I’m still fighting an uphill battle trying to get through all the Google-related news. I decided to just comment on particularly interesting or annoying items as opposed to everything that comes across my desk. In that spirit, I wrote last night about GoDaddy’s exit from the .CN market. You can read that post on china/divide.

I didn’t get a chance to post anything here yesterday on account of a little thing called the “Reader_S” virus. Lovely little bastard – I’m still waged in mortal combat with that insidious creature even after spending a good eight hours last night doing the old scan, delete, scan, repeat dance step. Wish me luck.

Anyway, I will try to get to some non-Google related items at some point. I expect that everyone is rapidly getting sick of the 24/7 Googlefest.

However, one related issue that has been rattling around inside my mostly-empty head involves companies like Google whose business decisions are, at least partly, influenced by moral principles. By all accounts, Sergey Brin in particular has pushed Google’s move out of China because he believes that censorship is wrong.

This is one of the big discussion points when it comes to Corporate Social Responsibility – at least it is for me. If a privately-held company makes a decision based on moral principles that might be bad for business, no one cares. But listed companies have lots of shareholders and are under certain disclosure obligations. What should be the standard in these cases? (Disclaimer: I am not an expert in securities law, so I will not pretend to know the current standard here, or even if there is one.)

Consider the ramifications of the Google China decision as discussed in this Yahoo news article:

A Google exit from China clearly opens the door for rivals such as Baidu and Microsoft while leaving the search leader with few near-term options for capitalizing on the fastest-growing Internet market in the world, analysts say.

A decision to remove its search engine from China would cheer human rights activists and freedom lovers, but would anger some shareholders.

At least in the short term, Google’s decision to leave China is obviously a poor business decision. In the medium to long term, however, it’s not so clear. Perhaps Google’s stance on censorship will engender a great deal of goodwill, and Google will reap the benefits in greater market share and customer loyalty in other countries. Impossible to predict.

Google is a good example of why corporate law in most jurisdictions gives executives and Boards of Directors a great deal of latitude in making such decisions. It’s simply too difficult to judge what is a “good” decision, and we don’t want juries or judges second-guessing businesspeople.

But if the Google situation may be murky, certainly as more and more companies institute CSR policies and, perhaps following the example set by Brin and Google, begin mixing in moral principles with purely profit-making motivations, will we start seeing decisions made on behalf of public companies that are obviously not in the best interests of the company?

If so, what to do about that? Will shareholders start suing corporations, alleging that their interests have been harmed by such decisions?

My personal feeling is that disclosure is key. Everyone knows that Google places a premium on not “doing evil.” Shareholders are/should be aware of this before buying Google stock. When Google makes a decision based on moral principles, therefore, it should not come as a shock to an investor, nor should they have an action against Google for making a poor business decision.

This should also hold for other public companies. If among the business goals of certain companies is the support of certain moral principles, and the company may make certain decisions motivated by moral principles that are at cross-purposes with purely profit-making activities, it should let investors know about this ASAP, preferably when the company is formed and its By-Laws written. If “moral principles” are incorporated into the company’s goals sometime after formation, that goal should be added to a company’s By-Laws and perhaps in all prospectuses.

Just some musings. I have a feeling that this will come up more often in the future.