Corporate Social Responsibility A Broader View

Providing a clear definition for corporate social responsibility (CSR) is gradually becoming a subject for argument as corporations deem most government’s policies on CSR to be a form of shirking their responsibility while the government on the other hand sees companies – especially multinational corporations as not doing enough for the environment where their businesses operate.  The debate on CSR started as far back as the 20^th century and there are still arguments over the clear definition of what CSR is and what it should entail.

CSR is more of a morale issue which corporate organizations are expected to take on without undue pressure from government and others.

According to the department of Trade and Industry in the United Kingdom, CSR represents the integrity with which a company governs itself, fulfills its mission, lives by its values, engages with its stakeholders, measures its impact and reports on its activities.”

The World Business Council for Sustainable Development defines CSR as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large."

The International Finance Corporation (IFC) defines CSR as “the commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development."

CSR is the duty that corporations are expected to willingly perform in the environment where their business operates; in simple terms, it is a responsible way of doing business. Corporations should not be compelled under normal situations to perform these duties however time and again many companies have shown reason why they must be put under pressure to make them take up one form of CSR or the other. Pressure is normally mounted on companies by government, the media, consumer advocacy groups and other civil societies to make corporations conduct sustainable business practices.

Globalization has greatly empowered companies while placing developing countries in a very vulnerable position to the extent that the CSR policies which multinational companies operate in developed countries like the USA are quite different from what obtains in a country like Nigeria.  Activities of consumer interest groups, the media and the government have to a large extent checked the tendency of multinational as well a local companies to deplete and degrade the environment without any thought development of the community or for the safe and hygienic survival of members of the community.

Several years ago, a certain Mr. Nana of Koko a small village near Warri was paid by unknown persons to store in his compound some drums of substances that comprehensive laboratory analysis later proved to be harmful chemicals. Not much care was applied in the disposal of condemned chemicals or equipment that have become useless or for general industrial waste and this is a menace that most third world countries are made to endure by large corporations doing business in their communities. The issue of degradation of the environment is a very sensitive one which further necessitates companies to be actively involved in CSR.  People take a lot more interest in the activities of companies especially as it affects the environment and for this reason, a lot of companies have come to appreciate the need for them to put in place policies that will promote protection of the environment as their fundamental corporate value. Where the government has failed to enforce careful and considerate disposal of industrial waste, the people and civil societies as well as the media are left with very little power to enforce these policies. It becomes clear why it is a moral issue for corporations to actively participate in CSR.

 CSR includes performing duties such as providing safe and conducive working conditions for employees, making contributions to social groups and charities with the community, taking adequate care to protect the environment from pollution resulting from their operations, providing scholarships and education grants to deserving students and also sponsoring education awards or a chair in institutions of higher learning within their business locality. There are very many other ways by which corporations can offer CSR in developing countries especially with the peculiar way in which government fails in carrying out much of its duty in providing basic amenities and infrastructure for communities.

While many multinational corporations have gone as far as constructing and furnishing health centers and schools for communities, many companies have simply gone ahead with their business without any tangible contribution to the improvement of their host communities. Probing among some of these companies revealed that certain members of the communities have called to demand and have been paid in cash what should or could have been expended on the development of the community.

There is a particularly nauseating stench (some stale or rancid type of cooking fat) that hits one’s nostrils as an eatery, hotel or restaurant is sighted; it has become one of the quickest ways of recognizing that there is such facility in the neighbourhood. It is expected that the management of such companies would take necessary steps to rid the environment of such ugly odour that comes from their activities in the locality as a CSR initiative.  Most of these companies relate with government officials and would not want to discuss with members of the community on the excuse that they have been heavily taxed and certain members of the community (usually government officials) have collected everything they had earmarked for CSR. This is quite a peculiar way to develop the community as no form of development is evident.

Companies that are active in the area of CSR benefit in that their participation will show their interest in improving the lives of their employees, consumers of their brands and the environment. Active CSR also puts the corporation in the position of an economically stable one enough to attract and retain employees and customers. In addition, such companies are able to establish the reputation for integrity and best practices among members of the community as well as their employees.

Companies are also now expected to perform well in areas like human rights, business ethics, environmental policies, corporate contributions, community development, corporate governance and workplace issues. A lot of human rights issues which have been arisen in corporate organizations are traced to corruption in the form of indigenes receiving cash gifts from management and to a large extent, such companies take advantage of the people.

“Governments may derive greater developmental benefits from CSR where there is a national strategy framework which explicitly recognizes its potential contribution and seeks to align CSR with development goals. Foreign investors bring with them expertise on CSR that could be tapped more effectively to strengthen domestic capabilities; contractual arrangements and public-private partnerships are two ways of doing so.”(Innovation Briefs of United Nations Department of Economic and Social Affairs Division for Sustainable Development)

What obtains in Nigeria and many other developing countries is that multinational corporations are believed not to be doing enough for their host communities in that they undertake CSR initiatives that are very poor compared to what they give in rich countries. CSR is an opportunity for the government and the community to secure steps in sustainable development and every care must be taken to ensure that what is being offered is meaningful without necessarily laying too much of an administrative burden on the corporations.

By virtue of the fact that meaningful and active CSR will be beneficial to company, employee, government and the society it will be good for CSR to be approached as a fundamental corporate value of the company rather than as a means of exploiting the community as a whole. It is all about being responsible without the need for added pressure being mounted from authorities.