"CEOs can't wait to read Sunny Bindra's articles every week."

How sincere is your company’s CSR programme?

Jun 01, 2009 Business Daily, Management

“As firms grapple with a brutal economic downturn, they are taking a long, hard look at the resources they devote to everything from supporting charities to making their activities carbon-neutral. That is hardly surprising: cutting back on CSR, or “sustainability” as it is sometimes known, would seem to be a quick and relatively painless way to save money. Cassandras who felt many CSR initiatives were little more than publicity stunts in the first place predicted that they would perish as soon as the economy fell off a cliff.”

The Economist (May 14, 2009)

Does your company mean what it says when it comes to Corporate Social Responsibility? I guess we may be about to find out.

In the past few years, corporates have embraced CSR as never before. Firms were falling over themselves to show how committed they were to the community around them, splurging large sums on various do-good initiatives that, on the face of it, had nothing to do with the business of the company.

This is particularly pronounced in Africa, where citizens seem to view large corporates as “Mama na Baba”, who must sustain not only employees but their extended families from cradle to grave. In rural areas, the large companies that run plantations and extractive industries often end up providing everything from education to medical care to infrastructure for the local community. If they do not do this, they will know no peace from local MPs and chieftains.

Urban corporates do not face the same pressures, but nevertheless try to outdo each other in sponsoring students, getting involved in environmental conservation, or a plethora of initiatives that place a halo on the company. The reasons given for this largesse are equally noble: “giving back”; “investing in the future”; “being a responsible citizen”, and the rest.

Well, this whole thing has its sceptics, and I admit I am one of them. I get very nervous when companies scramble for publicity by doling out money, food, scholarships and the like. I get nervous when companies ‘bribe’ communities with apparent generosity. I get nervous when bad practices are hidden by the cloak of fake munificence. And I get especially nervous when I see the amazingly free-handed magnanimity with which managers dole out money that doesn’t belong to them.

That is not to say that there is no such thing as CSR. In Africa in particular, governments are often ‘missing in action’, and companies are forced to step in and provide facilities that would otherwise not exist – in their own interest. I am not an advocate of blindly seeing the shareholder as the only stakeholder in the business. I am a great believer in business as a force for good in society – as a need-fulfiller, an employer, a buyer, a tax-payer, a role model, a lobby for enlightened practice. It is a quite possible for investments in non-core activities to yield a positive return.

Good businesses that do things right are in fact at the centre of a virtuous ecosystem: they generate wealth of many types for many constituent elements in the ecosystem – employees, customers, suppliers, shareholders and governments amongst them. But good companies can fulfil this just by being good companies: by producing quality products, by paying fair wages, by paying all their taxes, by not polluting the environment. They do not need to engage in fake piety or take their activities way out of their core arenas.

The recession will tell us who was serious about CSR and who was just playing PR. We will soon see what was of strategic importance, and what was discretionary spend. But remember this: at the end of the day, your company can do a great deal of good by being good, and by doing no harm.

Buy Sunny Bindra's book
here »

Share or comment on this article