The Vocation of the Business Leader: Pontifical Council of Peace and Justice

From the 24th to 26th of February 2011 a seminar entitled “Caritas in Veritate: The Logic of Gift and the Meaning of Business” was held at the Pontifical Council for Justice and Peace (PCJP), in collaboration with the John A. Ryan Institute for Catholic Social Thought of the Center for Catholic Studies at the University of St. Thomas and the Ecophilos Foundation. The meeting followed the October 2010 conference “Caritas in Veritate and the USA”, which the PCJP held in partnership with the Institute for Advanced Catholic Studies of Los Angeles, and continued its study of business organizations in light of Pope Benedict XVI’s social encyclical Caritas in Veritate. Underlying both meetings is the Church’s firm conviction that every Christian is called to practice charity in a manner corresponding to his vocation and according to the degree of influence he wields in the polis (CIV, 7). Business men and women, university professors, and experts on the subject contributed to “Caritas

in Veritate: The Logic of Gift and the Meaning of Business” in an innovative way. Their discussions centered on a volume of texts, previously prepared and published, which facilitated the debate that took place during the three-day seminar at the Pontifical Council for Justice and Peace. The working days were intense and profitable. Indeed, the meeting resulted in the resolution to write out a kind of vade-mecum for business men and women, a handbook to be utilized by professors in formative moments and for instruction in schools and universities. This is the way in which the reflections contained in this volume, “The Vocation of the Business Leader”, came to light. The volume is intended to be an educational aid that speaks of the “vocation” of the business men and women who act in broad and diverse business institutions: cooperatives, multinational corporations, family businesses, social businesses, for-profit/ non-profit collaborations etc.; and of the challenges and opportunities which the business world offers them in the context of intense technological communications, short-term financial practices, and profound cultural changes.Business leaders are called to engage the contemporary economic and financial world in light of the

principles of human dignity and the common good. This reflection offers business leaders, members of their institutions, and various stakeholders a set of practical principles that can guide them in their service of the common good. Among these principles, we recall the principle of meeting the needs of the world with goods which are truly good and which truly serve without forgetting, in a spirit of solidarity, the needs of the poor and the vulnerable; the principle of organising work within enterprises in a manner which is respectful of human dignity; the principle of subsidiarity, which fosters a spirit of initiative and increases the competence of the employees—considered “co-entrepreneurs”; and, finally, the principle of the sustainable creation of wealth and its just distribution among the various stakeholders.

In these difficult times for the world economy, during which many business men and women suffered the consequences of crises that deeply reduced the income of their enterprises, risked their survival, and threatened many jobs, the Church does not relinquish the hope that Christian business leaders will, despite the present darkness, restore trust, inspire hope, and keep burning the light of faith that fuels their daily pursuit of the good. Indeed, it is worth recalling that Christian faith is not only the light that

burns in the heart of believers but also the propulsive force of human history.

Peter K. A. Cardinal Turkson

Bishop Mario Toso

FOREWORD

THE LOGIC OF THE GIFT

2 ~ THE VOCATION OF THE BUSINESS LEADER

VOCATION OF THE BUSINESS LEADER

EXECUTIVE SUMMARY:

When businesses and market economies function properly and focus on serving the common good, they

contribute greatly to the material and even the spiritual well-being of society. Recent experience, however,

has also demonstrated the harm caused by the failings of businesses and markets. The transformative

developments of our era—globalisation, communications technologies, and financialisation — produce

problems alongside their benefits: inequality, economic dislocation, information overload, financial

instability and many other pressures leading away from serving the common good. Business leaders who

are guided by ethical social principles, lived through virtues and illuminated for Christians by the Gospel,

can, nonetheless, succeed and contribute to the common good.

Obstacles to serving the common good come in many forms —lack of rule of law, corruption, tendencies

towards greed, poor stewardship of resources—but the most significant for a business leader on a

personal level is leading a “divided” life. This split between faith and daily business practice can lead

to imbalances and misplaced devotion to worldly success. The alternative path of faith-based “servant

leadership” provides business leaders with a larger perspective and helps to balance the demands of the

business world with those of ethical social principles, illumined for Christians by the Gospel. This is

explored through three stages: seeing, judging, and acting, even though it is clear that these three aspects

are deeply interconnected.

SEEING the challenges and opportunities in the world of business is complicated by factors both

good and evil, including four major “signs of the times” impacting business. Globalisation has brought

efficiency and extraordinary new opportunities to businesses, but the downsides include greater inequality,

economic dislocation, cultural homogeneity, and the inability of governments to properly regulate capital

flows. Communications Technology has enabled

connectivity, new solutions and products, and

lower costs, but the new velocity also brings

information overload and rushed decision-making.

Financialisation of business worldwide has

intensified tendencies to commoditise the goals of

work and to emphasise wealth maximisation and

short-term gains at the expense of working for the

common good. The broader Cultural Changes of

our era have led to increased individualism, more

family breakdowns, and utilitarian preoccupations

with self and “what is good for me”. As a result

we might have more private goods but are lacking

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significantly in common goods. Business leaders increasingly focus on

maximising wealth, employees develop attitudes of entitlement, and

consumers demand instant gratification at the lowest possible price.

As values have become relative and rights more important than duties,

the goal of serving the common good is often lost.

JUDGING: Good business decisions are those rooted in principles at the foundational level, such as

respect for human dignity and service to the common good, and a vision of a business as a community of

persons. Principles on the practical level keep the business leader focused on:

􀁳 producing goods and services that meet genuine human needs while taking responsibility for the social

and environmental costs of production, of the supply chain and distribution chain (serving the common

good, and watching for opportunities to serve the poor);

􀁳 organising productive and meaningful work recognising the human dignity of employees and their

right and duty to flourish in their work, (“work is for man” rather than “man for work”) and structuring

workplaces with subsidiarity that designs, equips and trusts employees to do their best work; and

􀁳 using resources wisely to create both profit and well-being, to produce sustainable wealth and to

distribute it justly (a just wage for employees, just prices for customers and suppliers, just taxes for the

community, and just returns for owners).

ACTING: Business leaders can put aspiration into practice when they pursue their vocation, motivated

by much more than financial success. When they integrate the gifts of the spiritual life, the virtues and

ethical social principles into their life and work, they may overcome the divided life, and receive the

grace to foster the integral development of all business stakeholders. The Church calls upon the business

leader to receive—humbly acknowledging what God has done for him or her —and to give—entering into

communion with others to make the world a better place. Practical wisdom informs his or her approach

to business and strengthens the business leader to respond to the world’s challenges not with fear or

cynicism, but with the virtues of faith, hope, and love. This document aims to encourage and inspire

leaders and other stakeholders in businesses to see the challenges and opportunities in their work; to judge

them according to ethical social principles, illumined for Christians by the Gospel; and to act as leaders

who serve God.

4 ~ THE VOCATION OF THE BUSINESS LEADER

INTRODUCTION

1. In the Gospel, Jesus tells us: “From everyone

who has been given much, much will be demanded; and

from the one who has been entrusted with much, much

more will be asked” (Lk 12:48). Businesspeople have been

given great resources and the Lord asks them to do great

things. This is your vocation. In this young century alone,

many businesses have already brought forth marvellous

innovations which have cured disease, brought people

closer together through technology and created prosperity in

countless ways. Unfortunately, this century has also brought

business scandals and serious economic disturbances, and an

erosion of trust in business organisations and in free-market

institutions generally. For Christian business leaders, this is

a time that calls for the witness of faith, the confidence of

hope, and the practice of love.

2. When businesses and markets as a whole are

functioning properly, and are regulated in an effective manner

by governments, they make an irreplaceable contribution to

the material and even the spiritual well-being of humankind.

When business activity is carried out justly and effectively,

customers receive goods and services at fair prices;

employees engage in good work and earn a livelihood for

themselves and their families; and investors earn a reasonable

return on their investment. Communities see their common

resources put to good use and the overall common good

is increased.

3. When managed well, businesses actively enhance

the dignity of employees and the development of virtues,

such as solidarity, practical wisdom, justice, discipline, and

many others. While the family is the first school of society,

businesses, like many other social institutions, continue

to educate people in virtue, especially those young men

and women who are emerging from their families and

their educational institutions and seeking their own places

in society. Those who come from socially disadvantaged

backgrounds and who are threatened with social isolation

may also find their places within companies. Furthermore,

businesses promote healthy interdependence among the

peoples of different nations by promoting interaction between

them in a way that is mutually beneficial. They may, thus,

become vehicles of cultural engagement and promoters of

peace and prosperity.

4. All of these potential benefits encourage the Church

to take a lively interest in business. Where businesses

succeed, people’s lives can be significantly improved; but

where they fail, great harm can result. A market economy

must be based on the pursuit of the common good in

freedom, but freedom without truth leads to disorder,

injustice and social fragmentation. Without guiding

principles and virtuous leadership, businesses can be places

in which expediency overcomes justice, power corrupts

wisdom, technical instruments are detached from human

dignity, and self-interest marginalises the common good.

5. We wish to speak specifically to Christian business

leaders, who have at the heart of their work the deep sense

of God’s calling to be collaborators in creation. Such leaders

play an important role in advancing and bringing to life

ethical social principles, drawing on the Catholic social

tradition where appropriate, in their day-to-day routines. We

also wish to speak to all business leaders of good will who

have an influence on the behaviours, values, and attitudes of

the people comprising their enterprises. From CEOs to heads

of teams to those with informal influence, business leaders

of all kinds play a critical role in shaping economic life and

creating the conditions for all people to develop integrally

through business institutions. Such institutions are broad and

diverse, including cooperatives, multinational corporations,

small entrepreneurial start-ups, employee-owned businesses,

family businesses, social businesses, partnerships, soleproprietorships,

joint ventures with government, for-profit/

non-profit collaborations. Some of these businesses are

publicly traded stock companies, while most are privately

held. Some have revenues larger than many countries, but

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most are small. Some are owned by thousands of investors,

others are owned by a single person or family. Some are

legally defined as for-profit entities, others, in new legal

constructs, are termed “social businesses” with a special

status. Business is a diverse institution and Pope Benedict

XVI has indeed welcomed a mixing of institutional forms.1

6. The vocation of the businessperson is a genuine

human and Christian calling. Its importance in the life of the

Church and in the world economy can hardly be overstated.

Business leaders are called to conceive of and develop goods

and services for customers and communities through a form

of market economy. For such economies to achieve their goal,

that is, the promotion of the common good, they should be

structured on ideas based on truth, fidelity to commitments,

freedom, and creativity.

7. Business leaders have a special role to play in the

unfolding of creation—they not only provide goods and

services and constantly improve them through innovating

and harnessing science and technology, but they also help

to shape organisations which will extend this work into

the future. Blessed John Paul II reminded us in Laborem

Exercens: “Man, created in the image of God, shares by his

work in the activity of the Creator and that, within the limits

of his own human capabilities, man in a sense continues to

develop that activity and perfects it as he advances further

and further in the discovery of the resources and values

contained in the whole of creation”.2

8. Building a productive organisation is a primary

way in which businesspeople can share in the unfolding

of the work of creation. When they realise that they are

participating in the work of the Creator through their

stewardship of productive organisations, they may begin

to realise the grandeur and awesome responsibility of their

vocation.

9. Businesses certainly have the potential to be a

force for great good in any society, and many do live up to

their moral and economic promise. Numerous obstacles,

however, may stand in the way of realising this potential.

Some of these obstacles are external to the business and its

leaders usually have a limited capacity to influence them,

such as the absence of the rule of law or international

regulations, corruption, destructive competition, crony

capitalism, excessive state intervention, or a culture hostile

to entrepreneurship in one or more of its forms. Others are

internal, such as treating employees as mere “resources”,

treating the business itself as no more than a commodity,

rejecting a proper role for government regulation of the

market place, making money out of products which are not

truly good, or services which do not truly serve, or exploiting

natural and human resources in a destructive way.

BEYOND CAREER

TO CALLING

6 ~ THE VOCATION OF THE BUSINESS LEADER

10. Chief among these obstacles at a personal level

is a divided life, or what Vatican II described as “the split

between the faith which many profess and their daily lives”.

The Second Vatican Council saw this split as “one of the

more serious errors of our age”.3 Dividing the demands of

one’s faith from one’s work in business is a fundamental error

which contributes to much of the damage done by businesses

in our world today, including overwork to the detriment of

family or spiritual life, an unhealthy attachment to power to

the detriment of one’s own good, and the abuse of economic

power in order to make even greater economic gains. In this

regard, the Church remains mindful of the words of Jesus

himself: “No one can be the slave of two masters. He will

either hate the first and love the second or be attached to

the first and despise the second. You cannot love both God

and money” (Mt 6:24). Business leaders who do not see

themselves serving others and God in their working lives

will fill the void of purpose with a less worthy substitute. The

divided life is not unified or integrated: it is fundamentally

disordered, and thus fails to live up to God’s call.

11. Fragmentation of this kind can ultimately lead to

idolatry, an all-too-common occupational hazard of business

life, one which threatens both individuals and organisations.

It means abandoning one’s call to relationship with a loving

Creator, as the Israelites did at the foot of Mount Sinai when

they crafted and worshipped a golden calf. The golden calf is

a symbol of misplaced devotion, born of a false idea of true

success.4 There are many surrogates for the golden calf in

modern life. They emerge when: “the sole criterion for action

in business is thought to be the maximization of profit”;5

when technology is pursued for its own sake; when seeking

personal wealth, or political influence fails to serve the

common good; or when utilitarian or consequential reasoning

becomes dominant. Each of these “golden calves” amounts

to a kind of fixation, usually accompanied by rationalization.

Each has the capacity to “en-trance” us as Pope Benedict

XVI says in his social encyclical Caritas in Veritate,6 and

business leaders must pay careful attention to avoid the lure

of idolatry.

12. The many pressures business leaders face may lead

them to forget the Gospel call in their daily professional

activities. It may seduce them to believe, falsely, that their

professional lives are incompatible with their spiritual lives.

It places excessive confidence in material resources and/

or worldly success. When this happens, business leaders

risk valuing status and fame over lasting accomplishment,

and consequently risk losing their good judgment. Business

leaders may be tempted, whether from self-centredness,

pride, greed or anxiety, to reduce the purpose of business

solely to maximising profit, or to growing market share or to

any other solely economic good. In this way, the good that a

market economy may do, for individuals and for society, can

be diminished or distorted.

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13. Well-integrated business leaders can respond to the

rigorous demands placed upon them with a servant attitude,

recalling Jesus who washed the feet of His disciples.

Leadership in this servant spirit is different from the

authoritarian exercise of power too often present in business

organisations. It distinguishes Christian executives and

the work environment which they seek to foster. In living

business responsibilities in such a manner, in developing

true servant leadership, they give freely of their expertise

and abilities. In figuratively washing the feet of their

collaborators, business leaders realise more fully their

noble calling.

14. An important part of the business leader’s vocation

is practising ethical social principles while conducting the

normal rhythms of the business world. This entails seeing

clearly the situation, judging with principles that foster

the integral development of people, and acting in a way

which implements these principles in light of one’s unique

circumstances and in a manner consistent with the teaching

of the Faith.7 The rest of this document is organised

accordingly: see, judge, act.

SEEING THE WORLD OF BUSINESS:

CHALLENGES AND OPPORTUNITIES

15. The business leader faces a world which is

characterised by a complicated mix of factors. To try to

understand them, we need to follow the guidance given in

the document Gaudium et Spes of Vatican II; that is, we

need to scrutinize “the signs of the times and of interpreting

them in the light of the Gospel”.8 Some of these factors

limit what leaders can do to realise the good by constricting

their behaviour and closing down avenues of creativity.

Other factors create new opportunities for managers and

entrepreneurs to serve the common good and the possibility

for new circles of solidarity to infuse our social, political,

and economic life. The world around us, therefore, presents a

complex interplay of light and dark, of good and evil, of truth

and falsehood, of opportunities and threats.

8 ~ THE VOCATION OF THE BUSINESS LEADER

16. Christian business leaders must be able to “see” this

world in a way which allows them to make judgements about

it, to build up its goodness and truth, to promote the common

good, and to confront evil and falsehood. The “judge” section

of this paper offers help in this kind of assessment. Here

the aim is to present a short summary of some key factors

affecting business activity today, indicating where possible

their good, bad, and context-dependent aspects from the

perspective of the business leader.

17. Among the many complex factors which influence

business locally and globally, there are four which stand

out as worthy of special mention, having fundamentally

changed the context of business over the last quartercentury.

The first three are closely related to each other:

(1) globalisation, (2) new communication technologies, and

(3) the financialisation of the economy. The fourth factor,

(4) cultural changes —and, in particular, the challenge of

individualism and accompanying moral systems of relativism

and utilitarianism—may arguably present the greatest

dangers to Christian business leaders. There are of course

many other factors which have a bearing on business today

(state regulation, the role of international authorities, unions,

environmental issues, work/family tensions, and more), all

of which deserve analysis, but in an effort to be succinct we

will only examine these four.

18. Globalisation: The emergence of a global economic

order has come to represent the most characteristic feature

of our age. The term “globalisation” identifies a worldwide

process of intensification of the movement of both outputs

and inputs, especially labour and capital, bringing with it

a increasing web of social interconnectedness. With the

end of the Cold War and the opening up of many emerging

markets, the marketplace for businesses around the world has

expanded enormously. This has created new opportunities and

new threats. Whole peoples who were previously excluded

from the world economic system can now participate in

and benefit from it. Greater efficiencies have made more

products and services affordable for more people. At the

same time, greater world output has been accompanied

by greater inequality in the distribution of income and

wealth, both within countries and between them. Regional

economic zones, with free movement of goods and even

single currencies, encourage trade and stimulate innovation.

They are not, however, always accompanied by equally free

possibilities for the movement of working people in the

search for employment. Especially where there is a single

currency, the resulting limitations that national or local

governments encounter when trying to promote an effective

economic policy, especially during a localised crisis, may

put whole political systems under strain. At the same time,

markets have gone from relatively culturally homogeneous

to highly diverse. This is positive in that it brings different

cultures into more communication with one another, but in

the presence of aggressive competition, and the effects of a

loss of diversity through the global marketing of standardised

products, the danger of cultural imperialism should be

carefully examined. Benedict XVI has summarised these

divergent forces by observing that, “as society becomes ever

more globalised, it makes us neighbours

but does not make us brothers”.9

19. Behind all these changes is the fundamental reality

that capital has acquired new freedom: no longer does it

have to account to the people in the countries where its

profits are made.10 It is as if economic power had acquired

an extraterritorial status. Companies are able to react to

profit opportunities quite independently of their national

authorities and in so doing they play a key role not only

in the organisation of the economy —but of society.

Thus globalisation is modifying the foundations of the

economy and the polity, reducing the degrees of freedom

of nation-states: the familiar nation-state’s politicaleconomic

instruments are tied to a well- defined territory,

whereas multinational companies can produce goods in one

country, pay taxes in another, and claim assistance and state

contributions in yet a third. Business has become much more

influential in this changed context and consequently carries

the potential for great good or bad.

20. Communication technology:11 The revolution in

communications technology brought by the Internet has

had significant impacts, both positive and negative, upon

business management. On the positive side, Internet-based

collaboration is developing new products and solutions to

age-old problems. Such products and solutions have reduced

the costs for people to connect globally. New business

models combine collaboration and competition in unique

ways to meet needs which were previously inadequately

served or completely unsatisfied. Consumer/ stakeholder

groups are empowered to apply pressure on global businesses

and raise the profile of poor practices in issues ranging

from respect for human rights to environmental protection

in poorer parts of the world. This activism reduces the cost

penalty born by those companies that have always aimed to

behave responsibly in these parts of the world.

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21. On the negative side, we now live in a world of

instant gratification and an overabundance of information.

In such a world, as is commonly noted, the urgent can drive

out the important. Every message becomes a priority when

instant communication insists on our attention. We seem to

have no time for well-studied and thoughtful decisions on

complex matters. Decisions—even important ones—are

increasingly made without adequate consideration and with

too little shared information. Faced with more difficulty in

preparing for and explaining decisions, leaders rely on their

experience. Thus, their personal values and beliefs become

even more critical in framing their decision-making.

22. Financialisation of the economy: The combination

of globalisation with its expansion of markets and earnings

and new communications technologies has brought to

great prominence the financial sector in business. The term

“financialisation” describes the shift in the capitalist economy

from production to finance. The revenue and profits of the

financial sector have become an increasingly large segment

of the world-wide economy. Its institutions, instruments and

motives are having a significant impact on the operations

and understanding of business. While the recent financial

crisis has brought about a wave of criticisms of the negative

effects of financialisation, the financial sector has also: given

millions of people easier access to credit in consumption

and production; sought to spread risk through derivative

instruments; created ways to leverage capital to make it more

productive; and more. The financial sector has also produced

social or ethical funds allowing investors to support or

avoid certain industries or certain companies, with the aim

of strengthening sustainable business systems. This sector

represents an important and fast-growing development that

is set to grow further after some promising results during the

financial crisis. Caritas in Veritate points out that this type

of investment should be the norm: “Efforts are needed—and

it is essential to say this—not only to create ‘ethical’ sectors

or segments of the economy or the world of finance, but to

ensure that the whole economy—the whole of finance—is

ethical, not merely by virtue of an external label, but by its

respect for requirements intrinsic to its very nature”.12

23. Despite these positive developments, financialisation

has contributed to a whole assortment of negative trends and

consequences. We will address only two—commoditisation

and short-termism. Financialisation has tended to completely

commoditise businesses, reducing the meaning of this human

enterprise to only a price. In particular, the financial sector

has contributed to this commoditising trend by equating the

purpose of business to shareholder wealth maximization.

Shareholder value has become virtually the sole metric by

which business leaders determine their performance and

their worth. In the current climate, the call to “maximise

shareholder wealth” remains dominant and is the leading

theory taught in many business schools. Along with this commoditisation

have come short-term mentalities under which

leaders are tempted to become fixated on the upside potential

of short-term success, and undervalue the downside risk of

excessive risk-taking and strategic failure. It is perhaps not

surprising that the opportunity to acquire enormous wealth

in relatively short timeframes provides a strong incentive for

dysfunctional behaviour. Pope Benedict XVI has noted these

dangers when he wrote: “Without doubt, one of the greatest

risks for businesses is that they are almost exclusively

answerable to their investors, thereby limiting their social

value…. [I]t is becoming increasingly rare for business

enterprises to be in the hands of a stable director who feels

responsible in the long term, not just the short term, for the

life and results of the company”.13

10 ~ THE VOCATION OF THE BUSINESS LEADER

24. Cultural changes: As already discussed, the

impact of new levels of contact between nations through

globalisation, and of individuals through technology, has

resulted in significant cultural change. For the Christian

business leader, two related key cultural changes have been

the turn to individualism in the West and higher levels of

family breakdown than in the past. Linked to a resurgence in

a strongly utilitarian view of economics and even of society,

whole populations are encouraged to focus on achieving

“what works for me”, independently of the effects on others,

with results which negatively impact family life. “Values” are

seen as relative, measured by their contribution to individual

preferences and business gains. Work becomes simply

a means to afford the pleasures of life that each person

chooses. Rights become much more important than duties;

sacrifice for a larger good is no longer considered. These

attitudes fuel the drive of top management to take a share

of the wealth created, for employees to foster an attitude of

entitlement, and for customers to foster a culture of instant

gratification.

25. Fortunately, new movements and programs have

been developed in an effort to take more seriously the

moral and spiritual life in relation to business. Faith and

work groups, spirituality of work programs, business ethics

training, social responsibility projects, are all helping

business leaders to manage their companies in the spirit of

St. Paul’s exhortation: “But test everything; hold fast what is

good” (1 Thes 5:21).14 Many of these groups and movements

are enabling business leaders to recognise their work as a

vocation and the role their businesses play in contributing to

the common good.

26. There is no doubt that globalisation, enhanced

communication, and financialisation can have positive

consequences for the human community. A healthy respect

for short-term financial performance can also be positive, if

it contributes to, rather than solely drives, decision-making.

All these trends, however, need to be guided by ethical

social principles, illumined for Christians by the Gospel,

and embedded in sound cultural institutions. Without such

a constant influence, societal trends risk being detrimental

to “integral human development”.15 This is where the social

teachings of the Church and our belief in God’s love can

offer an authentic perspective, enabling business leaders to

fulfil their Christian calling.

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MAKING JUDGMENTS:

THE IMPORTANCE OF ETHICAL SOCIAL PRINCIPLES

27. Dealing with the complex context of business

described in our last section requires good judgment on the

part of its leaders, judgments which are wise and rooted in

reality and in truth. The ability to make reasoned judgments,

however, must be nurtured in the moral and spiritual culture

from which business leaders come, namely their families,

religion, educational institutions, and the larger communities

to which they belong. For the Christian business leader, at the

heart of that culture is the Gospel of Jesus Christ.

HUMAN

DIGNITY

28. This Gospel is a message of love which is found

not primarily in a theory or an ethic, but in a relationship

with Christ.16 It is this relationship, this vocation to love,

which, if we allow it to, animates and strengthens the life

of every Christian. It has ethical and religious implications

for all Christians and for business leaders in particular.

These implications are identified in what the Church calls its

social tradition, a living dialogue between faith, reason, and

action. This tradition has grown through a complementary

relationship between authoritative teachers (Catholic social

teachings), insightful scholars (Catholic social thought),

and effective and principled practitioners (Catholic social

practice). Like all traditions, it is constantly developed,

purified, and readjusted as Christians, including business

leaders, seek discernment and excellence in their

professional lives.

29. An important part of this tradition for business

has been an articulation of ethical social principles at both

foundational and practical levels, and a vision of a business

as a community of persons. Together these provide guidance

for true business excellence, since they are founded on who

the human person is, and what human flourishing can be in

business, the wider community, and the world.

I. FOUNDATIONAL ETHICAL PRINCIPLES

FOR BUSINESS: HUMAN DIGNITY AND

THE COMMON GOOD

30. Human dignity: At the very foundation of the

Church’s social tradition stands the conviction that each

person, regardless of age, condition, or ability, is an image

of God and so endowed with an irreducible dignity, or value.

Each person is an end in him or herself, never merely an

instrument valued only for its utility—a who, not a what; a

someone, not a something.17 This dignity is possessed simply

by virtue of being human. It is never an achievement, nor a

gift from any human authority; nor can it be lost, forfeited,

or justly taken away. All human beings regardless of

individual properties and circumstances therefore enjoy this

God-given dignity.

31. Thanks to this human dignity, each person has the

right—indeed the obligation—to pursue his or her vocation

and to strive for personal fulfilment in communion with

others. In turn, this also entails that each of us has a duty to

avoid actions which impede the flourishing of others and, as

far as possible, a duty to promote that flourishing, for “we are

all really responsible for all”.18

32. More specifically, human beings demonstrate that

they bear the image of the Creator in their capacities to

reason and to choose freely as well as in their inclination

to share their lives with others (their social nature). Human

flourishing, therefore, always involves reasoning well,

choosing freely in accord with reason and living in society.

Indeed, it is only in community, that is, in communion with

others, that a person can genuinely develop in ability, virtue,

and holiness.

33. To be sure, because each person has a transcendent

destiny to share forever in the life of God, earthly flourishing

will never be complete, but this does not mean that it is

unimportant. On the contrary, not only is earthly flourishing

an important element of a good human life, but also the lack

of material resources, as well as their overabundance, are

often obstacles to, or distractions from, the pursuit of virtue

and holiness.

12 ~ THE VOCATION OF THE BUSINESS LEADER

34. Common good: The social nature of human beings,

reflecting the community of the Trinity, points to another

foundational principle, the importance of the common good.

The Second Vatican Council defined the common good in

the following way: “the sum total of social conditions which

allow people, either as groups or as individuals, to reach

their fulfilment more fully and more easily”.19 Common

goods are developed between human beings whenever they

act purposefully together towards a goal which they share.

So building a friendship, a family, or a business creates a

common good shared between friends, family members, and

all the various people involved in a business. Common goods

are possible because we are relational beings who do not only

have individual goals, and who do not only grow individually.

We also participate in truly shared and common projects that

generate shared goods from which all participants benefit.

The common good embraces and supports all the goods

needed to allow each human being and all human beings to

develop, individually and communally.

35. Businesses produce many of the important

conditions which contribute to the common good of the

larger society. Their products and services, the jobs they

provide, and the economic and social surplus they make

available to society, are foundational to the good life of a

nation and of humanity as a whole. Countries which do not

have enough business activity tend to lose their best trained

people to other countries because they cannot see a future for

themselves or their families in their present situations. Some

societies do not produce enough collective and public goods

to ensure human life in dignity. Businesses are therefore

essential to the common good of every society and to the

whole global order. They contribute best when their activities

are allowed to be oriented toward, and be fully respectful

of, the dignity of people as ends in themselves who are

intelligent, free, and social.

36. Truly prosperous businesses and markets depend

upon any number of contributions from the larger society.

From public goods such as the rule of law, property rights,

free and open competition, to the provision of public goods,

sound currencies and fiscal policies, to critical transportation

and communication infrastructures, businesses simply cannot

operate effectively outside the structures of a good society.

Where these public goods and elements of the common good

are absent or do not function properly, businesses suffer. And

it is not only upon sound government that business depends.

Even before the State, one needs a healthy moral-cultural

environment in which to educate the young, to develop them

in skill and virtue, and to prepare them for employment.

Benefiting from the resources society makes available,

business and commercial activities, in turn, conduct

themselves so as to respect and sustain the common good.

37. Businesses also support the well-being of

members of society through their other key functions.

At the very least, a good business carefully avoids any

actions which undermine, locally or globally, the common

good. More positively, these businesses actively seek ways

to serve genuine human needs within their competence

and thus advance the common good. In some cases they

actively promote more effective regulation on a national,

international, or branch level. For example, some destructive

business strategies, including corruption, exploitation of

employees or destruction of the natural environment, might

thereby lower short-term costs for themselves, while leaving

the much higher long-term costs to future generations of

the local society. If such strategies are legal, they create

competitive advantages for less morally conscious enterprises

at the expense of more conscientious competitors, who

act morally and thus incur the real, higher costs of such

undertakings. Such a “race to the bottom” usually cannot be

overcome by individual moral engagement alone; rather it

calls for a better institutional framework for all participants

in the market.

13

II. PRACTICAL ETHICAL PRINCIPLES FOR BUSINESS

38. Respect for human dignity and the common good

are foundational principles which should inform the way we

organise the labour and capital employed, and the processes

of innovation, in a market system. The deep and abiding

purpose of individual businesses and commercial systems

is to address real human needs, which is to say the relevant

needs of everyone who is served in some way by a business.

In particular, there are three interdependent activities which

businesses should take up:

development, and production of goods and services;

in sustainable ways.

39. The Church’s social tradition addresses these three

interdependent activities by providing practical principles to

help guide decision-makers in the good they may do. These

practical principles build on the foundational principles, and

aim to respect the multi-cultural, multi-faith situations which

are characteristic of business today. They also help clarify the

vocation of the Christian businessperson and the role of a true

business leader.

MEETING THE NEEDS OF THE WORLD THROUGH

GOODS AND SERVICES

40. Successful businesses identify and seek to address

genuine human needs at a level of excellence using a great deal

of innovation, creativity, and initiative. They produce what has

been produced before but often—as in the arenas of medicine,

communication, credit, food production, energy, and welfare

provision—they invent entirely new ways of meeting human

needs. And they incrementally improve their products and

services, which, where they are genuinely good, improve the

quality of people’s lives.

In contribution to the common good:20 As the Compendium of

the Social Doctrine of the Church puts it: “Businesses should

be characterised by their capacity to serve the common good of

society through the production of useful goods and services”.21

Business is inherently other-centred: a business joins together

people’s gifts, talents, energies, and skills to serve the needs of

others which, in turn, supports the development of the people

who do the work. The tasks they perform in common bring

forth the goods and services needed by a healthy community.

“The business leader is not a speculator, but essentially an

innovator. The speculator makes it his goal to maximise profit;

for him, business is merely a means to an end, and that end

is profit. For the speculator, building roads and establishing

hospitals or schools is not the goal, but merely a means to the

goal of maximum profit. It should be immediately clear that the

speculator is not the model of business leader which the Church

holds up as an agent and builder of the common good”.22

Rather, the Christian business leader serves the common good

by creating goods which are truly good and services which

truly serve.

WORLD NEEDS LD

14 ~ THE VOCATION OF THE BUSINESS LEADER

41. The goods and services which businesses produce

should meet authentic human needs, which include not only

those things which have clear social value—such as lifesaving

medical devices, microfinance, education, social investment,

fair trade products, health care or affordable housing—but also

anything which genuinely contributes to human development

and fulfilment, ranging from simple products, such as bolts,

tables and fabrics, to complex systems such as waste removal,

roads and transportation.

42. In 1931, Pope Pius XI wrote in his encyclical letter,

Quadragesimo Anno, of the importance of businesses “producing

really useful goods” for others.23 The good entrepreneur “gives

first thought to service and second thought to gain, who [. . .]

employs workingmen for the creation of goods of true worth;

who does not wrong them by demanding that they take part in the

creation of futilities, or even harmful and evil things; who offers

to the consumer nothing but useful goods and services rather

than, taking advantage of the latter’s inexperience or weakness,

betrays him into spending his money for things he does not

need, or that are not only useless but even injurious to him”.24

Needs ought to be contrasted with mere wants, which might be

characterised as satisfying desires which do not contribute to

human well-being. In extreme cases, meeting such desires may

even be detrimental to human well-being as, for example, in the

sale of non-therapeutic drugs, pornography, gambling, violent

video games, and other harmful products. This preoccupation

with wants, often called “consumerism,” severs production

and consumption from the common good and impedes the

development of the person.25 Goods which are truly good serve

the needs of consumers in a hierarchical order; the need for

nutritious goods, for example, clearly outweighs the wants of

gambling entertainment. This is an objective order, which is why

the production of goods and services must abide by truth instead

of mere utility.

43. In solidarity with the poor: The production of

goods and services has “a progressively expanding chain of

solidarity”, which raises several critical issues and opportunities

for the business community.26 One is the importance of

identifying, in a spirit of solidarity, the real needs of the poor

and the vulnerable, including people with special needs, which

are often overlooked by other businesses in a marketplace

driven by short-term profit.27 The Christian business

leader is alert for opportunities to serve these otherwise

underserved populations and sees this not only as a proper

social responsibility but also as a great business opportunity.

Developments in the field of the “bottom of the pyramid”

products and services—such as microenterprises, microcredit,

social enterprises, and social investment funds—have played

an important role in addressing the needs of the poor. These

innovations will not only help lift people from extreme poverty

but could spark their own creativity and entrepreneurship and

contribute to launching a dynamic of development.28

15

dimension, not in the objective one”.31 When we regard work

from that perspective, we should find a joint commitment

from both the employer and the employee to elevate work to

that splendid vision. It is the unity of sound business practice

and ethics.

46. Recognising the subjective dimension of work

acknowledges its dignity and importance. It helps us to

see that “work is ‘for man’ and not man ‘for work’”.32

Employees are not mere “human resources” or “human

capital”. Consequently, work must be designed for the

capacities and qualities of human beings, and so we

must not simply require that people adapt to their work

as if they were machines. Good work gives scope for the

intelligence and freedom of workers, its context promotes

social relationships and real collaboration, and it does not

damage the health and physical well-being of the worker.

This requires from leaders the ability to develop the right

person in the right job and the freedom and responsibility to

do just that. Good work is directed toward satisfying genuine

human needs so that the worker, while providing for himself

and his family, also serves the flourishing of others. Good

work must be sufficiently well-organised and managed to

be productive so that the worker can indeed earn his living.

Moreover, reward structures should make sure that those

workers who do engage their labour in a sincere way also

receive the necessary esteem and compensation from their

companies. The encyclical Mater et Magistra is perfectly

clear on this point: “if the whole structure and organisation

of an economic system is such as to compromise human

dignity, to lessen a man’s sense of responsibility or rob him

of opportunity for exercising personal initiative, then such

a system, We maintain, is altogether unjust—no matter how

much wealth it produces, or how justly and equitably such

wealth is distributed”.33

ORGANISING GOOD AND PRODUCTIVE WORK

44. Businesses create goods and services and organise

the work people do together. Successful businesses design

work which is good and effective, efficient and engaging,

autonomous and collaborative. The way human work is

designed and managed has a significant impact on whether

an organisation can compete in the marketplace and whether

people will flourish through their work. Blessed John Paul

II explained that “whereas at one time the decisive factor

of production was the land, and later capital— understood

as a total complex of the instruments of production—today

the decisive factor is increasingly man himself, that is, his

knowledge, especially his scientific knowledge, his capacity

for interrelated and compact organisation, as well as his

ability to perceive the needs of others and to satisfy them”.29

Within increasing globalisation and a rapidly changing

marketplace, the vibrant organisation of work assures an

organisation’s agility, responsiveness, and dynamism. This

includes sensible regulation, which ensures that economic

relations and mentalities can develop in a sustainable way,

and that virtuous business can effectively profit and excel

through its achievements.

45. Foster dignified work: “It is a scandal,” Pope Pius

XI wrote in 1931, “when dead matter comes forth from

the factory ennobled, while men there are corrupted and

degraded”.30 The grandeur of one’s work not only leads to

improved products and services, but develops the worker

himself. The Catholic social tradition has been particularly

outspoken about the nature of work and how it affects

the person. Blessed John Paul II spoke of “the subjective

dimension of work”, distinguishing it from its “objective

dimension”. He set forth a beautiful vision, indicating that

when people work, they do not simply make more, but they

become more. The changes brought about by work cannot be

fully accounted for by its objective dimension. The worker,

the subject of work, is also greatly affected by his or her own

work. Whether we think about the executive, the farmer,

the nurse, the janitor, the engineer, or the tradesman, work

changes both the world (objective dimension) and the worker

(subjective dimension). Because work changes the person, it

can enhance or suppress that person’s dignity; it can allow a

person to develop or to be damaged. Thus “the sources of the

dignity of work are to be sought primarily in the subjective

16 ~ THE VOCATION OF THE BUSINESS LEADER

Clearly define the realm of autonomy and decision

rights to be made at every level in the company,

leaving these as wide as possible. Limits should be

set such that decision rights do not exceed a person

or group’s ability to access the information required

to make the decision, and so the consequences

of the decisions would not overstep their realm

of responsibility.

have the right tools, training, and experience to

carry out their tasks.

􀁳􀀀􀀡􀁃􀁃􀁅􀁐􀁔􀀀􀁔􀁈􀁁􀁔􀀀􀁔􀁈􀁅􀀀􀁐􀁅􀁒􀁓􀁏􀁎􀁓􀀀􀁔􀁏􀀀􀁗􀁈􀁏􀁍􀀀􀁔􀁁􀁓􀁋􀁓􀀀􀁁􀁎􀁄􀀀

responsibilities have been given will make their

decisions in freedom and, thereby in full trust,

the risks of their decisions. Subsidiary business

structures therefore should nurture mutual respect

and responsibility and allow employees to attribute

good results to their sincere engagement.

This last point, taking on the risk of the decisions, is

what makes subsidiarity different from delegation.

One who delegates confers power, but can take it

back at any time. In such a situation, employees

are not called to the same level of excellence and

participation as in a situation governed by the

principle of subsidiarity, and are less likely to grow

and accept their full responsibility.

47. Create subsidiary structures: The principle of

subsidiarity is rooted in the conviction that, as images of

God, the flourishing of human beings entails the best use

of their intelligence and freedom. Human dignity is never

respected by unnecessarily constraining or suppressing

that intelligence and freedom. The principle of subsidiarity

recognises that in human societies, smaller communities

exist within larger ones. For example, a family, as a

community, is part of a village or a city, which in turn is part

of a county, a state or province, then a nation, and so on. The

principle insists that the freedom and input of those closest

to the effects to be felt should not be arbitrarily disregarded.

As Blessed John Paul II pointed out “a community of a

higher order should not interfere in the internal life of

a community of a lower order, depriving the latter of its

functions, but rather should support it in case of need and

help to coordinate its activity with the activities of the rest

of society, always with a view to the common good”.34

48. The principle of subsidiarity applies to the

structures of the State as well as business organisations. We

develop in our work best when we use our intelligence and

freedom to achieve shared goals and to create and sustain

right relationships with one another and with those served

by the organisation. In other words, the more participatory

the workplace, the more likely each worker will be to

develop. Employees should have a voice in their work,

especially in the day-to-day work. This fosters initiative,

innovation, creativity, and a sense of shared responsibility.

49. The principle of subsidiarity holds great insight for

business leaders. It encourages leaders to use their power

at the service of their collaborators, prompting them to

question whether their authority serves the development

of all their employees. Specifically, subsidiarity provides

business leaders with three practical steps:

17

50. Under the principle of subsidiarity,

employees on a lower level who are trusted, trained,

experienced, know precisely the extent of their

responsibilities, and are free to make decisions, can

fully use their freedom and intelligence, and thus

are enabled to develop as people; they are indeed

“co-entrepreneurs”. For business leaders on every

level, from team leader up to chief executive, this

is very demanding but rewarding. Working under

the principle of subsidiarity calls for restraint, and a

humble acceptance of the role of a servant leader.

CREATING SUSTAINABLE WEALTH AND

DISTRIBUTING IT JUSTLY

51. Entrepreneurs exercise their creativity to organise

the talents and energies of labour and to assemble capital and

other resources from the earth’s abundance to produce goods

and services. When this is done effectively, well paying jobs

are created, profit is realised, the resulting wealth is shared

with investors, and everyone involved excels. The Church

acknowledges the legitimate role of profit as an indicator

that a business is functioning well. When a firm makes a

profit, it generally means that the factors of production have

been properly employed and corresponding human needs

have been duly satisfied.35 A profitable business, by creating

wealth and promoting prosperity, helps individuals excel and

realise the common good of a society. Yet creating wealth is

not restricted to financial profit alone. The very etymology of

the word “wealth” reveals the broader notion of “well-being”:

the physical, mental, psychological, moral, and spiritual

well-being of others. The economic value of wealth is

inextricably linked to this wider notion of well-being.

SIX PRACTICAL PRINCIPLES FOR BUSINESS

The principles of respect for human dignity and pursuit of the common good are the foundations

of the Church’s social teaching. Joined with the six practical principles of business, they can offer more

Meeting the Needs of the World through the Creation and Development of Goods and Services

􀁉􀁗􀀃􀁛􀁌􀁍􀁇􀁌􀀃􀁘􀁖􀁙􀁐􀁝􀀃􀁗􀁉􀁖􀁚􀁉􀀃contribute to

the common good.

2. Businesses maintain

solidarity􀀃􀁛􀁍􀁘􀁌􀀃􀁘􀁌􀁉􀀃􀁔􀁓􀁓􀁖􀀃􀁆􀁝􀀃􀁆􀁉􀁍􀁒􀁋􀀃􀁅􀁐􀁉􀁖􀁘􀀃􀁊􀁓􀁖􀀃􀁓􀁔􀁔􀁓􀁖􀁘􀁙􀁒􀁍􀁘􀁍􀁉􀁗􀀃􀁘􀁓􀀃􀁗􀁉􀁖􀁚􀁉􀀃􀁓􀁘􀁌􀁉􀁖􀁛􀁍􀁗􀁉􀀃􀁈􀁉􀁔􀁖􀁍􀁚􀁉􀁈􀀃􀁅􀁒􀁈􀀃􀀃

􀀃 􀁙􀁒􀁈􀁉􀁖􀁗􀁉􀁖􀁚􀁉􀁈􀀃􀁔􀁓􀁔􀁙􀁐􀁅􀁘􀁍􀁓􀁒􀁗􀀃􀁅􀁒􀁈􀀃􀁔􀁉􀁓􀁔􀁐􀁉􀀃􀁍􀁒􀀃􀁒􀁉􀁉􀁈􀀒

Organising Good and Productive Work

3. Businesses make a contribution to the community by fostering the special dignity of human work.

􀀘􀀒􀀃􀀦􀁙􀁗􀁍􀁒􀁉􀁗􀁗􀁉􀁗􀀃􀁔􀁖􀁓􀁚􀁍􀁈􀁉􀀐􀀃􀁘􀁌􀁖􀁓􀁙􀁋􀁌􀀃subsidiarity, opportunities for employees to exercise appropriate authority as they

contribute to the mission of the organisation.

Creating Sustainable Wealth and Distributing it Justly

5. Businesses model stewardship􀀃􀁓􀁊􀀃􀁘􀁌􀁉􀀃􀁖􀁉􀁗􀁓􀁙􀁖􀁇􀁉􀁗􀂰􀁛􀁌􀁉􀁘􀁌􀁉􀁖􀀃􀁇􀁅􀁔􀁍􀁘􀁅􀁐􀀐􀀃􀁌􀁙􀁑􀁅􀁒􀀐􀀃􀁓􀁖􀀃􀁉􀁒􀁚􀁍􀁖􀁓􀁒􀁑􀁉􀁒􀁘􀁅􀁐􀂰􀁘􀁌􀁉􀁝􀀃􀁌􀁅􀁚􀁉􀀃􀁖􀁉􀁇􀁉􀁍􀁚􀁉􀁈􀀒

6. Businesses are just􀀃􀁍􀁒􀀃􀁘􀁌􀁉􀀃􀁅􀁐􀁐􀁓􀁇􀁅􀁘􀁍􀁓􀁒􀀃􀁓􀁊􀀃􀁖􀁉􀁗􀁓􀁙􀁖􀁇􀁉􀁗􀀃􀁘􀁓􀀃􀁅􀁐􀁐􀀃􀁗􀁘􀁅􀁏􀁉􀁌􀁓􀁐􀁈􀁉􀁖􀁗􀀞􀀃􀁉􀁑􀁔􀁐􀁓􀁝􀁉􀁉􀁗􀀐􀀃􀁇􀁙􀁗􀁘􀁓􀁑􀁉􀁖􀁗􀀐􀀃􀁍􀁒􀁚􀁉􀁗􀁘􀁓􀁖􀁗􀀐􀀃suppliers,

and the community.

18 ~ THE VOCATION OF THE BUSINESS LEADER

52. Stewarding resources: Scripture teaches that good

stewards are creative and productive with the resources placed in

their care.36 They do not merely take from creation’s abundance;

instead they use their talents and skills to produce more from

what has been given to them. One manifestation of this within

the business context is financial profit—the surplus of retained

earnings over expenses which enables an organisation’s

sustainability. The best business leaders use resources effectively

and maintain reasonable levels of revenue, margin, market share,

productivity, and efficiency, in order to ensure the viability of

the organisation. If financial wealth is not created, it cannot be

distributed and organisations cannot be sustained.

53. While profitability is an indicator of organisational

health, it is neither the only one, nor the most important by which

business should be judged.37 Profit is necessary to sustain a

business; however, “once profit becomes the exclusive focus, if

it is produced by improper means and without the common good

as its end, it risks destroying prosperity and creating poverty”.38

Profit is like food. An organism must eat, but that is not the

overriding purpose of its existence. Profit is a good servant, but it

makes a poor master.

54. While financial resources are important, so too is

stewardship of the environment, both physical and cultural.

As Pope Benedict XVI wrote, “The environment is God’s

gift to everyone, and in our use of it we have a responsibility

towards the poor, towards future generations and towards

humanity as a whole”.39 Creation is endowed with an order

which we discover but do not create. Living creatures and the

natural world may reasonably be employed to serve genuine

human needs. As collaborators with God in the unfolding of

creation, however, we have a duty to respect and not to attack

the world around us. We are free to cultivate this world,

but not to devastate it. Or as the early chapters of Genesis

suggest, we are called to exercise a careful dominion over the

world, to cultivate it and make it fruitful, but we do not have

license to exploit it as we please.

55. Distribute justly: As creators of wealth and

prosperity, businesses and their leaders must find ways

to make a just distribution of this wealth to employees

(following the principle of the right to a just wage),

customers (just prices), owners (just returns), suppliers

(just prices), and the community (just tax rates).40

56. If one accepts that God’s creation is intended for

everyone—rich and poor, powerful and weak, now and in the

future—then it follows that all resources are conferred on

humankind with a “social mortgage”.41 The Catholic social

tradition understands this obligation as applying to property

as well as capital. While property and capital should as a

rule be privately held, the right to private property should

be “subordinated to the right to common use, to the fact

that goods are meant for everyone”.42 This principle urges

business leaders to consider the distributive effect of the way

they set prices, allocate wages, share ownership, distribute

dividends, manage payables, and so on. Their decisions

should aim not at an equal but at a just distribution of wealth,

which meets people’s needs, rewards their contributions and

risks, and preserves and promotes the organisation’s financial

health. Denying people legitimate access to the fruits of

the earth, especially the means to sustain life, amounts to

a negation of God’s command to humanity to discover,

cultivate, and use its gifts.

19

III. BUSINESS AS A COMMUNITY OF PERSONS

57. These six principles point us to the purpose of

business, which Blessed John Paul II states “is not simply

to make a profit, but is to be found in its very existence as a

community of persons who in various ways are endeavouring

to satisfy their basic needs, and who form a particular group

at the service of the whole of society”.43 While the phrase

“community of persons” is not common in business literature

today, it actually best expresses the full realisation of what

a company and corporation can be. The etymology of the

words “company” and “companions”—cum (with), and panis

(bread) suggests “breaking bread together”. The etymology

of the word “corporation”—the Latin corpus (body) suggests

a group of people “united in one body”.

58. When we consider a business organisation as a

community of persons, it becomes clear that the bonds which

hold us in common are not merely legal contracts or mutual

self-interests, but commitments to real goods, shared with

others to serve the world. It is dangerous and misinformed

simply to consider business as a “society of shares”,

where self-interests, contracts, utility, and financial profit

maximisation exhaust its meaning. An inherent characteristic

of work is that “it first and foremost unites people. Therein

lies its social power: the power to build a community”.45

This understanding helps avoid the spiritual poverty which

often arises in market economies from a lack of human

relationships within and around a business.46

59. Building a company as a community of persons

based on the six principles above is no easy task. Large

multinational corporations in particular can find it

challenging to create practices and policies to foster a

community of persons among its members. Yet leaders in

large or small firms are greatly helped by the practice of

personal virtue, those life-enhancing habits and qualities of

character essential to any profession. Two very important

virtues for the business professional, which we discuss in

further detail in the next section, are practical wisdom and

justice. There is, in practice, no substitute for sound judgment

(practical wisdom) and right relationships (justice). The

six principles above do not provide all that is needed for

 “WITNESS OF ACTIONS”:

TAKING ASPIRATION INTO PRACTICE

60. “Today more than ever,” Blessed John Paul II wrote,

“the Church is aware that her social message will gain

credibility more immediately from the witness of actions

than as a result of its internal logic and consistency”.47 These

witnesses of action, the great majority of whom are among

the lay faithful, are not “solely passive beneficiaries but

are the protagonists of the Church’s social doctrine at the

vital moment of its implementation. They are also valuable

collaborators of the pastors in its formulation, thanks to

the experience they have acquired in the field and to their

own specific skills”.48

good judgment in response to the challenges of daily work.

They do not provide blueprints or technical solutions, nor

are they meant to do so. Ethical social principles, illumined

for Christians by the Gospel, provide direction for good

businesses, but the navigation falls to the seasoned and

intelligent judgments of virtuous business leaders who

can wisely manage the complexity and tensions arising in

particular cases.

61. Christian business leaders are men and women of

action who have demonstrated an authentic entrepreneurial

spirit, one which recognises the God-given responsibility to

accept generously and faithfully the vocation of business.

These leaders are motivated by much more than financial

success, enlightened self-interest, or an abstract social

contract as often prescribed by economic literature and

management textbooks. Faith enables Christian business

leaders to see a much larger world, a world in which God is

at work, and where their individual interests and desires are

not the sole driving force.

62. Business leaders are supported and guided by the

Church as well as by Christian business organisations to live

out the Gospel in the world.49 Without these practitioners and

the organisations which support them, the Catholic social

tradition would become merely inanimate words rather than a

lived reality. As St. James tells us, faith without works is dead

(Jas 2:17).

63. Unfortunately, there are people of faith within

the world of business who have failed to witness to and

be inspired by their faith and moral convictions. We have

witnessed many scandals involving leaders who have

misused their positions of authority and leadership. They

have succumbed to sins of pride, greed, lust, and other deadly

vices. It is not only these major cases which are so painful to

witness; what is also tragic is that there are Christians who,

while not committing illegal or scandalous activities, have

accommodated themselves to the world, living as if God

does not exist. They not only live in the world, but they have

become of the world. When Christian business leaders fail

to live the Gospel in their organisations, their lives “conceal

rather than reveal the authentic face of God and religion”.50

20 ~ THE VOCATION OF THE BUSINESS LEADER

64. Faith has social implications; it is not merely a

private reality. The Church’s social doctrine is “an essential

part of the Christian message, since this doctrine points

out the direct consequences of that message in the life of

society and situates daily work and struggles for justice in

the context of bearing witness to Christ the saviour”.51 The

social principles of the Church call upon business leaders to

act, and because of the current challenging environment, how

they act is more important than ever.

65. Pope Benedict XVI’s Caritas in Veritate provides a

vision for action. He explains that charity—“love received

and given”—is at the heart of the social teachings of the

Church.52 Charity “is the principal driving force behind

the authentic development of every person and of all

humanity”.53 So when we speak of business leaders acting,

this implies both “receiving” and “giving”.

66. Receiving: The first act of the Christian business

leader, as of all Christians, is to receive; more specifically,

to receive what God has done for him or her. This act

of receptivity, particularly for business leaders can be

particularly difficult. As a group, business leaders tend to be

more active than receptive, especially now in a globalised

economy, under the effects of sophisticated communications

technologies and the financialisation of business. Yet without

receptivity in their lives, business leaders can be tempted by

a quasi-Nietzschean “superman” complex. The temptation for

some is to regard themselves as determining and creating their

own principles, not as receiving them.54 Business leaders

may only see themselves as creative, innovative, active, and

constructive, but if they neglect the dimension of receiving,

they distort their place within the world and overestimate

their own achievements and work.

67. Pope Benedict XVI, prior to his papacy, wrote that

the person “comes in the profoundest sense to himself not

through what he does but through what he accepts”,55 not

through what he achieves but through what he receives.

Indeed, human accomplishment taken alone leads only to

partial fulfilment; one must also know the power and grace of

receptivity. This refusal to receive is found in our origins, in

the story of the fall of Adam and Eve, when God commanded

them not to eat “of the tree of the knowledge of good and

evil” (Gen 2:17). The moral law is given by God, and we

can only receive it.56 The social principles of the Church

explained above are the Church’s reflection on this moral law

for business. When business leaders receive their vocation,

they are also open to receiving principles which foster the

integral development of those affected by the business.

68. When the gifts of the spiritual life are embraced and

integrated into the active life, they provide the grace needed

to overcome the divided life and to humanise us, especially in

our work. The first act to which the Church calls the Christian

business leader is to receive the sacraments, to accept the

Scriptures, to honour the Sabbath, to pray, to participate in

silence and in other disciplines of the spiritual life. These

are not optional actions for a Christian, not mere private acts

separated and disconnected from business.

69. The Sabbath, for example, is not simply a

break from work. Perhaps paradoxically, it is only in our

detachment from work that we see its deepest meaning.

Pope Benedict XVI explains this connection by stating that

“the biblical teaching on work finds its coronation in the

commandment to rest”.57 To rest in God places our work in

a new context—the context of the continuous unfolding of

God’s abundant gift of creation. Sacramental worship is not

an escape from the world of business—it gives us the space

21

70. The divine dimension in our daily lives can be

hidden and repressed, especially in a globalised, highly

technological, and financially driven economy, and in

situations in which the Church fails to preach and live

its social message. This is why Blessed John Paul II asks

business leaders and employees to develop a spirituality

of work, enabling them to see their role in God’s creative

and redemptive purpose, and giving them the strength and

virtue to live out His call.59 Without a deep well of prayer

and reflection, it is hard to see, for example, how business

leaders can resist the negative dimensions of information

technology, driving speed and efficiency at the expense

of thoughtful reflection, patience, justice, and practical

wisdom. Information technologies encourage us towards

instantaneous decisions; thus they can create their own logic

which undermines the application of the social principles

of the Church, unless they are used in an ordered way by

contemplative practitioners.

71. Giving: The second act to which the Church calls

the business leader is giving in a way which responds to

what has been received. This giving is never merely the legal

minimum; it must be an authentic entry into communion with

others to make the world a better place. The self-gift of the

person inquires not “how far it must go, but how far it may

go”.60 Giving moves business leaders to profound questions

about their vocation: How does receptivity to God’s love

animate the relationships of the various stakeholders of a

business? What kind of business policies and practices will

foster the integral development of people?

22 ~ THE VOCATION OF THE BUSINESS LEADER

72. We have observed business leaders who give

themselves through the goods and services they create and

provide, as they organise good and productive work, and as

they create sustainable wealth and distribute it justly. The

social principles of the Church help orient the institution of

business toward a set of behaviours which foster the integral

development of people. This entails addressing the demands

of the organisation with practices and policies which

promote: personal responsibility, innovation, fair pricing, just

compensation, humane job design, responsible environmental

practices, social and socially responsible (or ethical)

investment, and a host of other issues such as hiring, firing,

board governance, employee training, and supplier relations.

73. In addition to these internal opportunities, business

leaders (alongside governments and non-governmental

organisations) influence larger issues, such as international

regulations, anti- corruption practices, transparency, taxation

policies, and environmental and labour standards. They should

use this influence, individually and collectively, to promote

human dignity and the common good and not merely the

narrow interest of any particular stakeholder.

to see more deeply into the reality of the world and

to contemplate God’s work. God’s revelation, which can

only be received and not achieved, discloses that His Spirit

pervades materiality, that grace perfects nature, and that

worship makes work holy. This is why the Eucharist is the

most profound expression of the Sabbath. It is where we

see most deeply and most profoundly “the work of human

hands” in cooperation with the salvific work of God: in

human work, elevated by divine work, the bread and the

wine are transformed into the Real Presence, a presence

which has the power to redeem the world.58

74. It is not the place of the Church to prescribe

in detail the actions of business leaders. Prescription is

the work of practitioners, and is largely carried out by

lay people. The Church’s magisterium does not have

technical solutions to offer or models to present; yet, the

Church teaches that “there can be no genuine solution of

the ‘social question’ apart from the Gospel”.61 The Pope

and the bishops, the official teachers within the Church,

preach its social doctrine to business leaders not to impose

a burden upon them, but to reveal to them the spiritual

importance of their actions and the social significance of

business as an institution. As Pope Benedict XVI says in

Caritas in Veritate: “Man’s earthly activity, when inspired

and sustained by charity, contributes to the building of the

universal city of God, which is the goal of the history of

the human family”.62 When the Gospel informs the “new

things” which the business leader faces in our increasingly

global, technological, and financial economy, it sees them

not simply in their technical or market dimensions, but in

their impact on the integral development of the person.

75. This is why an important part of the vocation

of Christian business leaders is the practice of virtues,

especially the virtues of wisdom and justice. Wise business

leaders act virtuously in their practical affairs, cultivating

wisdom in concrete practices and policies, not just in

abstract mission statements. This is what makes it practical

wisdom: institutionalising effective and just practices which

foster right relationships with stakeholders, creating policies

which put the social principles of the Church into practice

in creative ways which humanise the organisation.

76. When business leaders face particular problems

which need specific solutions, their actions are informed by

“a prudential evaluation of each situation”.63 This prudential

judgment is not only a market-based or technical assessment.

Prudence has often been reduced to the clever actions of

leaders that advance their own private interests. This is

not the virtue of prudence, but a vice separated from the

requirements of justice. True prudence informs the mind

of the business leader by asking the right questions and

discerning the best courses of action for building good and

just companies which can contribute to the common good.

77. Developing a prudential mind entails recognising

the available resources of the organisation and understanding

its unique circumstances. Practical wisdom requires that

the ought of ethical social principles be translated into the

realistic and possible of a concrete situation (given available

means and resources). Practically wise teaching regarding

a living wage, for example, always implies a wage which

is sustainable for an enterprise. If, however, a living wage

is not immediately sustainable for a business, virtuous

23

businesspeople do not stop there and simply defer to market

forces. They rethink how they are doing business and how

they can change their situation creatively so as to be in right

relationships with their employees. This could mean changes

at the level of work organisation or job design; it could

mean moving into different product markets, or rethinking

pay differentials. If it is really not possible for a company

to reach a just wage after having made such efforts, it

then becomes the role of indirect employers such as

the state, unions, and other actors to supplement the

company’s efforts.64

78. As important as indirect employers are within

the economy, they must never absorb the responsibility of

the direct employer. Companies must not delegate their

responsibility completely, for example, to the law or to

a contract. As a direct employer, the virtues of practical

wisdom and justice help the business leader to see the

increasing importance of business’ social responsibility in

a globalised economy. At this time in our history, as Pope

Benedict XVI explains, there is “a growing conviction

that business management cannot concern itself only

with the interests of the proprietors, but must also assume

responsibility for all the other stakeholders who contribute

to the life of the business: the workers, the clients, the

suppliers of various elements of production, the community

of reference”.65 This growing conviction has produced a

significant amount of theory and practice in business ethics

and corporate social responsibility. In many countries we

see that subsidiary processes of “self-regulation” are taking

place in the context of business associations and branch

federations on a regional, national, or international level.

Many regulations for protecting customers, employees or

the environment are effectively grounded in the business

sector itself, even if they may also occasionally need to be

reinforced by government regulation. The practical wisdom

of entrepreneurs already plays an important role here, not

least to show that the Catholic social tradition has much to

learn from these fields of thought and action—and much to

offer them.

79. When business ethics and corporate social

responsibility are invoked to do what is contradictory to the

Church’s social doctrine, they have disconnected us from

a proper recognition that we are made “in the image of

God” (Gen 1:27), and they lead us to fail to appreciate “the

inviolable dignity of the human person and the transcendent

value of natural moral norms. When business ethics

prescinds from these two pillars, it inevitably risks losing its

distinctive nature and it falls prey to forms of exploitation”.66

When not grounded in the deep soil of human culture, the

otherwise helpful role for business ethics and corporate social

responsibility will instead be prone to being instrumentalised,

and thus will ultimately fail to promote integral human

development within business.

80. Giving and receiving express the complementarity

of the active and contemplative life. These two fundamental

dimensions of our lives call not principally for balancing, but

for a profound integration born of the realization that we need

God and that God has done great things for us. In return God

asks us to be His hands and feet, to continue His creation and

make it better for others. For the business leader, this entails

creating goods which are truly good and services which truly

serve; organising work where employees develop their gifts

and talents; and creating sustainable wealth so that it can be

distributed justly (see the Appendix for “An Examination of

Conscience for the Business Leader”, which reflects on these

three objectives in day-to-day life).

24 ~ THE VOCATION OF THE BUSINESS LEADER

83. To live out their vocation as faithful stewards

to their calling, businesspeople need to be formed in a

religious culture which shows them the possibilities and

promise of the good they can do and which they ought to

do —the good which is distinctively theirs. Family, Church

and school are critical institutions in this formation. Like

all people, Christian business leaders come into the world,

not through a contract or a market exchange but through a

gift. No-one is born into a corporation, but into a family,

baptised in a church, educated in schools, and welcomed

into a community.

84. One critical part of this formation is university

education, where future business leaders are often first

introduced to the experiences, skills, principles, and purposes

of business. With close to 1,800 institutions of higher

learning world-wide, and approximately 800 of these with

business programs, the Church has invested herself in the

formation of future business leaders. Some of these programs

rank among the best in the world. This education seeks the

unity of knowledge and a rich dialogue between faith and

reason, which provides the resources to meet the modern

challenges found in business and the wider culture.67 Catholic

business education has achieved a lot, but has ever new

challenges to address.

85. An education in business, like every professional

education, does not merely constitute training in specific

skills or theories. Faithful to its own tradition, Catholic higher

education cannot fail to be a formation in the moral teaching

and social principles of the Church and the dimensions of

prudence and justice proper to business. A proper business

education includes all appropriate theoretical material,

training in every relevant skill and a thorough treatment of

the moral teaching and social principles of the Church which

must animate professional practice. Exaggerated emphasis in

one of these areas cannot compensate for the neglect

of another.

CONCLUSION

81. In concluding this reflection, we may acknowledge

that the challenges confronting business and the larger

culture are substantial. Business leaders may be tempted by

self-doubt about their personal ability to integrate the Gospel

within their daily work. Weighed down by the challenges

which often confront them, business leaders may wonder

whether the Church’s social tradition can offer guidance in

their professional lives.

82. Business leaders need to be open to receiving

support and correction from fellow members of the living

Church, responding to their doubts and hesitations not with

fear or cynicism, but with the virtues coming from their

vocation:

􀁳􀀀with faith that sees their actions not just in terms of the

impact on the bottom line, but in the larger context of the

impact of those actions, in collaboration with others, on

themselves and the world, in the light of God’s ongoing

creation;

􀁳􀀀with hope that their work and institutions will not be

predetermined by market forces or legal constructs, but

rather that their actions will give witness to God’s kingdom;

􀁳􀀀with love, so that their work is not merely an exercise in

self-interest, but a cultivation of relationships, building

communities of people.

25

86. In our own time, business students are informed by

powerful theories and highly trained in technical skills but

some unfortunately leave university without the ethical and

spiritual formation which would ensure that their insights and

skills are used for the welfare of others and the support of the

common good. Indeed, some leave with a formation which

predisposes them to live the divided life rather than giving

them the fundamentals which could help them build an

integrated life. Consideration of the ideas presented here can

contribute to a more complete formation of these students,

educating them to be highly principled and effective business

leaders. Teachers need to inspire their students to discover the

good which is within them and to follow the call they have to

use their professional skills and judgment as a force for good

in the world.

87. Entrepreneurs, managers, and all who work in

business, should be encouraged to recognise their work as

a true vocation and to respond to God’s call in the spirit of

true disciples. In doing so, they engage in the noble task

of serving their brothers and sisters and of building up the

Kingdom of God. This message has the aim of providing

inspiration and encouragement to business leaders, calling

them to ever deepen their faithfulness at work. We are

inspired by the many contributions lay leaders and business

professionals have made to the implementation of the

Church’s social doctrine. We invite educators and catechists

at parochial and diocesan levels, and specifically business

educators, to make use of the document here presented

with their students, inspiring them to respect and encourage

human dignity and to pursue the common good in their

management undertakings. We hope that this message will

stimulate discussions in businesses and universities, helping

business leaders, faculty, and students to: see the challenges

and opportunities in the world of work; judge them according

to the social principles of the Church; and act as leaders who

serve God.

26 ~ THE VOCATION OF THE BUSINESS LEADER

􀁳 Do I recognise the importance of strong and lively “indirect

employers” to ensure the right levels of labour protection

and community dialogue?

􀁳 Am I sensitive to the fact that if corporate decisions are not

deeply grounded in the dignity of the human person, they

will be prone to instrumentalist and utilitarian constructs

which fail to promote integral human development within

business?

􀁳 Do I regularly assess the degree to which my company

provides products or services which address genuine human

needs and which foster responsible consumption?

ORGANISING GOOD AND PRODUCTIVE WORK

􀁳􀀀􀀤􀁏􀀀􀀩􀀀􀁐􀁒􀁏􀁖􀁉􀁄􀁅􀀀􀁗􀁏􀁒􀁋􀁉􀁎􀁇􀀀􀁃􀁏􀁎􀁄􀁉􀁔􀁉􀁏􀁎􀁓􀀀􀁗􀁈􀁉􀁃􀁈􀀀􀁁􀁌􀁌􀁏􀁗􀀀􀁍􀁙􀀀

employees appropriate autonomy at each level? In other

words, am I organising human resources mindful of the

subsidiarity principle in my company management system?

- Am I assuming the risk of lower level decisions to assure

that his autonomy is genuine?

- Are jobs and responsibilities in my company designed

to draw upon the full talents and skills of those doing

the jobs?

APPENDIX

A DISCERNMENT CHECKLIST FOR THE

BUSINESS LEADER

􀁳 Do I see work as a gift from God?

􀁳 Is my work as a “co-creator” truly a participation in God’s

original creative act?

􀁳 Do I promote a culture of life through my work?

􀁳 Have I been living a divided life, separating Gospel

principles from my work?

􀁳 Am I receiving the sacraments regularly and with attention

to how they support and inform my business practices?

􀁳 Am I reading the Scriptures and praying with the will to

avoid the risk of a divided life?

􀁳 Am I sharing my spiritual path with other Christian business

practitioners (my peers)?

􀁳 Am I seeking to nourish my business life by learning more

about the Church’s social teaching?

􀁳 Do I believe that taking seriously the dignity of the person in

my business decision-making will promote integral human

development while making my company more efficient,

more agile, and more profitable?

MEETING THE NEEDS OF THE WORLD

􀁳 Do I see the responsibilities of my company as extending to

all the participants who contribute to its life, not simply to

the interests of the owners?

􀁳 Am I creating wealth, or am I engaging in rent-seeking

behaviour?

􀁳 Am I engaging in anti-competitive practices?

􀁳 Is my company making every reasonable effort to take

responsibility for externalities and unintended consequences

of its activities (such as environmental damage or other

negative effects on suppliers, local communities and

even competitors)?

27

IN SUMMARY

􀁳 As a Christian business leader, am

I promoting human dignity and

the common good in my sphere

of influence?

􀁳 Am I supporting the culture of life,

justice; international regulations;

transparency; civic, environmental,

and labour-standards; and the fight

against corruption?

􀁳 Am I promoting the integral

development of the person in my

workplace?

- Have employees been selected and trained to be able to

meet fully their responsibilities?

- Have these responsibilities and their scope been

clearly defined?

􀁳 Am I making sure that the company provides safe working

conditions, living wages, training, and the opportunity for

employees to organise themselves?

􀁳 Have I embedded a set of comprehensively defined values

and integrated that into my performance measurement

process? Am I honest with my employees about their

performance?

􀁳 In all countries where my company is engaged, is it

honouring the dignity of those indirectly employed and

contributing to the development of the communities

hosting these operations? (Do I follow the same standard

of morality in all geographic locations?)

􀁳 Do I place the dignity of all workers above profit margins?

CREATING SUSTAINABLE WEALTH AND

DISTRIBUTING IT JUSTLY

􀁳 As a business leader, am I seeking ways to deliver fair

returns to providers of capital, fair wages to employees,

fair prices to customers and suppliers, and fair taxes to

local communities?

􀁳 Does my company honour all its fiduciary obligations to

providers of capital and to local communities with regular

and truthful financial reporting?

􀁳 In anticipation of economic difficulties, is my company

taking care that employees remain employable through

appropriate training and variety in their work experiences?

􀁳 When economic difficulties demand layoffs, is my

company giving adequate notifications, employee transition

assistance, and severance pay?

􀁳 Does my company make every effort to reduce or eliminate

waste in its operations, and in general to honour its

responsibility for the natural environment?

28 ~ THE VOCATION OF THE BUSINESS LEADER

ENDNOTES

1Benedict XVI, Encyclical Letter Caritas in Veritate (2009), 38, 40.

2John Paul II, Encyclical Letter Laborem Exercens (1981), 25.

3Second Vatican Ecumenical Council, Pastoral Constitution Gaudium et Spes

(1965), 43.

4Deuteronomy 5:6–8: “I am the Lord your God, who brought you out of the

land of Egypt, out of the house of slavery; you shall have no other gods before

me. You shall not make for yourself an idol, whether in the form sof anything

that is in heaven above, or that is on the earth beneath, or that is in the water

under the earth.”

5Benedict XVI, Encyclical Letter Caritas in Veritate, 71.

6“Entranced by an exclusive reliance on technology, reason without faith is

doomed to flounder in an illusion of its own omnipotence. Faith without

reason risks being cut off from everyday life”, Benedict XVI, Encyclical

Letter Caritas in Veritate, 74.

7See John XXIII, Encyclical Letter Mater et Magistra (1961), 236.

8Second Vatican Ecumenical Council, Pastoral Constitution Gaudium et

Spes, 4.

9Benedict XVI, Encyclical Letter Caritas in Veritate, 19.

10Cf. Benedict XVI, Encyclical Letter Caritas in Veritate.

11Benedict XVI, Encyclical Letter Caritas in Veritate, Chapter 6.

12Benedict XVI, Encyclical Letter Caritas in Veritate, 45.

13Benedict XVI, Encyclical Letter Caritas in Veritate, 40.

14See the Economy of Communion from the Focolare movement, UNIAPAC,

Legatus, Woodstock Business Conference, Compagnia delle Opere from the

Communion and Liberation movement, as well other movements that have

taken seriously the relationship of faith and business.

15Benedict XVI, Encyclical Letter Caritas in Veritate, 11.

16See Benedict XVI, Encyclical Letter Deus Caritas Est (2005), 1.

17Pontifical Council for Justice and Peace, Compendium of the Social Doctrine

of the Church, 108.

18John Paul II, Encyclical Letter Sollicitudo Rei Socialis (1987), 38.

19Second Vatican Ecumenical Council, Pastoral Constitution Gaudium et Spes, 26.

20Pontifical Council for Justice and Peace, Compendium of the Social Doctrine

of the Church, 164–167.

21Pontifical Council for Justice and Peace, Compendium of the Social Doctrine

of the Church, 338.

22See Cardinal Bertone, “A Goal Greater than Profit”, Executive Summit on

Ethics for the Business World, Rome, June 16, 2011 (http://www.vatican.va/

roman_curia/secretariat_state/card-bertone/2011/documents/

rc_seg-st_20110616_business-ethics_en.html).

23Pius XI, Encyclical Letter Quadragesimo Anno (1931), 51.

24Oswald von Nell-Breuning, Reorganization of Social Economy, (Milwaukee:

The Bruce Publishing Co., 1936), 115-116.

25John Paul II, Encyclical Letter Centesimus Annus (1991), 36.

26John Paul II, Encyclical Letter Centesimus Annus, 43.

27Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of

the Church, 192-196.

28Benedict XVI, Encyclical Letter Caritas in Veritate, 45.

29John Paul II, Encyclical Letter Centesimus Annus, 32.

30Pius XI, Encyclical Letter Quadragesimo Anno, 135.

31John Paul II, Encyclical Letter Laborem Exercens, 6.

32John Paul II, Encyclical Letter Laborem Exercens, 6.

33John XXIII, Encyclical Letter , 83.

34John Paul II, Encyclical Letter Centesimus Annus, 48; see also Pontifical

Council for Justice and Peace, Compendium of the Social Doctrine of the

Church, 185 –186 and Catechism of the Catholic Church, 1883.

35John Paul II, Encyclical Letter Centesimus Annus, 35.

36Mt 25:14 30.

37John Paul II, Encyclical Letter Centesimus Annus, 35.

38Benedict XVI, Encyclical Letter Caritas in Veritate, 21.

39Benedict XVI, Encyclical Letter Caritas in Veritate, 48.

40Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of

the Church, 171–181.

41John Paul II, Encyclical Letter Sollicitudo Rei Socialis, 42.

42John Paul II, Encyclical Letter Laborem Exercens, 14.

43John Paul II, Encyclical Letter Centesimus Annus, 35.

44John Paul II, Encyclical Letter Centesimus Annus, 43.

45John Paul II, Encyclical Letter Laborem Exercens, 20.

46Benedict XVI, Encyclical Letter Caritas in Veritate, 53.

47John Paul II, Encyclical Letter Centesimus Annus, 57.

48Benedict XVI, Address to Participants on the 50th Anniversary of the

Encyclical “Mater et Magistra” (May 16, 2011),

http://www.vatican.va/holy_father/benedict_xvi/speeches/2011/may/

documents/hf_benxvi_spe_20110516_justpeace_en.html.

49Some of these organisations are UNIAPAC and its affiliates, Legatus,

Woodstock Business Conference, as well as new movements such as

Focolare’s Economy of Communion, Comunione e Liberazione’s Compagnia

delle Opere initiatives, or investor groups such as the Interfaith Center for

Corporate Responsibility, and other organisations and movements.

50Second Vatican Ecumenical Council, Pastoral Constitution Gaudium et Spes, 19.

51John Paul II, Encyclical Letter Centesimus Annus, 5.

52Benedict XVI, Encyclical Letter Caritas in Veritate, 5.

53Benedict XVI, Encyclical Letter Caritas in Veritate, 1.

54Friedrich Nietzsche, Beyond Good and Evil (Oxford: Oxford University Press,

1998), 154.

55Joseph Ratzinger, Introduction to Christianity, trans. J.R. Foster

(San Francisco: Ignatius Press, 1990), 266.

56John Paul II, Encyclical Letter Veritatis Splendor, 35.

57Benedict XVI, “Man Is Subject and Protagonist of Work.” Homily on Feast of

St. Joseph, Vatican City, March 19, 2006,

http://www.vatican.va/holy_father/benedict_xvi/homilies/2006/documents/

hf_ben-xvi_hom_20060319_lavoratori_en.html

58See John Paul II, Apostolic Letter Dies Domini (1998).

59John Paul II, Encyclical Letter Laborem Exercens, 24.

60Hans Urs von Balthasar, The Christian State of Life, (San Francisco: Ignatius

Press, 1983), 48.

61John Paul II, Apostolic Letter Centesimus Annus, 5.

62John Paul II, Apostolic Letter Centesimus Annus, 7.

63Benedict XVI, Encyclical Letter Caritas in Veritate, 47.

64John Paul II coined the term “indirect employer,” which is an important reality

for the businessperson (Encyclical Letter Laborem Exercencs, 19). When a

particular market system is so competitive and so dysfunctional that treating

employees justly is penalised, rather than rewarded, employers and managers

cannot be expected to create a fully just work situation. The right to a living

wage, for example, is the responsibility of all people, not just direct employers.

If a particular company is in a highly price-sensitive, commoditised market,

pressures to reduce labour costs may become so great that a particular employer

would be forced to pay the so-called market wage, which may be below a living

or family wage. An employer in such a system may be forced to pay lower

wages, provide fewer benefits, and let working conditions deteriorate in order

to compete with others in the industry. Failure to do this would place the

particular company at a competitive disadvantage. No matter how much direct

employers may want to pay a living or a family wage, they may be forced to pay

the going rate or go out of business. This scenario is most evident in developing

countries where labour protection is minimal, labour unions are suppressed, and

labour markets are flooded, although it also still exists in developed countries.

This is why so-called indirect employers are so critically important in the

determination of pay.

65See Benedict XVI, Encyclical Letter Caritas in Veritate, 40.

66Benedict XVI, Encyclical Letter Caritas in Veritate, 45.

67See John Paul II, Apostolic Constitution Ex Corde Ecclesiae (1990).

PONTIFICAL COUNCIL

FOR JUSTICE AND PEACE

COORDINATORS

Dr. Michael J. NAUGHTON, University of St. Thomas, Director, John A. Ryan Institute for

Catholic Social Thought-Coordinator

Sr. Helen ALFORD, O.P., Dean, Faculty of Social Sciences, Pontifical University of

St. Thomas Aquinas (Angelicum)

CONTRIBUTORS

Msgr. Anthony FRONTIERO, Rector, Cathedral of Saint Joseph, Manchester, NH

Dr. Kenneth GOODPASTER, Endowed Chair in Business Ethics,

University of St. Thomas, MN

Dr. André HABISCH, Professor of Christian Social Ethics and Civil Society,

Catholic University of Eichstätt-Ingolstadt

Dr. Robert KENNEDY, Chair, Department of Catholic Studies, University of St. Thomas, MN

Mr. Pierre LECOCQ, UNIAPAC President (International Union of Christian Business

Executives Associations); President and CEO of INERGY Automotive Systems

Rev. Domènec MELÉ, Chair of Business Ethics, University of Navarra, IESE Business School

Dr. Stefano ZAMAGNI, Professor of Economics, University of Bologna

EDITING

Mark HARRINGTON, Mary CHILDS, Elizabeth BRIEL

PONTIFICAL COUNCIL

FOR JUSTICE AND PEACE

FL-10230-Eng 03/2012 2,000__