Imperatives of CSR to Corporate Success

WE live in an increasingly complex and sceptical global village where corporate scandals, stock market downturns, uncertain economies, threats of terrorism are constantly creating diminished trust in the corporate sector and its leaders.

It is therefore pertinent that the corporate world needs to address these anxieties individually by demonstrating their positive impacts on society and collectively developing systems for measuring the progress made in this direction. Corporate Responsibility is not just another cliche, but an essential tool in today’s business.

Corporate social responsibility (CSR) is therefore, inevitably, the way of the future. The increasing interest and discourse about CSR has necessitate proper understanding of its promotion and efficient practise.

For long, reports and investigations have shown how corporate organisations have circumvented this principle. But, that is not to say that some organisations are not observing it. But larger percentage of organisations tend to deviate from this principle.

Nonetheless, as CSR becomes an imperative shareholders, the customers, the employees and all stakeholders in general are becoming more demanding, and the standards for social interaction are rising.

It is expected that corporate leaders see strong link between the drivers of long term business success and their objectives for CSR, in which the benefits or having a well designed CSR strategy cannot be overemphasised especially now that stakeholders in general are conscious of the impact that the activities of the business is having on the community, the environment and the employees.

The triple bottom line approach should be what successful companies adopt to make their organisation fully compliant with social responsibility issues, while still doing good businesses.

According to Adewale Philips of Skyhigh Consulting at a recent Forum on CSR in Nigeria organised by BusinessDay and Skyhigh Consulting (UK) in Lagos, said a fast establishing trend in the business world is the evolution of CSR packages by multinationals and other corporate bodies. He said that this was far cry from public perception of the adverse effect of day to day business activities of the companies, how it affected the environment, economy and the lives of the host communities.

Philips said that CSR is seen as a set of standards to which a company subscribes in order to make its impact on society felt. He added that it has the potential to contribute to sustainable development, poverty reduction catering for the vulnerable and senior citizens as well as contribute to national economy and private enterprise.

Philips, whose paper was titled: “The Hypocrisy of Corporate Social Responsibility”, pointed out that the potential of CSR to contribute to sustainable development in recent times was fast becoming eroded by vagrant abuse of social responsibility and exposure of the environment in the scramble for maximising profits.

“From oil multinationals like Royal Dutch Shell in the restive Niger Delta region of Nigeria, Telecommunications giant MTN Nigeria Limited, drug maker Pfizer down to the consolidated banking sector. It has become a vogue to engage in highly publicised charitable and philanthropic ventures as an act of Corporate Social Responsibility (CSR) to placate the abused public.

“Multinationals, after one another, sign agreements with indigenous government without deference to the immediate host communities. This is what informed the variously protracted restiveness of the oil rich Niger Delta. And Shell for decades has violated environmental rules at the detriment of the host communities in Ogoni land as well as being accomplices in the brutal violation of human rights in these communities by successive civilian and military governments.”

He said that Shell through its subsidiary Shell Petroleum Development Company (SPDE) of Nigeria embarked on series of CSR ventures to placate the restive host communities. These include building of classroom blocks, boreholes, roads and some level of employment generation and scholarships to selected students from the host communities.

According to him, these were however, perceived by the people as a pin in the haystack in comparison to the huge take home revenues of the multinationals, serving as a shield against various cases of resources exploitation and complicity of the multinationals in human rights violation, thriving on the ethnic disputes, resources control tussle between host communities and the Federal Government.

The Skyhigh Consulting official said that stakeholders in the business community were concerned with how they were perceived by their host communities and how they projected their corporate success on the scale of social crusade on contributors to social development and economic enhancement partners.

He said that CSR activities had gained momentum, but stressed that this however was grossly abused by the maximum profit oriented multinationals as a covering to the neglect and under payments in their host communities.

“While not neglecting the complicity and irresponsibility of government in the short changing of the host communities, the multinationals must stop paying lip services but redefine true corporate social responsibility with human face consistent with global standards. The recent settlement of victims by drug giant, Pfizer International Incorporated, in a law suit over the ill-fated Tovan antibiotics experiment on children during a meningitis outbreak in Kano State is another abuse of Corporate Social Responsibility (CSR). The company and the concerned parties agreed to settlement of $75 million. A Pfizer spokesman was quoted by the Associated Press on July 29, 2009 affirmed that Pfizer stood by the 1996 study it conducted with the approval of the Nigerian government that consent of the participants parents or guardians was taken and that the study was consistent with Nigerian’s laws. While this however does not exonerate Pfizer, it is an indictment on the government as an accomplice since they failed innocent victims in the discharge of the public fiscal responsibility to the citizenry as enshined in the Fiscal Responsibility Act 2007. By not checking for facts and figures on the risk of such an unprecedented experiment to this innocent children, it is a gross abuse of social/justice both from the multinational and the government.”

He said that to advance the smooth course of CSR in the country, the need to adopt the “Tripple Bottom Line”: Make profit, care for the environment and uphold social justice, while the Federal Government struggles to deliver on security to private enterprises, good governance to the citizenry and its other commitments to its multinational parties. He said it behoves the multinationals to stop using double standard on prevention of oil spillage, gas flaring eradication timeline and fair dealings with labour unions in their business dealings.

Lending credence to Philip’s claims, former Vice Chancellor of the Obafemi Awolowo University (OAU), Ile-Ife, Prof. Wale Omole said that there was need to do a lot of re-thinking about CSR in Nigeria. He stressed that truly, people were yet to come to terms with it or understand its importance for economic development and growth.

Omole, who was the chairman at another CSR function tagged: “Stakeholders’ workshop on Corporate Social Responsibility”, also in Lagos said that the practice in other countries would not work in Nigeria because of the complexity and plethora of issues on ground in the country.

He noted that the term corporate had been narrowed down to companies alone in Nigeria, stressing that the word “corporate” did not exclude the government.

According to the former OAU VC, a holistic approach was sacrosanct to sustenance of true Corporate Social Responsibility (CSR) in our society. He said that government must create the enabling social and business environment by aggressively tackling the issues of security, power and poverty by formulating laws with strong adherence as well as delivery on electoral mandate to the people.

“Nigeria is a blessed country with abundance of resources both human and materials. All that is required is to ensure a holistic utilisation of all these for the benefits of all.

“The issue of CSR is a national thing. There must be a peaceful environment that would foster faster development from business organisations both in the corporate world and the government itself,” he stated.

Presenting a paper titled: “The relevance of standard in CSR” at the event, the Director General of Standard Organisation of Nigeria (SON), Dr. John Akanya said that CRS was a concept that had evolved over the years, but at its core, it was not necessarily a recent phenomenon. He stressed that it usually connotes big multi-national companies in terms of patronage of those whom their success came from, the need to protect the environment, which provides the framework for the business to operate.

Akanya represented at the event by a Director in the organisation, Mr. Robert Okie tried to make a distinction between CRS and SR. He said that whereas social responsibility as an evolving terminology, not centred on philanthropic activities such as giving to charity, subjects such as Labour practices, fair operating practices, human rights, environment and consumer protection over time had received greater attention, but that in CSR, it tends to open up ways to identify truly with the society.

The SON DG noted that CSR must be guided by standards, stressing that standardisation was a process of formulating and applying rules for orderly approach to a specific product or service.

He explained that social responsibility was guided by ISO 26000 with four basic principles of openness, transparency, consensus and relevant technical knowledge.

According to Akanya, the great challenge was how to make them applicable to all organisations on an international scale, adding that organisations on an international scale needed to identify what was relevant and significant to address through its own considerations and through dialogue with stakeholders.

In her own presentation, titled “NMC and the promotion of CSR in Nigeria, the Director General, Consumer Protection Council, Mrs. Ify Umenyi said that the essence of the ISO 26000 Guidance standard on social responsibility would include among others, assist organisations to move from good intention to good actions, that it would be distillation of international expertise on social responsibility and so on.

Presenting a paper on the assessment of CSR in Nigeria, the Managing Director of New Nigeria Foundation, organisers of the event, Prof. Femi Ajibola said that CSR was an obligation of a corporate entity to get practically involved in social responsibility activities that would improve the lot of society and the organisation image.

According to him international consensus categorises CSR into seven broad issues including, community involvement and development, organisational governance, human rights, labour practices, fair operating practices, consumer issues and environment.

In the CSR study and findings conducted in Nigeria between 1999-2005, Ajibola said that there were limited impact of CSR activities because no clearly stated CSR policies, objectives and strategies, little attempt at ensuring effectiveness and efficiency, no standard process for identifying projects and beneficiaries, little attempt made at collaboration with others, no alignment with government plans/strategies and lack of focus and sustainability.

However, according to Skyhigh Consulting, a CSR Consultants, with a growing emphasis on CSR reporting by both the financial community and the public growing from 26 such reports in 1992 to more than 3000 in 2008 according to CorporateRegister.com, it is becoming increasingly important for companies to provide comprehensive reports particularly for those industries that directly impact the environment, and such could be influence through stakeholders engagement, because they have got the ability to influence the success or failure of the business at various level.



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