In search of a clearer conscience

Simon
Webley, research director of the Institute of Business Ethics, talks to Stephen
Overell about the corporate challenge of social responsibility

Is
there a standard for companies to strive towards to earn the label
"socially responsible"?

All
the determination in the world will never find a definition of corporate social
responsibility (CSR) that is right for all companies at all times. There is no
quick answer. Companies must consider for themselves what CSR means and take
steps towards it.

There
are now a number of different guidelines in operation that give useful
descriptions of what it means. For example, the FTSE4Good index
(www.ftse4good.com) sets down criteria on the environment, human rights and
social issues, including stakeholder relations.

Or
there are the new pension regulations that specify how the trustees of pension
funds should take into account the attitudes of companies on environmental,
social and ethical areas.

There
is also the GoodCorporation badge, which has a 21-point charter, but the point
is that it is subjective. There is no agreed definition for CSR.

How
does CSR relate to the law? Does doing the legal minimum mean you are behaving
in a socially responsible manner?

No.
The law is a separate issue. If you look at it as an analogy, a person who
keeps the law is law-abiding, but it does not necessarily make him a good
citizen.

Doing
what the law says is not enough, as CSR is over and above the law. A business
could argue that it is helping a community by providing employment and paying wages,
but I would say that is not the same.

Business
has a responsibility to abide by the law, but my feeling is that there has to
be a subset of responsibilities that go beyond the law.

Is
it more about corporate culture, then?

The
culture of a corporation is certainly crucial in this area. A business wants to
instil in its culture the idea that the employer does not just do the minimum.

It
would, for example, take into account the work-life balance issue ñ it would be
seen as an employer of choice because of its culture. People would truly be
seen and treated as an asset to be developed and made more employable.

In
annual appraisals, the question should be for all jobs, "How can we help
you do a task better?" Companies have to be imaginative.

Is
CSR typically treated as an HR issue?

The
evidence so far would suggest that is not really the case. According to a
survey we did of companies that already have codes of behaviour on CSR, HR only
took responsibility in about 10 per cent of companies.

Mostly
CSR is delegated from the CEO’s office to the company secretary function. In 10
per cent of organisations it belongs to the internal audit function and in 12
per cent it belongs to the board or the CEO. HR taking on the CSR agenda is
comparatively rare.

Is
having a code of CSR important, or is it often just a lot of words that people
don’t take seriously?

Codes
are certainly very important. Companies tend to have a mixture of values
statements, mission statements and codes of conduct. The code is more detailed
than the others and acts as a guide for how the values apply.

It
is vital for both internal staff and external suppliers to know what is
expected of them ñ for instance, in giving and receiving gifts, on
whistle-blowing or bullying.

A
code is one indication that a company takes its values seriously. According to
our research seven out of 10 companies have them.

Does
it matter if CSR is driven by anxiety over reputation or passionate personal
commitment?

The
current driver of the issue is fear. But that said, the negative drivers are
often seen as having a positive effect.

Companies
with stated policies on CSR say that people like working for a company that
does have specified standards.

You
will, however, get a more sustained commitment if it comes from the leadership
of a company that feels it is an important part of the business. I do not
really mind why they start [on CSR] as long as the commitment is sustained and
not short-lived.

Who
sets the standards on CSR?

In
the end, a business has to decide for itself what standards of CSR it wants to
follow.

Non-governmental
organisations and the media are important in bringing certain issues to public
attention, and if business is sensible it will listen to them carefully. But in
the end business has to make up its own mind. CSR is not something that is
clearly agreed on, so the question remains, if it is worthwhile in individual
instances.

Is
CSR good for business?

There
is no such thing as painless ethics. A consistent programme will mean choices
that may well make you a loser in the short term. But in the long term you may
be more likely to remain in business if you take the issue seriously to
maintain your integrity.

Ideally
of course, CSR is mutually beneficial for all parties. I read of one scheme
recently where Transco agreed to give £5 to Mencap for each instance that a
health and safety problem was reported. Accidents went down and Mencap’s income
went up. That is my idea of a beautifully integrated CSR agenda.

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