Corporate Social Responsibility – Why change? Why Bother?

The meeting with the Board hadn’t started well. Asked in by the Company Secretary to facilitate a group discussion on corporate social responsibility (CSR) and its role in next year’s corporate plan, I should have been warned by his earlier remark that they were a ‘lively group!’

‘Greenwashing’ had been the first utterance from the Finance Director, which at least indicated an appreciation of CSR issues and terminology, but it was soon clear that the Marketing and, surprisingly, the HR Director were of the same opinion.
I was starting to admire the Company Secretary and the challenges he had admitted to in earlier conversations. The company was doing well, but stuck strategically.  He also wanted to lay down a stronger sense of accountability and governance within the Board, helping them develop collectively as a group in their strategic thinking.  The symptoms were all too apparent in this well-respected food manufacturing & processing company – there seemed to be no long-term strategy only a focus on today’s problems, no one had direct accountability for SHE leadership only a collective awareness of ‘problems’, ‘brand’ was indelibly linked to ‘marketing & sales’; with ‘cost and efficiency’ left to Operations.
Corporate Social Responsibility (CSR) should not be a new concept for any Board or executive group – although many still see it negatively in terms of business irrelevant; box ticking in supplier relationship dynamics; window dressing designed to improve company image and PR; or feel good brownie points with staff or the local community.
So, it was in this Boardroom. Why should these executives and businessmen engage with CSR concepts when they felt little personal connection with the subject and had other more pressing issues?

Strangely the first chink of light came from the Finance Director. I had run through the generics of CSR and was starting to bring the concept back to how it could align with their business and what it seeks to achieve going forward.

‘Build sales, margins and client relationships!’ was his interjection ‘Explain how CSR can deliver these!’

CSR failures can have clear negative impacts on a company’s reputation and financial fortunes, so 5 good reasons why CSR should be important to you:

  1. Because your competitors are already thinking about it in their Boardrooms – there have been too many food hygiene scandals over the last few years.
  2. Your clients and customers want you to do it.
  3. Because all things being equal – price, quality, service, timing, etc, consumers tend to lean towards food brands with the better ethics.
  4. Because some of your competitors are already doing it.
  5. Because your bottom line, access to prime resources and ultimately brand value will suffer if you don’t do it start to consider it as a business economic option

There are a lot of questions here that every board should take time to examine strategically:

  • Why are our competitors thinking in this way?
  • What competitive angle do they perceive?
  • How are we perceived on these criteria?
  • etc

Many executives, through unfamiliarity, miss out on making the most of CSR practices as an added business tool. When you start to examine your corporate social responsibility, it is easy to get side tracked into the PR spectrum – it is a good feeling and a news-worthy story to hand a cheque out to a local charity, or allow staff volunteering days. You assume that the charity and the staff will be able to do good things with the money or time. This can be a great way to develop your employees, build team working and help them feel engaged with the local community, but it doesn’t give you a business strategy to build on.

These benevolent approaches often have little vision, or clear direction, which means identifying their ‘value’ becomes harder, and why often executives see little clear benefit in CSR or what it is achieving.

Products that are good for People, are good for Society, and are also likely to be good for Business

The first thing a Board must be clear on is what it is trying to achieve as a business, or even what it is trying to distance itself from.  It may be that you are picking up feedback or on consumer trends such as the growing awareness around food welfare, future resource scarcity, single use plastics or other sector specific issues and you want to reassure your customers that they can trust you.

The first thing a Board must be clear on is what it is trying to achieve as a business, or even what it is trying to distance itself from.

The next step is to build the conversation around what difference you would like to make, where you wish to position the company, and to investigate what strategic options deliver on that aim. Smart CSR is about using the power of business to improve the world, in a way that safeguards or enhances your long-term corporate interests. It doesn’t hurt a business to have “something else” in its brand locker that helps you stand out from your competitors, or to be have seen to have taken early steps in advance of crisis.

The best CSR programmes are ones that can relate back easily to your business. Used strategically internally or externally CSR helps organisational leaders and their teams engage in big picture thinking. Not only will being involved in CSR help boardroom dynamics – it forces people to come out from their power silos and think collectively as a group in terms of wider organisational sustainability, governance and brand reputation issues. It also helps executives link financial & non-financial intangibles with long-term growth and market sector issues.

As for the Finance Director, his parting shot after we had discussed my past experiences of working in the energy sector.

‘Did Enron have a CSR policy?’

‘Yes, and it was clear when I worked with them on a co-venture with ScottishPower that they didn’t follow it!’

‘We don’t want to be an Enron or a 2SFG (an earlier food processing firm scandal)

No idea where to start with your CSR strategy? Give us a call, we help businesses develop smart CSR strategies that are strategically aligned with their business goals.

This article updates an earlier Linked in post

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