The Mitchell and Sons CEO makes the following argument against investi

QUESTION

The Mitchell and Sons CEO makes the following argument against investing in CSR: “Shareholders and investors put money into the company in order to receive a return on their investment from the company’s profits.

The pursuit of CSR does not have a goal of maximizing profits. Therefore, investing in CSR-related measures would violate the company’s primary responsibility.” Which of the following, if true, most undermines the CEO’s argument?
A) There are other ways for a company to be ethical besides CSR.
B) The law requires companies only to conduct business in a way that is not fraudulent.
C) The company’s shareholders come from a wide variety of social backgrounds.
D) The company’s shareholders want their investments to be put toward goals that are socially responsible as well as profit-making.
E) The company’s shareholders own stock in a wide variety of companies.

ANSWER

Answer: D
Explanation: D) If the shareholders want their investments to not only pay them back but to also support socially responsible goals, then this undermines the argument that investing in CSR would be irresponsible to the shareholders. Choice A does not weaken the argument that CSR will violate the company’s responsibility to its shareholders. Choice B is incorrect because legal requirements do not spell out all that is required for CSR. Choice C does not relate to the argument about whether CSR would violate the company’s responsibility to its shareholders. Choice E is incorrect because even if shareholders’ investments are diversified, they could still presumably expect each company to pursue profits.