In the past 2-3 decades Corporate Social
Responsibility (CSR) has been a buzz word in the corporate sector, widely
perceived as ways of improving one’s image through helping the community.
But is CSR practised the way it should
be? This is a debate that has gone on for a long time and in the process
clouded the ‘real’ CSR. More and more, Sri Lankan corporates are using CSR as a
means to enhance the image and show the public that they are good corporate
citizens through these ‘projects’ while on the other hand resorting to devious
ways in acquiring profit.
In a sense, the CSR ‘profusely and
diligently’ undertaken by some companies is aimed at whitewashing ‘bad’ deeds
particularly in business practices. This column has repeatedly spoken out on
the merits and demerits of CSR, the good-the-bad-and-the-ugly side of it.
This troubled ‘value-for-money’ kind of
CSR was also recently referred to by a visiting global expert, CSR
International founder Prof. Wayne Visser when he told an audience in Colombo
that businesses should not use CSR for image building exercises and winning
awards.
“… you shouldn’t be reporting for
public relations, but companies unfortunately do it for that,” he was quoted as
saying in one newspaper.
He had said that some companies “still
use CSR as a means to defend themselves for their unethical business practices,
much like the Lehman Brothers which won two CSR awards, but was instrumental in
the unfolding of the 2008 financial crises”. He was also critical of companies
using charity as a tool for CSR whereas charity is ingrained in Sri Lankan
society through ages-old philanthropy.
Philanthropy and CSR are two different
things altogether. The first one seeks to help society without an return (other
than sometimes to acquire merit for an individual) while the other is, and
should be, in practising good governance, honest business practices and living
in harmony with the environment and the community.
There are many examples to show how
corporates deceive the public in pretending to do good, donate lavishly to the
community and get a lot of publicity out of it. Quite a few are companies that
have dubious records but through CSR projects which get more publicity that
they deserve through the media, are able to impress an often, gullible public.
There are 3-4 forms of CSR that is
practiced in Sri Lanka. They are (not in any order):
a) Donations to communities like school
buildings, computer labs, water services, etc; b) working with the community to
improve services, provide jobs and be part of the village development; c)
working with the communities in building capacity and other needs but without
seeking publicity or public attention as a public gimmick; and d) social
responsibility projects to enhance annual reports, impress shareholders and
investors.
The most effective and honest form of
CSR that is widely practised abroad is in building a business on fundamentals
like governance structures, transparency, working with communities in towns and
villages where the company has a presence, proper waste management and water
usage, and sharing of resources in developing village economies … while making
profits.
The phrase ‘charity begins at home’
should be a ‘must-do’ in the corporate world. Employers, their families and
other stakeholders including village communities must be part of the success of
a company. A recent example reported in the Business Times showed how a
garments-related factory worked with the village to erase some earlier negative
issues and won their confidence. The management even went to the extent of
sharing, often-considered, confidential information – like orders at hand and
revenues – with the workers.
There are quite a few Sri Lankan
companies whose responsibility extends to many projects initiated with
communities to ensure that economic benefits and profits from factories seep
down to the village, and in the process remain silent about these noble
efforts. These in fact deserve publicity and are a lesson to others on how
‘real’ CSR works; not a couple of digits on a balance sheet or perceived as a
rate of return in cash-flow terms.
On the other hand there are companies
which seek publicity far more than merited for even small donations. Such
devious initiatives are made worse when press releases diligently carry the
full names and accurate designations of company officials handing over or
involved in the process while the recipients, often a principal or teacher of a
school, or a village leader is addressed without proper initials or
designations. There is a lackadaisical approach by companies in the importance
given to the recipients when seeking publicity. This is happening more
frequently today when the media receives these ‘doing good’ press releases.
While caring for one’s employees’ is a
sacred part of social responsibility, there are examples of how some companies
arrogantly and virtually cheat their way through to win awards on the pretext
of caring for their workers. The Business Times reported one such instance a
couple of years ago where the Sri Lanka unit of a global company sought a lot
of publicity after winning a regional award for the ‘best human resource
practices in Asia’. Hidden in its application was the fact that the institution
was going downhill, virtually bankrupt and where employees had been told to
find other jobs.
Eventually the unit was bought over by
another giant in the same field. How on earth can you win an award for best HR
practices when the company is near closure with workers losing their jobs? In a
more advanced society, such an institution would have been hauled for cheating
and penalised with the organisers of the event also taken to task. In Sri
Lanka, companies get away with any misdeed given their influence over society,
the media and mainstream political parties.
Despite the talk of good governance and
accountability, the powerful commerce and trade chambers are fighting shy of
cracking the whip on such errant organisations which mislead the public. Often
this is because they themselves are guilty of wrongdoing in this arena or
believe that such practices are part of the corporate culture.
It is hoped that the new CSR body, CSR
Lanka (Guarantee) Ltd under the aegis of the Ceylon Chamber of Commerce will
show the way in ‘real’ CSR and crack the whip even if a few of its own members
are guilty of deceit.
-Business Times
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