Corporate Social Responsibility is all about treating all key stakeholders responsibly. In India CSR has been narrowly viewed to 2% of large company profits to give to charity. Useful, but mistaken in my opinion as CSR is much, much wider than that.
One can be very cynical about large and medium sized businesses not adopting socially responsible behaviour. But alongside examples of irresponsible behaviour there are many examples of exemplary conduct. For instance, the corporate world is not immune to caring about health issues, including pandemics. Most notably, Bill Gates produced a video in 2015 on the need to do much more – see:
He, as in his own business, was prescient and warned then that a virus could affect millions of people. But despite his wealth, fame and leadership with his own money, he was basically ignored. Why is it that people who see into the future with solid arguments about potential highly risky outcomes are ignored? Why do people only react when disaster is at their doorstep?
Social responsibility by both the private and public sectors was clearly lacking as far as preventing the Covid-19 phenomenon is concerned. Almost all organisations could have done much more, and we write now in the hope that everyone (including politicians) can think very seriously about their social responsibilities, work together, and protect employees, customers and the community at large… as more and more are already doing.
Social responsibility is also crucial in public sector behaviour. For instance, in my own country, the UK, the tragedy of Brexit is still unfolding, albeit now mostly forgotten. Yet the steady hand of the UK would have been much appreciated in Europe as the virus disaster unfolds. There, as in India, climate change is on everybody’s list of strategic concerns. Yet see how America irresponsibly withdrew from the Paris Agreement on Climate Change.
CSR is becoming more and more accepted, encompassing not simply private organisations, as the link with distribution of a basic income shows. The private sector cannot ignore this issue, which is becoming increasingly accepted as needed, in India as in many other countries.
There is no doubt that the private sector at all levels is suffering deeply. Just about all large private companies would have spent a small fortune to prevent today’s disaster. But what could they have done? Well, we saw Bill Gates’ advocacy, but we witnessed the general lack of focus on preventive healthcare. Now however, in India we are seeing many private sector organisations and individuals showing exceptional generosity.
Today, with the Covid-19 virus spreading, there is even more need for socially responsible leadership – from both the private and the public sectors. As co-founder of the recently established Institute for Responsible Leadership (https://responsible-leadership.org/ ) I have been advocating this for some time and as stated above, responsible leadership means treating all stakeholders responsibly… and equally for stakeholders to use their power responsibly.
Let’s look at these stakeholders and see how a company can treat each one responsibly (which many in India already are):
Board members – Provide advice and support to management and, especially in the case of CSR, it is often the independent directors who take a longer term view and understand that a short-term focus on profit-making at any cost can ruin an organisation’s reputation and sustainability.
CEOs – Appoint a task force to advise them on the main hits to the company and what to do. These are company profits, its reputation on what it does to the local community or country, how to cope with the pandemic among staff, business and likely futures.
All leaders – Treat subordinates responsibly and fairly, putting themselves in the subordinates’ position.
Shareholders – Keep investing if the company is helping to reduce the Covid-19 risks, also taking the ling-term view.
Employees – Keep management informed of issues, both at the workplace and at home, especially if working from home.
Suppliers – Ensure personal availability and explain delivery difficulties.
Community – Accept donations gracefully and try and keep donors informed of problems and successes; notify company of any corrupt practices, and generate community leadership.
Government – Organise companies into groups that work together so as not to duplicate, and ensure key issues are being addressed without waste (as Tata for instance as well as many organisations are doing).
Media and Social Media evidence – based journalism is vital in times of crisis, avoiding false accusations of companies and promoting the good ones. Plus messaging promoting responsible behaviour and social cohesion.
The Environment – A plus here, as cities reduce sharply pollution, while lack of movement in forests and rural areas allows many species to recover.
Finally, the results from our CSR Rating App (that can be downloaded on all mobile phones) show that most large private companies have a higher CSR rating than most public institutions – including the United Nations. More and more companies are realising that multi-stakeholder capitalism is more praiseworthy and more profitable than merely focusing upon immediate shareholder value. In these times of lack of confidence in most of our public sector leaders around the world, that bodes well for the future of our society and the planet.
Author : Dr. Michael Hopkins FRSA (Geneva, London, Nairobi)
CEO – CSR & Financial Institute , UK & Co-Founder – Institute of Responsible Leadership