The sense of CSR that we need back: time to reflect on two CEOs who truly understand corporate social responsibility.

• Author: Hindery, Leo, Jr.
• Position: IT (STILL

ARGUMENTS FOR AND AGAINST corporate social responsibility have taken some very strange twists over the years, the least productive of which is that there are only two possible views of a major corporation: either a company's purpose is only to create wealth for shareholders, or it is at heart a social institution with a duty to resolve the larger problems of society.

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The reality of course is smack in the middle: by being honestly responsible to all of its constituencies, a corporation is indisputably far more likely to be viable into the long term, with greater profitability and thus greater wealth creation for shareholders.

However, this concept requires a new encompassing "corporate responsibility contract" that starts with statesman CEOs who are as committed to a prosperous nation, without the unprecedented income inequality that plagues us today, as they are committed to their shareholders.

We cannot expect all companies to act out of responsible benevolence, however. Therefore, as an important quid pro quo of sorts, there should be a substantially reformed U.S. corporate tax system that incents American industry to invest, grow and hire American workers, which would be smart domestic economic policy on its own and would at the same time level the playing field with our global trade competitors.

Specifically, while formally considering in Congress the significant advantages of adopting a VAT tax system, the corporate tax rate should immediately drop to 25% or even 20%. At the same time, there should be significant tax credits for high employee-based capital investments and R&D, along with more accelerated depreciation, and credits for employee training and retraining. These reforms could save corporations as much as $75 billion annually.

In this contract, CEOs and executives would not be excessively compensated compared to their average workers, and they, along with hedge fund and private equity managers, would be taxed on their earnings at the same ordinary income tax rate of their workers.

Finally, corporations would commit to including easily understandable information in their annual reports regarding the stock options, deferred compensation and personal benefits going to management--and the companies' political contributions.

Henry Ford famously said that his company would prosper only if his workers earned enough to actually buy the Fords they manufactured. And back in 1953 when Charlie Wilson, then...