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Social Responsibility: Whose Business Is It?

By Tom Watson on December 6, 2006No Comment

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Social Responsibility:  Whose Business Is It?
By: Carolyn Cavicchio, 12/7/06


Are corporate citizenship and sustainability important to business?  Yes, say a majority of leaders of global businesses who were recently polled by The Conference Board.  But these same companies also lack an active strategy to develop new business opportunities arising from meeting citizenship and sustainability needs. 

This divide between attitude and actual business practice was one of the topics of a
Reuters panel debate, co-hosted by The Conference Board and the Corporate Social Responsibility Initiative at Harvard University.  In a fairly lively debate, business and media leaders staked out their positions.

The role of the business in society was teed up first.  Sam DiPiazza, CEO of PricewaterhouseCoopers International Limited, believes that the role of business is to sell ever increasing numbers of products to ever increasing numbers of people, at ever better prices.   When asked about the role of business in society, he agreed that behaving in a responsible manner must be part of any business’s plan, but that this is not accomplished through philanthropy and volunteerism but through making products and at the same time making society better.

Niall Fitzgerald, Chairman of Reuters, sounded a similar note.  Speaking on behalf of business leaders, he stated:  “We have a responsibility as key participants in business to demonstrate that business can behave well.  Andrew Carnegie would have done better to treat his employees and the community well, rather than exploiting them; this would have been better for society than all of the philanthropy he engaged in later in life to salve his conscience.”

Fitzgerald also found use of the term CSR “troubling…it implies that it’s an add on.  But if it isn’t central to the business strategy, not at the heart of your business, it won’t get done.”  He used the example of Unilever (of which he was Chairman and CEO) and its support of the Marine Stewardship Council.  “This wasn’t just something we did because it was good for the environment.  If fish runs out, we don’t have a business.  No fish, no fish fingers!”

Journalist Clive Crook went a bit further:  “Capitalism without CSR is seen as a bad thing, yet capitalism before anyone ever thought of CSR has been the greatest driver of social change and improvement.”

Doug Bauer of Rockefeller Philanthropy Advisors was challenged to define philanthropy: is it or is it not CSR?  “It’s a part of CSR, and many companies lead with philanthropy.  But CSR is a combination of philanthropy, transparency, and business practices.  It’s more of an art than a science you’re asking for a lot of different disciplines to be rolled up in one package, and this is difficult.”

Are there differences between public and private companies, when it comes to CSR?  Yes, said Peter Knight, President of Generation Investment Management and former chief-of-staff to Al Gore.  “There’s a real war going on, a battle against ‘short-termism.’  The focus on quarter-to-quarter returns works against sustainability.  Private companies can take a longer-term view, because they’re not subject to the quarterly pressures of the market.  We need to move public companies in this direction.”

“The best approach is to do your business in the most responsible manner possible then everything else will follow,” commented Fitzgerald.  “But if your focus is to be very philanthropic, and then hope that you’ll be forgiven for business failures because you’re seen as philanthropic, you’re wrong.  CSR needs to be meaningful to your employees and what they do everyday in their jobs.  If you can’t make it simple and meaningful, then you won’t succeed.”

The debate was summed up well by Clive Cook:  “We’re not really talking about CSR it really just comes down to good management.”

To view the webcast and online discussion:  www.reuters.com/csrnewsmaker

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