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Companies must do more than show up

By Mark Brownlie, Business Edge
September 05, 2008

Forgive me if I sound a tad jaded, but I find it disingenuous when companies profess corporate citizenship, when in reality they are merely doing things they have to do.

Companies shouldn't get credit for just showing up.

In a rush to claim corporate social responsibility (CSR) and the moral high ground (article found here), many companies are fishing for credit for activities that are necessary simply to exist. Companies make statements in articles or ads trumpeting their contributions to society because they pay taxes and employ people. But you'll see the worst grasping for reputation in certain corporate social responsibility reports.

Should I act surprised when a company's report declares with a hint of pride that it employs community residents, purchases goods and services, and stays in compliance with environmental regulations?

The last time I checked, these are basic expectations. To achieve real corporate leadership and social responsibility a company needs to move from the consequences of its very existence to something more.

Of course a company needs to hire and pay people to reach its objectives. However, a leading company creates long-lasting, challenging, safe and rewarding jobs. It actually pays people fairly and develops its employees. It backs up its platitude of hiring "the best and the brightest" with discussion in its CSR report about how it's working to employ under-represented populations.

In the community, a leading company doesn't just cut cheques for charities, but targets contributions to address needs, build community capacity and achieve maximum measurable impact. Although it's commendable, practically every company supports United Way; so if a company is pronouncing leadership it should tell a unique story.

In most jurisdictions, companies are required to consult the public on new projects and ongoing operations. A leader engages stakeholders more broadly in joint decision-making; sometimes even establishing ongoing community advisory panels.

Instead of informing the public that it buys considerable goods and services, a leader explains how it buys locally, or from minority-owned businesses, or based on a purchasing policy that requires suppliers to have good environmental, safety, ethical and human-rights programs and records. On the environmental front, most companies state that they are striving to minimize their negative impacts on air, water, land and wildlife. A leader goes beyond voicing vague aspirations and sets quantifiable performance targets. And those targets are for greater improvements than would have occurred anyway due to the natural turnover of equipment and upgrades to processes.

In addition to tackling the impacts of its own operations, a true environmental leader assesses and addresses the impacts of its products throughout their lifecycle, including their transportation, use and ultimate disposal.

Leadership means taking steps past adopting policy commitments to human rights and ethical business conduct. It involves implementing training, monitoring and reporting mechanisms to ensure the company is actually living up to those commitments. It is always important for a company to maintain sound financials; however, the financial side of corporate responsibility goes beyond sales and profits. A leader makes sure its defined benefit pension plan is fully funded. It actually pays taxes instead of sending its lawyers to court to try to avoid them. It creates shareholder value over the long term, not just for one or two exciting quarters. And it explains how it distributes the wealth it generates - not like some socialist state, but to its various stakeholders like investors, suppliers, employees, governments and others.

A company that is committed to leadership and social responsibility will develop and work towards a vision for how it can contribute to the sustained well-being of society.

It might even consider implementing transformative rather than incremental change. It doesn't pursue the field just to get credit for good deeds.

I'm not suggesting that companies should assume the role of government and provide social, educational, health or other public services. But real leaders move from a mentality of "do no harm" to "do some good". As Winston Churchill said: "The price of greatness is responsibility."

(Mark Brownlie is chief executive of Responsibility Matters Inc., a Calgary-based advisory firm helping companies and non-profits with sustainability strategies and communications.)

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