have to Hurt Profits"; the second, "Civic-Minded Redwoods Loses Money with Pride." Together, they handily sum up the ethos of do-gooder capitalism: If you make money, you're doing something right; and if you lose it, you're still doing something right. It's all gooder.

There is much to admire about companies that value their employees, contribute to the economy and sacrifice short-term profit for long-term stability. But practicing that style of capitalism with the fervor applied by Redwoods means decision-making becomes much more complicated, as an hour-long conversation with Trapani revealed. It's one thing to be bound...