Professional Documents
Culture Documents
The following is an overview of the key trends and business drivers for
fostering this CSR-HR connection, followed by a proposed roadmap or
pathway for human resource leaders seeking to make a substantial
contribution to sustainability, CSR and their firm’s business goals.
CORPORATE SOCIAL RESPONSIBILITY
CSR covers all aspects of corporate governance. It is about how companies conduct
their business in an ethical way, taking account of their impact economically, socially,
environmentally and in terms of human rights. This moves beyond traditional business
stakeholders such as shareholders or local suppliers. CSR includes social partners
such as local communities, and global responsibilities such as protecting the
environment and ensuring good labor standards in overseas suppliers. CSR also
includes relationships with employees and customers. It inevitably involves working in
partnership with other organizations or groups. It can be seen as a form of strategic
management, encouraging the organization to scan the horizon and think laterally
about how its relationships will contribute long-term to its bottom line in a constantly
changing world.
What does it mean? Corporate social responsibility (CSR) is an expression used to
describe what some see as a company’s obligation to be sensitive to the needs of all of
the stakeholders in its business operations. A company’s stakeholders are all those who
are influenced by, or can influence, a company’s decisions and actions. These can include
(but are not limited to): employees, customers, suppliers, community organizations,
subsidiaries and affiliates, joint venture partners, local neighborhoods, investors, and
shareholders (or a sole owner ). One of the most frequently asked questions for all those
individuals and organisations dealing with CSR issues is the obvious - just what does
"Corporate Social Responsibility" mean anyway? Is it a stalking horse for an anti-
corporate agenda? Something which, like original sin, you can never escape? Or what?
Different organisations have framed different definitions - although there is considerable
common ground between them. I believe CSR is about how companies manage the
business processes to produce an overall positive impact on society. Companies need to
answer to two aspects of their operations. 1. The quality of their management - both in
terms of people and processes (the inner circle). 2. The nature of, and quantity of their
impact on society in the various areas. Outside stakeholders are taking an increasing
interest in the activity of the company. Most look to the outer circle - what the company
has actually done, good or bad, in terms of its products and services, in terms of its
impact on the environment and on local communities, or in how it treats and develops its
workforce. Out of the various stakeholders, it is financial analysts who are predominantly
focused - as well as past financial performance - on quality of management as an
indicator of likely future performance.
Other definitions The World Business Council for Sustainable Development in its
publication "Making Good Business Sense" by Lord Holme and Richard Watts, used the
following definition. "Corporate Social Responsibility is the continuing commitment by
business to behave ethically and contribute to economic development while improving the
quality of life of the workforce and their families as well as of the local community and
society at large" The same report gave some evidence of the different perceptions of what
this should mean from a number of different societies across the world. Definitions as
different as "CSR is about capacity building for sustainable livelihoods. It respects cultural
differences and finds the business opportunities in building the skills of employees, the
community and the government" from Ghana, through to "CSR is about business giving
back to society" from the Phillipines. Traditionally in the United States, CSR has been
defined much more in terms of a philanphropic model. Companies make profits,
unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share
of the profits to charitable causes. It is seen as tainting the act for the company to receive
any benefit from the giving. The European model is much more focused on operating the
core business in a socially responsible way, complemented by investment in communities
for solid business case reasons. Personally, I believe this model is more sustainable
because: Social responsibility becomes an integral part of the wealth creation process -
which if managed properly should enhance the competitiveness of business and maximise
the value of wealth creation to society. When times get hard, there is the incentive to
practice CSR more and better - if it is a philanphropic exercise which is peripheral to the
main business, it will always be the first thing to go when push comes to shove. But as
with any process based on the collective activities of communities of human beings (as
companies are) there is no "one size fits all". In different countries, there will be different
priorities, and values that will shape how business act.
CSR is an issue in which we all have a stake. Our actions today will influence the lives
of future generations through for example, trying to protect the environment. It is
changing the way business is done. Being proactive about CSR will increasingly
provide a competitive advantage both externally through protecting company reputation
and the accompanying publicity, and internally through employee engagement. To
really ‘do’ CSR businesses need to accept that they don’t exist in a vacuum but operate
in a wider community that has an impact on their, and others, futures. When CSR is
done well, it means a precious, though precarious, trust in the business. Successful
CSR can bring benefits such as a distinct position in the marketplace, protecting the
employer brand, and building credibility and trust with current and potential customers
and employees. It can help significantly with recruitment, engagement and retention of
employees.
WHY DOES HR MATTER IN CSR?
Companies increasingly need to co-ordinate their CSR activities and demonstrate their
commitment to CSR. Effective CSR depends on being seen as important throughout an
organization. Delivery, not rhetoric, is the key to stakeholders developing trust in an
organization. HR has a key role in making CSR work. CSR without HR runs the risk of
being dismissed as PR or shallow ‘window-dressing’. And CSR is an opportunity for HR
to demonstrate a strategic focus and act as a business partner. CSR needs to be
embedded in an organization’s culture to make a change to actions and attitudes, and
the support of the top team is critical to success. HR already works at communicating
and implementing ideas, policies, cultural and behavioral change across organizations.
Its role in influencing attitudes and links with line managers and the top team mean it is
ideally placed to do the same with CSR. HR is also responsible for the key systems
and processes underpinning effective delivery. Through HR, CSR can be given
credibility and aligned with how businesses run. CSR could be integrated into
processes such as the employer brand, recruitment, appraisal, retention, motivation,
reward, internal communications, diversity, coaching and training. The way a company
treats its employees contributes directly to it being seen as willing to accept its wider
responsibilities. Building credibility and trusting their employer are being increasingly
seen as important by employees when they choose who they want to work for. People,
especially Generation X and younger, don’t want to work where there is a clash with
their personal values. Present and future employees are placing increasing value on
the credibility of an organization’s brand. Employers are using the positive aspects of
their brand in recruiting, motivating and retaining highly skilled people.
One thing that is for sure - the pressure on business to play a role
in social issues will continue to grow. Over the last ten years,
those institutions which have grown in power and influence have
been those which can operate effectively within a global sphere of
operations. These are effectively the corporates and the NGOs.
Those institutions which are predominantly tied to the nation
state have been finding themselves increasingly frustrated at their
lack of ability to shape and manage events. These include
national governments, police, judiciary and others.
Human Resource Departments play a critical role in ensuring that the company
adopts Corporate Social Responsibility programs. Furthermore, HR can manage
the CSR plan implementation and monitor its adoption proactively, while
documenting (and celebrating) its success throughout the company. Human
Resources technology can help with a Corporate Social Responsibility program,
including reducing the company’s carbon footprint to benefit the planet. Some of
these areas are:
• Recycle paper, cans and bottles in the office; recognize departmental efforts.
• Collect food and donations for victims of floods, hurricanes and other natural
disasters around the globe.
• Encourage shutting off lights, computers and printers after work hours and
on weekends for further energy reductions.
• Increase the use of teleconferencing, rather than on-site meetings and trips.
High staff turnover, loss of key employees at critical times, the high cost of recruitment
and the training of new staff can all damage a business. CSR strategies and
programmes can help manage this risk by creating an environment where staff can
enjoy their work and where they can feedback concerns about the company’s
behaviour so action can be taken - for example, the identification of illegal workers in
the supply chain.
The recognition of the value of staff to an organisation is one of benefits from CSR as it
is not just about engaging with external audiences. Moreover, it is about how you
interact with your staff. Increasingly businesses are realising the importance of
employer brand. Just like other stakeholders, employees expect certain things not just
a salary from their employer.
Staff members want to feel they can identify with the company. Employer branding is
about making sure that employees feel good about the place they work. They can then
be ambassadors for the company and that ‘feel good factor’ can permeate out to
others, notably customers and clients. For these benefits to be accrued the
organisation needs to be CSR compliant (see note 2 below for more on this).
The role of HR
In many cases the board may have developed corporate policies that cover a range of
issues, including CSR, but no one ensures they are adhered to, checks the staff
awareness, or assesses their impact. It may be that the board’s present mission,
objectives and values do not reflect the values of staff or expectations of customers.
Arguably, HR is best placed to engage staff in these issues.
HR can play an important role in developing the process where the business objectives
are assessed and values re-aligned to match them with staff expectations. There are
many ways this can be done:
Workshops to engage with staff and promote the exchange of real life experiences.
Develop interactive intranet sites that show case examples of good practice, or build
in opportunities for promotion of good practice at staff meetings.
Review company policy and procedures to ensure values are consistent –
procurement, recruitment, training, appraisals and exit interviews.
Consult and involve staff more in the running of a business.
Provide feedback questionnaires for employees, customers and suppliers – to show
the organisation is living its values.
HR should also play the gatekeeper role in the development and monitoring of staff
policies and practice. It needs to be asking questions such as: ‘Does the business have
a social responsibility policy or an environmental policy?’ and ‘How does the business
ensure that these policies and the company’s values drive the way the company does
business?’ These values need to be reflected in staffing issues – recruitment, training,
appraisals, and in other processes such as procurement. HR has an important role to
play in ensuring this happens.
CSR is here to stay, how and where it is displayed with business will depend on the
board and other external factors. However, for CSR not to be merely an add on but to
be actually embedded as part of the business - reflecting the way it does business, its
culture and values - then HR will need to play its part.
HR departments may have a natural ally in their financial directors who are beginning
to recognise staff as an area of intangible risk. FDs should be prepared to invest to
manage this risk and create an employer of choice which delivers benefits to the
bottom line in a number of ways from improved staff retention to improved work
performance through more motivated staff.
Despite the wide scope of CSR there are some simple things that can be done to
identify the way your organization conducts its business, for example:
A wonderful way to recognize these differences is to have a sound Corporate Social Responsibility
(CSR) plan that can simultaneously increase shareholder value, boost employee engagement and
increase employer brand recognition. Human Resource Departments play a critical role in ensuring that
the company adopts corporate social responsibility programs. Furthermore, HR can manage
its implementation and monitor its adoption proactively, while documenting (and celebrating) its
success throughout the company.
Foster a Culture of Social
Responsibility
Creating a culture of change and responsibility starts with HR. Getting the younger workforce, who are
already environmentally conscious, excited about fresh CSR initiatives is a great way to begin. Having a
committed set of employees that infuse enthusiasm for such programs would enable friendly
competition and recognition programs. Over the past few years, major news organizations have been
consistently reporting on large, trusted companies that have failed employees, shareholders and the
public (i.e. Enron, Lehman, WaMu), which in its wake has created a culture of mistrust among the
corporate world. All too often, employees and employers of all levels who competed for advancement
and recognition in harsh workplaces were forced to accept corporate misconduct and waste as “business
as usual.” Employer brands are being eroded and the once sacred trust that employees once had with
stable pensions, defined benefits and lifelong jobs, are being replaced with pay for performance and
adjustment to new learning goals. CSR can go a long way in rehabilitating the employer brand with
potential new hires and society at large. It can help defeat the image that corporate objectives are rooted
in being a single minded profit machine at the expense of society and the environment. Social and
community connections that are encouraged by employers give workers the permission to involve their
companies in meaningful ways with the community. Employers can connect with their employees and
the community thorough
1. Company matches to employee charitable contributions
2. Community programs/volunteer days
3. Corporate sponsorship of community events
4. Encouraging employees to participate in walkathons, food banks, etc.