Take corporate social responsibility to a higher plane

Dec 03, 2006 Management, Sunday Nation

CSR – three letters that have become very important, very common, even very fashionable in the common discourse of business people. Companies now seem to need a special corporate social responsibility 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’.

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?

Is it not 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 companies behave in this bigger playground? Just how ‘socially responsible’ is their behaviour? There is a fundamental question to be posed here: before we give, we must ask ourselves what we 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. And, as standard-bearers and role models, they often take away the ethics and integrity of the society in which they operate.

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? All around us, we can see many bad things being done: employment based on discrimination; ridiculous pay levels; unsafe working environments; denial of the freedom to associate; little or no consumer protection; and brainless destruction of the natural environment.

If your company does not engage in these practices, congratulations: your CSR has already begun. But casual observation tells us that awful practices are common: 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 using bribery to go past all obstacles, instead of stopping to make a stand. But the very firms doing all of that are also often found engaging in ‘CSR’ – making donations to orphans, and appearing with cheques on the lawns of State House when famines or floods have 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 you willing to make a public promise as an organisation to strive to do no harm, and to invite the public to challenge you when you fail? 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 to charity? Does Safaricom, with its record Shs 12 billion profit, even need to do any more?

Yes it does.

Business is bigger than profit. New thinking about business suggests that it is a two-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.

Profit is a necessity: without it, there is no cake for anyone to share. Without an attractive return, no capital will appear to fund business. But profit is just the basic goal of the corporation. A modern business must be more than a profit machine: it must also obey the law; it must do the right thing, even when the law fails to demand it; and it must engage meaningfully with the community of which it is a citizen.

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. Our companies, unless they participate in a bigger arena, are just collections of individuals temporarily thrown together for a transient (and ultimately unsatisfactory) purpose.

For corporations, there are good ways to give. We must give time, effort and skills, not just the spare change on our balance sheets. Perhaps most importantly, we must give with great humility. Giving is a privilege, not an act of charity. It is an honour, not a corporate event. 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.

It is far better to make 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. Good CSR is not charity: it is an expansion of the company’s sphere of action, and the spreading of the benefits that ensue from the company’s core business.

Lastly: business leaders should never forget the role they 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: 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.

Good behaviour cannot be separated from CSR – beware those who donate by day and misappropriate by night.