Bring Social Responsibility into the Mainstream
25 November 2015
In many companies more thought is now being given to how to make the best use of corporate social responsibility budgets and increase the impact of CSR activities. What might happen if a responsible business perspective were brought to all aspects of an organisation's operations and how the full range of its capabilities could be used to address social issues? What if social, educational, environmental and health problems that have hitherto been viewed as possible arenas for occasional CSR projects were viewed as mainstream business opportunities? Would this amount to the commercial exploitation of misery, or could a combination of innovative thinking and imaginative use of new capabilities provide affordable and inclusive solutions that would transform lives?
Values, CSR and the Boardroom
Changes of vision, mission and policies and corporate priorities are matters for the board. Directors should also be concerned with making the best use of corporate capabilities, fostering innovation and creativity, safeguarding and enhancing reputation and trust and building mutually beneficial relationships with a range of stakeholders. The widespread availability of mobile devices and greater awareness of social media means that a great many people have the ability to capture and disseminate human interest stories. As a consequence, both responsible and irresponsible actions are more visible. Causing harm can result in almost immediate condemnation, but awareness of good news can also quickly spread, increasing reputation and other benefits from positive developments.
Directors and boards are custodians of an organisation's conduct and values. A board of may have to establish responsible business policies and principles to cover the activities of people from a range of nationalities, religions and political persuasions, some of whom may have very different values. Certain choices may be more difficult than they appear at first sight. Some directors find it easier to make ethical judgements than others. Should entrepreneurs embed CSR into corporate boardrooms or should they be sceptical? Where markets are free and regulation is effective, does irresponsible conduct simply lead to customers, investors and one's best employees going elsewhere?
Might codes, external lobbying, Governments and the media lead some directors to loose sight of the primary purpose of enterprise? Might certain boards contribute more to wider society, as well as immediate stakeholders, by avoiding distraction with peripheral CSR initiatives, and focussing upon innovation and more effective and sustainable operation in their core business, where as Milton Friedman pointed out in his classic book Capitalism and Freedom their comparative advantage is greatest and corporate capabilities are most relevant? Are entrepreneurs being most responsible when they concentrate upon innovation and differentiation and giving customers new options and better, healthier and more affordable and sustainable choices? Is this responsible business?
Are we in danger of imposing so many duties and expectations upon directors that some of them might loose the plot? In discussions of corporate values and ethics, what is the value of diverting attention and resources from a core activity where breakthroughs could be game changing to an initiative that may be inefficient in comparison, but which is undertaken just to tick a CSR box and chalk up a 'responsibility' credential? In terms of their small scale, relative ineffectiveness and opportunity costs, is the use of corporate resources for some 'social' initiatives ethical or unethical?
Sustainable and Entrepreneurial Development
In entrepreneurial contexts, the sustainability of an enterprise can involve innovation, discontinuity and what the economist Joseph Schumpeter termed “creative destruction”. More sustainable operations and practices can require the breakthroughs that creative entrepreneurs can bring about. The desire, intention and rhetoric of sustainability needs to be matched with practical initiatives to change behaviours in desired ways without putting a company at a competitive disadvantage. Sustainability concerns create new business opportunities. A more sustainable business model can also attract certain stakeholders. As I have argued in my recent research reports Transforming Knowledge Management, Talent Management 2 and Transforming Public Services there are cost effective ways of helping staff, customers and users of goods and services to make more responsible and sustainable decisions. Is this responsible business?
Breakthroughs are incurring in a wide range of fields and when linked with greater connectivity they have the potential to simultaneously transform many aspects of our lives, including the nature of work and organisations and how we learn, consume and manage our health. Consider a company operating in a field such as 3D printing. Teams should be working with a wide range of customers and prospects and both public and private organisations to identify possible applications. There is huge scope for innovation and joined-up approaches. Imagine the many uses of 3D printers - for example shared ones in rural villages in India - that could address social issues. For example, could items from mobility aids to prosthetic limbs be quickly produced at a greatly reduced and now affordable cost to reach large numbers of people, including marginalised groups such as lepers.
Where there are calls from politicians, commentators, social and traditional media, and others for growth and development that is inclusive as well as sustainable, how should boards respond? While meeting legal obligations, should they skew business decisions to favour particular groups, or to achieve social objectives that might not be priorities for other stakeholders? Does being responsible extend to social engineering, supporting Government policies and becoming involved in areas that are properly the province of Government? While many Governments might be very concerned with finding jobs for unemployed people, an entrepreneur seeking to be competitive and at the cutting edge might adopt strategies that reduce employment. Other developments might enable more people to build businesses and create jobs. Would the more innovative use of corporate capabilities - and especially the core ones - help directors to resolve dilemmas and collaborate with others in creating business opportunities that yield both commercial returns and social, public and reputation benefits?
Boards have to make choices. What are green or social credentials? How important are they to customers and other stakeholders? How should one assess their achievement? How is a company portrayed in social media and how representative are the views being expressed? In relation to timing, should directors act now or later, for example when the cost of renewable energy has further reduced? At what point has one done enough? With self-contained projects such questions can be difficult to answer. Viewing social issues as arenas for the application of existing and emerging capabilities, talents and technologies, and inspiring and encouraging imagination, can result in the continuing innovation that simultaneously achieves multiple objectives. Activities, solutions and their impacts can evolve as requirements, priorities and the criteria by which companies are judged change. Innovation in one's core business can be responsible business and sustainable business.
These comments draw upon Prof. Colin Coulson-Thomas' theme paper for the Institute of Directors of India's 15th London Global Convention on Corporate Governance and Sustainability. The CMI Ambassador holds a portfolio of board, public, academic and professional appointments including as leader of the International Governance Initiative of the Order of St Lazarus, Director-General of IOD India, UK and Europe and a member of the business school team at the University of Greenwich. He has helped organisations in over 40 countries to improve director, board and corporate performance, spoken at over 300 national and international conferences.