What Is the “Iron Law of Responsibility”?
The “Iron Law of Responsibility” refers to the general rule that corporate power must always be checked by social responsibility in order for it to be maintained. Introduced by the theorist Keith Davis during the 1960s, the rule is sometimes also referred to as “The Law of Long-Run Self-Interest.”
Social responsibility should involve consideration for the environment and other issues of public welfare as applicable to specific corporate activities.
The rule was introduced in response to Davis’s observation that people in business tend to be more concerned with profit and immediate economic interests than they are with anything else. He claimed that they should seek to resolve any issues caused by their practices as well.