“A Good Business for All”

Nov 29, 2006 Strategy, Talks and Speeches

Address given at Ufadhili Trust CSR East Africa Conference, Safari Park Hotel, 29 November 2006

Ladies and Gentlemen

Thank you very much indeed for inviting me here. It is a privilege to address this very important gathering – the more so because you are drawn from all over East Africa.

CSR – three letters that have become very important, very common, even very fashionable in the common discourse of business people. In some ways, that is a little surprising. Why should corporate social responsibility be such a big deal? Isn’t it actually an entirely natural thing that corporations should be socially responsible? Why do companies need a special CSR strategy, special positions in the organisation dedicated to CSR, and a whole menu of special events laid on during the year to show the world that they have CSR?

It is surprising because it should be self-evident that corporations exist within a bigger reality. Companies need customers to buy their products, and they need those customers to be secure and to have growing purchasing power. They need suppliers to provide high-quality raw materials and services, without cutting corners or engaging in sharp practice. They need to be in a society that produces skilled and willing workers. They need the support of local communities in order to be sustainable.

But in what manner do we behave in this bigger playground? Before you give, ask yourself what you are taking away. For many corporations, CSR giving is a mere bagatelle, just window dressing, for they take away far more than they will ever return. And what do they take away? They take the future of the environment around them. They take away the human dignity of their workers. They take away the ethics and integrity of the society in which they operate, as standard-bearers and role models.

Do corporations do harm? Do we need reminding of what Union Carbide did to a town in India called Bhopal? Or what various oil companies have done to natural habitats? Or what fishing trawlers are doing to marine life today? Do we even need to go very far to see the harm done by companies? Ask yourself these questions, in your own setting:

How do you employ and pay?
Are bribes being paid somewhere in your supply chain?
Is your working environment safe for all?
Do you allow your workers the freedom of association?
Who protects your consumer – you or someone else?
Do you operate at the expense of everyone’s future environment?

Can you answer all those questions in the affirmative? Congratulations, your CSR has already begun. But not many can. For most, awful practices are the norm: dumping effluent into the nearest river or lake; making workers work night shifts and locking them in, in contravention of all safety regulations; ferrying them around in trucks as though they were cattle; and bribing your way past all obstacles, instead of stopping to make a stand. But these firms are also often found engaging in ‘CSR’ – making donations to orphans, and appearing with cheques on the lawns of State House when a famine has struck the land.

Surely, the first and most fundamental point of CSR, before you even think of doing good, is to do no harm. Are we willing to make a public promise as an organisation to strive to do no harm, and to invite the public to challenge us when we do? That itself would be an excellent start, and might achieve more than your annual CSR budget does for the good of humanity.

A second fundamental point relating to corporate giving: corporations give, very generously and magnificently, even when they give nothing to charity. Allow me to explain. A company that produces a good product, that rewards those who risk their capital, that sustains itself over decades, is already doing a great deal of good. It is supporting its shareholders; it is providing careers to its employees; it is sustaining an ecosystem of suppliers and distributors; it is providing tax revenue that should be used to build roads and maintain police forces; it is satisfying the needs of consumers. If that is so, should managers even take money that does not belong to them to dole out charity? Does Safaricom, with its record Shs 12 billion profit last year, even need to do any more?

Yes it does.

Business is bigger than profit. New thinking about business suggests that it is a 2-way contract with society – a contract in which both sides have obligations, in which societal issues become integrated into business thinking. That is not the thinking of a bearded and impoverished activist; it comes from the head of McKinsey, one of the world’s leading consulting companies, and the firm that is preparing Kenya’s Vision 2030 Strategy.

Charles Handy, a wise sage of the business world whose works we should all consult from time to time, tells us that “the purpose of a business is not just to make a profit, full stop. It is to make a profit so that the business can do something more, or better.”

Any life, whether it is that of an individual or an organisation, only makes sense as part of a greater whole. To have any importance, we must be an element in a bigger idea. In themselves, our lives are irrelevant events in the maelstrom of existence. Our companies, unless they participate in a bigger arena, are just collections of individuals temporarily thrown together for a transient (and ultimately unsatisfactory) purpose.

Many of us find this a very difficult concept. We get carried away with our achievements, both personal and corporate. We forget that the only way to find the higher road is to lower your eyes – that is, to submit.

We fail to recognise our own unimportance. In the Indian classical singing tradition (which goes back for centuries) there is something that even the most accomplished, the most famous singer is taught. You are always beneath the song. You are always beneath the audience.

This is a lesson many of us need to learn, particularly those with some fame to their name, some achievements of note. No matter how high you go, you are still nothing. No matter what prizes you win and what fortunes you gather, you are still nothing. No matter how much profit your company makes, it is still just an entity within a larger entity within an even larger entity. To have any meaning, we must be part of a bigger whole.

This exhortation is found in all cultures. St. Francis of Assisi asked for himself:

“Grant that I may not so much seek
To be consoled as to console,
To be understood as to understand,
To be loved as to love”

And therein lies the secret. The truly happy moments in our lives are when we give happiness to those around us. No one has ever received long-lasting happiness from buying the DVD player, or from beating last year’s profit record. There is an inner being in us yearning to connect with the larger whole. The only way to do this is to give: give love, give kindness, give help.

But there is a way to give properly. True giving is not about what is extra, unneeded in your life. It is about getting out of your comfort zones, out of comfortable hotels. It is about giving more than you can afford to give. It is about giving without calculating. It is about giving time, effort and skills, not just the spare change in your pocket. It is about giving promptly, when needed. Perhaps most importantly, it is about giving with great humility. Giving is a privilege, not an act of charity. It is an honour, not a corporate event. The audience is higher than the singer, remember. You are not doing anybody a favour by being generous. When you give, you are merely returning what was never yours in the first place – and in the process you are recapturing what it means to be truly human.

For corporations, too, there are good ways to give. It is far better to make your giving systematic and sustained, not whimsical and short-lived. It is better to dig a few wells deep, rather than scratch around the surface in a hundred places simply because that provides more photo opportunities and handshakes for the CEO. For that, it is better to link your CSR to your core strategy as a business. That way, you will do it well and do it long. An example is EABL’s ‘Water for Life’ programme. Clean water is a key ingredient in EABL’s production process, so it invests heavily in ensuring it has a secure and steady supply. Its CSR, however, comes in ensuring that it gives the same benefit to the communities in which its plants are present. That is thoughtful and sustainable CSR, of the type that you should all endeavour to develop.

As business leaders we should also never forget the role we play as points of reference. In Africa, business leaders are generally regarded as titans, as high-profile figures in society. That places a great burden of responsibility on us: as exemplars and as role models; as standard setters and as path breakers. Those are not roles to take lightly, for they can influence the behaviour of whole populations, of whole generations. You have been given a badge of honour; give back the example of wearing that badge with dignity and with integrity.

So, what have I told you about CSR that may help you over the next 3 days?

1. That a business does good by merely existing well, for a good business is at the heart of an economic ecosystem.
2. That the starting point of CSR is to do no harm.
3. That good CSR is not a ‘nice to do’ part of business – it is part of its very essence.
4. That CSR is part of a contract with society, which must be upheld and honoured.
5. That the best CSR initiatives are linked to business strategy, and are deep and long-lived.
6. That good behaviour cannot be separated from CSR – beware those who donate by day and misappropriate by night.

May your deliberations take you into new territory.

Thank you.