COMMON WELFARE MATRIX
COMMENTARY
THE COMMON WELFARE BALANCE
The Common Welfare Balance is the core of the Common Welfare Economy. It places the
human being and all living entities as well as fulfilling interpersonal relationships in the center
of economic activity. The Common Welfare Economy translates standards for human
relationships as well as constitutional values into an economic context and rewards
economic stakeholders for behaving and organizing themselves in a humane, cooperative,
ecological, democratic way, as well as for showing solidarity. The key instrument for this
behavioral guidance is the Common Welfare Balance.
FUNCTION: MEASURING ENTREPRENEURIAL SUCCESS
The primary purpose of the Common Welfare Balance is to measure entrepreneurial
“success”, which constitutes the primary purpose of entrepreneurial existence and aspiration
in the Common Welfare Economy, as it does in the free market economy. However, success
in the Common Welfare Economy is no longer measured in financial terms, but in indicators
that measure the contribution of a company to the common welfare. The significance of
financial profit is too limited with regards to the actual objectives of economic activity: utility
optimization, need satisfaction, partaking of all, distributive justice, co-determination, gender
democracy, ecological sustainability, etc. The reason is that financial profit is measured
monetarily and money only measures exchange values, but no utility values. In the Common
Welfare Economy financial profit becomes a means to an end: the maximization of the
common welfare. Financial profit can no longer be maximized at any cost. It has to serve the
new end as a means.
The Common Welfare Matrix crosses collectively shared values – human dignity, solidarity,
ecological sustainability, social justice and democratic co-determination – with the
stakeholders of a company – employees, suppliers, customers, investors, (local) sovereign,
future generations, nature. The Common Welfare Criteria in the cross sections are
measurable and attached a certain value: the Common Welfare Points.
THE COMMON WELFARE MATRIX AND BALANCE
While the (easy-to-read) Common Welfare Matrix serves for pedagogical, political and
publicity work, companies apply the associated Common Welfare Balance. This can be a
spreadsheet analysis linked to a calculation program in order to facilitate the generation of
the Balance and check particular weightings.
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AWARDING COMMON WELFARE POINTS
The Common Welfare Points are exclusively awarded for the measurable Common Welfare
Criteria, whereas companies can decide voluntarily what criteria they try to realize and to
what degree. This means that points are awarded only for voluntary services that lie above
minimum standards. The purpose is the following: Today most companies are far-off the
common welfare ideal (best possible environmental protection, co-determination of all,
distributive justice, gender equality). Theoretically, corresponding minimum standards could
be formulated immediately in order to obligate companies’ “ideal” behavior. However, that is
exactly what does not work, because the self-interest (egoism) of companies reaches so far
that they fight higher binding standards with all their might. The method to keep higher
standards an option of voluntary adherence, while legally rewarding those companies that
reach them (over taxes, customs duties, interest rates, public contracts, etc), could solve this
stand-off. In this manner, more and more companies will stick up for this gentle political
reversal of entrepreneurial aspiration towards common welfare. The Common Welfare
Balance would induce a process that gently picks up companies in their current state and
directs and allures them without force, in accordance with market conditions, into the target
state.
The Common Welfare Balance serves as the catalyst in this process: the more companies
apply Common Welfare Criteria in their economic activity and the more companies will get
closer to and reach the Common Welfare Goals, the more criteria from the Common Welfare
Balance can be turned into legal minimum standards and thus make room for newer and
stricter voluntary Common Welfare Criteria. This way the whole entrepreneurial landscape
moves towards common welfare. Those companies remaining with the “old” set of values run
risk of going bankrupt! The pioneer companies, the “common welfare maximizers”, have a
walk-over.
MAXIMUM 1000 POINTS
To keep it comprehensible, the Matrix/Balance is composed of maximum 50 criteria
segmented into the five main values (human dignity, solidarity, ecological sustainability,
social justice, democratic co-determination & transparency) that can add up to a maximum of
1000 points. Per criteria a maximum of 50 Common Welfare Points can be awarded.
Besides, there is a maximum of 200 points for each of the five values, because all values are
alike and thus, a complete neglect of one value cannot be compensated through gaining
more points in the category of another value.
GRADATION AND MONTHLY FACTORING
Some Common Welfare Criteria can be met or not; hence you can achieve the maximum
amount of points or none at all; e.g. incorporating the devise of the company to the
employees in the company statutes. Other criteria can be met in stages; for instance, the
hours invested into advanced training during working hours are valued higher and advanced
training outside working hours are valued lower. Further criteria can be gradually met and
awarded 1-50 points, depending on the grade of satisfaction of the particular criterion. When
dealing with partial compliance monthly factoring can be applied: e.g. if a company opens an
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in-house kindergarten on 1 July or 1 December, it is awarded 6/12 or 1/12 of the respective
Common Welfare Points.
The goal is to create as many Common Welfare Criteria as possible that allow for gradation
in order to be able to also measure small achievements.
KNOCK-OUT CRITERIA
The problem that currently some behaviors extremely harmful to the common welfare are
legal can be resolved with Knock-out Criteria. Companies exercising hostile takeovers,
generating electricity by nuclear power, genetically modifying seeds or constructing largescale power plants in ecologically sensitive regions receive 0 points in a whole category of
values, independently of the other achievements within this category. Those achievements
will still be indicated, but not awarded.
GENERAL CRITERIA: LEEWAY FOR CREATIVITY AND ASSESSMENT
The concrete Common Welfare Criteria should not keep companies from looking for their
own means and ways to serve the common welfare. Therefore, next to achieving the
Common Welfare Criteria, they should always keep in mind the “global questions”: How can I
best apply value X opposite relevant/affected group Y? Through commonly striving for (lat.
com-petere) innovative, more precise and finer criteria, new ones will be found continuously.
The Matrix facilitates this quest through “General Criteria” that formulate goals (e.g. codetermination of employees regarding decisions concerning the company) and only provide
examples for their implementation (e.g. sociocracy); the possibility to find new, equally
effective steps for implementation is left open. Thereby companies retain a certain leeway for
creativity and Common Welfare Auditors (see below) for their assessments to address
sectorial and corporate specifics (e.g. industry-sector-specific environmental risks, risks
based on the production site or supply market). The Balance, thus, not only predefines rigid
criteria, but allows for a certain degree of flexibility, so that companies can contribute to the
development of the idea. The assessment of a general criterion is effected in three
gradations (high/medium/low) that are described in the glossary/assessment manual and are
constantly developed and continuously defined more precisely.
The characteristics of the three gradations are roughly described here:
Low: Programs/Activities only take place in a few locations of the company; only few aspects
of a topic are addressed; despite an active approach some essential risks are not being
addressed; etc.
Medium: A topic is broadly addressed, but shows defects with regards to content;
possibilities for improvement can be identified easily; etc.
High: Most relevant aspects of a topic, in particular risks, are actively measured and
controlled through institutionalized programs/activities/processes. The most important
aspects are addressed through qualitative and quantitative objectives, including deadlines as
well as clear strategies. The parameters (e.g. emission values, accident statistics, etc.) are
much better than the sectorial/general average.
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DIFFERENT COMPANY TYPES
For all types of companies – sole proprietors, farms, services or manufacturing enterprises –
the Balance consists of two parts: a) a general part that is the same for all companies, and b)
a sector specific part that addresses the specifics. Even though the number of the Common
Welfare Criteria is not the same for all types of companies, they can all reach a maximum of
1000 points. Possible differences in the number of Common Welfare Criteria are adjusted
through a calculation program. This has the double advantage that if the same criteria are
used the same amount of points can be awarded, while the Common Welfare Balance Total
or Common Welfare Score (the sum of all Common Welfare Criteria reached), meaning the
bottom line results of all companies are comparable.
COMMON WELFARE COLOR FOR CUSTOMERS
To enhance the visibility of the Common Welfare Success, five or ten Common Welfare
Stages could be differentiated and marked with as many colors. This would particularly help
customers, because the Common Welfare Balance would be printed on all products and
services. Also the Common Welfare Number could be included in the color. Who wants to
know more details could scan the bar code with the cell phone and would immediately
receive the complete Common Welfare Balance online. The Common Welfare Balance is
public.
COMMON WELFARE AUDIT / COMMON WELFARE
BALANCE ASSESSMENT
Who controls the Common Welfare Balance, and how? When the whole process is fully
realized a new profession can carry out the task: the Common Welfare Auditor – equivalent
to the accountant, who presently checks financial balances. At the outset the Balance is
generated and checked by the company internally (controlling, internal revision) and
afterwards is taken to the audit, where the verification, the attestation, takes place. Only then
the Balance is valid and turns effective. In contrast to the financial balance the Common
Welfare Balance offers a lot of advantages:
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It is easily comprehensible, because the criteria are simple and humane.
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It is public and accessible to all.
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Many stakeholders have a solid interest in the accuracy of the Balance.
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Every attempt to falsify the results would fail promptly: since the Common Welfare
Auditors would lose their license when approving of a fake balance, the possibility for
fraud and corruption is minimal.
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Companies have an intrinsic interest to reach the best possible Common Welfare
Score since a lot of legal advantages allure them. Nevertheless, everything is
voluntary and that is why neither an examining board nor bureaucracy is needed. The
Common Welfare Balance guides the behavior of companies without causing
additional regulation orgies.
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Analogous to the division of the consulting business and the examination with regards to the
financial balance also the Common Welfare Audit Consulting and Assessment could be
divided by law.
In a pilot phase (2011) “pioneer companies” that voluntarily generate the Common Welfare
Balance could assess one another or be assessed by third parties, for example by members
of the “Platform Common Welfare Consultants”.
It would also be possible that due to the complexity of the subject matter audit teams could
replace individual auditors. This would improve the test results by making them even more
incorruptible.
Stand: 1 April 2011
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