The Law of Long-Run Self-Interest, or the Iron Law of Responsibility:

“In the long run, those who do not use power in a manner that society considers responsible will tend to lose it.”

Source: Davis and Blomstrom (1971).

The Principle of Public Responsibility

The firm is said to have three levels of involvement:

Primary involvement: Doing the firm’s basic tasks or missions.

Secondary involvement: Fixing the unintended byproducts of the primary level, such as cleaning up pollution.

Tertiary involvement: Everything else, such as making speeches at business school graduations or acting as a public expert on the economy.

The originators of this principle, Preston and Post, claim that managers should stop after the secondary level. In other words, as a rule of thumb, firms and their managers should not be engaged in activities beyond their formal tasks and the impacts of those tasks.

Source: Preston and Post (1975)