While there is a vast literature in economics on cost-benefit analysis (CBA), caution is appropriate when applying it and making the business case for human rights. Sen distinguishes two broad kinds of CBA: (1) The general approach to CBA includes explicit valuation, broadly consequential evaluation and additive accounting and is supported by a wide consensus. (2) Additional requirements of CBA are structural demands, evaluative indifferences and market-centered valuation. While they can provide gains mainly in convenience and usability, they significantly reduce the reach of the evaluative exercise. This occurs particularly in the mainstream approach of CBA, which uses the market analogy to assess the costs and benefits of public policies and corporate strategies. The chapter argues that a general CBA approach to human rights is acceptable, but only with limited additional requirements. Dorothée Baumann-Pauly & Michael Posner distinguish the negative and the positive business cases for human rights. The first type is reactive and mostly applies a purely economic rationale. The second type is proactive and innovative, incorporates human rights into the core business strategy and adopts a long-term perspective.

Wealth creation and human rights gain particular significance in the context of globalization, sustainability and financialization. Globalization is understood as “a kind of international system in the making” (T.L. Friedman), characterized by an increasing interconnectedness of the world, due to the revolution of information technology and an immense reduction in the costs of transportation and communication. A new framework of international relations distinguishes four types: the foreign-country type, the empire type, the interconnection type and the globalization type. They are part of the extended conception of business and economic ethics at the micro-, meso- and macro-levels. Sustainability, defined by the World Commission on Environment and Development (1987), is incorporated and concretized in the Sustainable Development Goals (2015). And financialization as “the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies” (G.A. Epstein) stands in striking contrast with the comprehensive conception of wealth creation.

Corporate governance, understood as the authoritative direction and control of the company, has to serve the purpose of the company, that is, to create wealth in the comprehensive sense and to respect human rights. First, the chapter presents a brief overview of different conceptions of corporate governance (Cadbury Report, King Reports I-IV, G20/OECD, Shleifer & Vishny, Monks & Minow, Hilb, Rossouw, U.S. Business Roundtable). Against this backdrop, the book’s new perspective of corporate governance is explained in line with the seven features of wealth creation and the three criteria of respecting human rights. In many situations – like in the Medtronic case – the advancement of one type of capital (for example, human capital) goes hand in hand with the advancement of another type of capital (for example, economic capital). However, the question arises how to deal with trade-offs between different types of capital. It is proposed to define minimal ethical requirements for each type of capital (for example, not to pollute the air) in line with “the balanced concept of the firm.” At this minimal level, no trade-offs are acceptable while, beyond this minimum, trade-offs are allowed. As for human rights, corporate governance requires proactive strategies to prevent trade-offs between human rights.

When considering the wealth of a nation, one easily realizes that wealth is a combination of private and public wealth, not only an accumulation of private wealth. The chapter explains the economic distinction of private and public goods, using the formal criteria of non-rivalry and non-exclusability characteristic for public goods and public bads. While the production of private goods depends on public goods and can suffer from public bads, the production of public goods, in turn, depends on the production of private goods contributed by individuals and companies. Wealth conceived as a combination of private and public wealth has far-reaching implications for the necessary institutions and motivations: the roles and limits of markets and collective actors (such as governments and communities) and self-regarding (particularly self-interest) and other-regarding (such as care, solidarity and compassion) motivations.

The wealth of a society is defined as the total amount of economically relevant private and public assets including natural, economic, human and social capital. In line with the OECD well-being framework, these four types of capital are necessary for the sustainability of well-being over time. Natural capital comprises nonrenewable and conditionally renewable natural assets and natural liabilities, land and ecosystems. Two sets of questions are briefly discussed: how natural capital can be valued in monetary terms and to whom the property rights of natural assets and liabilities should be allocated. Economic capital, consisting of physical and financial capital, is far less complicated to evaluate than natural capital. According to UNECE, OECD and Eurostat, “the observed market prices for produced and financial capital are fair reflections of their well-being effects.” The concept of human capital adopted in this book goes beyond the stock of economically productive human capabilities (G. Becker) and means healthy and educated people, while social capital – in Robert Putnam’s sense – refers to “connections among individuals – social networks and the norm of reciprocity and trust worthiness that arise from them.”

Creating wealth and respecting human rights seem to be an odd couple, the first evoking a rush for money and the second admonishing restraint for politics. And, applied to business enterprises, this couple brings forth an unusual creature: corporate responsibility. In this book I have undertaken to combine these three ideas in the hope that this creation will be well received by scholars, practitioners and a broader interested audience.

The broad vision of wealth creation and human rights developed in Part One and Two is now applied to the ethics of business organizations, which is called “corporate responsibility.” Based on Walter Schulz, the concept of responsibility is defined as a relational concept: the subject of responsibility (who is responsible), the content of responsibility (for what one is responsible) and the addressee (toward whom one is responsible). It involves an inner pole (“self-commitment originating out of freedom”) and an outer pole (“in a worldly relationship”) in critique of Max Weber’s separation of the ethics of convictions versus the ethics of responsibility. In an analogous sense, responsibility characterizes the ethics of business organizations, which is the same term used by the UN Guiding Principles on Business and Human Rights. The chapter develops several ethical explications of the Guiding Principles and concludes with the concept of “corporate responsibility” adopted in this book.

Rarely discussed in the literature, the book defines human rights as public goods. This innovative perspective connects human rights to public wealth (see Chapter 5), characterized by non-rivalry and non-excludability and assessed as “good” – not “bad” – in ethical terms. Human rights are often understood as individual claims addressed to governments or other actors while ignoring their public good character. Some examples illustrate this widespread attitude that is only challenged when the public costs of human rights repression becomes evident. Like public goods in general, human rights can be final goods (or goals to be achieved for themselves) or intermediate goods (or means to realize other goods or rights). This means that securing human rights has far-reaching positive consequences while abusing human rights generates severe public bads by also violating other human rights and causing economic and social harm. – Due to their public good character, two wide-ranging implications follow: Human rights cannot be achieved by market institutions, but need collective actions at multiple levels of society; and self-regarding motivations alone inevitably fail to establish, fulfill and guarantee human rights, whence other-regarding motivations are indispensable.

This chapter explores corporate responsibility for less income inequality within the boundaries of the organization and with regard to society at large. Instead of examining the entire range of income distribution, the focus is on the lower and upper ends. The ‘floor’ is defined as a living wage, supported by strong economic and ethical arguments and proposed as a minimal income standard that can – and thus should – be implemented by companies. As for the ethically acceptable ‘ceiling’ of executive compensation, its identification and justification are more complicated. However, strong economic and ethical arguments can be made in favor of a drastic reduction of executive pay. Corporate responsibility for less income inequality in society means, first, to ‘walk the talk’ and set an example and, second, to be ‘a good corporate citizen’ by supporting legislation for a living wage and an ethically acceptable ceiling of executive pay.

Creativity and innovation have been vital in the history of humankind in all spheres of life and pose unprecedented challenges today. It is therefore appropriate to clarify these terms and emphasize their importance for the creation of wealth, drawing on relevant literature of economic history and innovation. Creating is more than possessing and acquiring wealth; it means making – not only imagining – something new and better. While innovation goes beyond invention by rendering new ideas feasible in economic and financial terms, it needs to be qualified in ethical terms as well because innovation can be highly unethical, like, for instance, human cloning. The chapter refers to multiple aspects of ethical innovation for wealth creation, based on the book Ethical Innovation in Business and the Economy by G. Enderle and P.E. Murphy (2015).

The concept of sustainability explained in Chapter 2 is further developed in terms of human capabilities proposed by Amartya Sen and Martha Nussbaum. Human capabilities are defined as “real freedoms that people have reasons to value.” Some of these capabilities may be quite elementary, such as being adequately nourished and escaping premature mortality, while others are more complex, such as having the literacy required to participate actively in political life. In contrast to utility-based and resource-based approaches (that is, utilitarianism and Rawls’s theory of justice, respectively), human capabilities provide a robust informational basis for interpersonal comparisons that is necessary to reduce injustices and advance good societies. They are relevant for all types of capital (natural, economic, human and social) as well as for private and public goods and wealth.

Universities are not only institutions of higher education; they also constitute powerful economic actors not the least as buyers of products and services for their own use and for sale to their customers. A special category of products is the clothes, sportswear, memorabilia and many other goods which carry – often conspicuously – the logo of the university. The chapter narrates the 20-plus year history of the search by the University of Notre Dame for its policy to promote corporate responsibility in the supply chains of Notre Dame trademark-licensed products. With the help of two organizations specializing in supply chain assessment, Notre Dame developed a new policy, which is appropriate – with a high level of confidence – to respect human rights in factories located in countries with and without national legislation of freedom of association and collective bargaining. The chapter concludes with policy suggestions for other universities and outlines several research opportunities for investigating corporate responsibility in supply chains.