It's about getting the basics of business right
One of the more incredulous moments of my time working in Corporate Social Responsibility (CSR) in London occurred at a presentation about seven years ago.
The presenter, a well-intentioned CSR thinker and expert (and to be fair, someone with limited actual business experience and a notable Eurocentric perspective) was making a point on the historical antecedents of the concept of CSR.
To my horror, one of the historical roots being claimed was education programmes instituted in India during the 19th century by the British East India Company!
It is common knowledge that the British East India Company was the first true global corporation, but it is also renowned as a ruthless, slave-trading organisation that also committed — to put it delicately — atrocities in India that are well-documented.
The irony in the presenter’s argument — that one of the worst examples of corporate irresponsibility in the history of global commerce was being cited as a forerunner to CSR practice — was completely lost on the earnest presenter, and to be honest, on most of the audience as well.
I was reminded of this experience while considering another irony that is currently shaping the whole discussion on CSR which has experienced a marked reduction in both volume and content over the last few years.
The blame for this has been generally put down to companies, big and small, applying laser-focused cost management as a survival strategy to deal with the global slowdown and the subsequent austerity programme.
CSR in that context appears to be an unwelcome diversion — both of resources and management attention.
However, this creates another irony — that the volume on the debate on CSR is being reduced as a result of a crisis caused in part by the irresponsible, unethical and, in some cases, illegal actions by some global financial institutions.
To reconcile these aspects requires us to consider that the entire agenda of CSR — while well-intentioned — was based on a faulty foundation.
Most of it was premised on the need to understand how business can take action to be a “force for good” in society. It unintentionally set apart the act of “business doing good” from the act of “doing business.”
It is that disconnect that ultimately led to the two points of irony discussed above. In the first, CSR was an add-on to a fundamentally awful business agenda, and in the second, it was a demonstration of how CSR is considered a function of profitable firms — as opposed to a perspective that profitable firms acting irresponsibly can have significant negative effects.
If the latter consideration was applied to the current post-crisis context, then we would expect the CSR debate to be on full-throttle as parties ponder why highly profitable international financial institutions acted in a manner that created unsustainable levels of debt that threatened the global financial system.
There are real lessons here for the local business environment when CSR is considered to be a way of doing “good business” rather than “doing good as a business.”
The first of those lessons, in my view, is that the way a business conducts its trade, procures its contracts, hires and develops staff, implements policy aimed at handling issues such as sexual harassment and discrimination, and how it addresses the safety of its operations are all a part of its basic commitment to CSR.
Doing the basics of business right — running a responsible business — is the foundation of CSR. In local parlance, "Put yuh own house in order fuss" before trying any ambitious efforts at charity and sponsorship.
The second lesson I suggest is that there is a big ethical dimension which needs to be addressed if a business is serious about CSR.
In the current climate, where allegations and whispers of fraudulent business practices seem to be a part of almost every casual gathering of business leaders, it is even more imperative for us to have a discussion on ethical business.
This is not just a local issue since, as alluded to above, the LIBOR scandal is an illustration of unethical practices on a global scale that occurred at some of the world’s most powerful financial institutions.
This is a difficult conversation for many to have, since by raising the issue an individual or organisation can appear to be casting aspersions or making accusations. In that regard, I think the Energy Chamber's initiative on Corporate Governance is an excellent point of entry into the conversation.
I suspect it is difficult to start dealing with the problem when many small or family-owned businesses and even NGOs do not have a good idea about what “good” looks like in regard to modern corporate practices and processes.
Worse, many do not realise that, as they begin to look beyond the CARICOM market, having a well-established set of corporate governance practices might offer a competitive advantage, particularly in the U.S. and European Union markets.
As a small business owner myself, I understand that some of this might appear quite removed from the daily activity of winning new business and keeping existing customers satisfied while meeting obligations to shareholders, employees and creditors.
However, my plea is that if you focus on doing business that seeks to make a positive impact from the inside-out, then there is real business value via loyalty from customers and staff, productivity and operational efficiencies.