BUSINESS MANAGEMENT: Corporate Social Responsibility

• The concept of corporate social responsibility (CSR) is the idea that businesses have an obligation to act responsibly towards society.
• Corporate social responsibility refers to the business's commitment to operating ethically, being accountable, transparent, and socially responsible.
• INVESTEC is a good example of how CSR can be entrenched in the core business of an organization, driving both profits and development.
• CORPORATE SOCIAL RESPONSIBILITY = CORORATE SUSTAINABILITY
• WE LOOK AT:

  • Environmental impacts
  • Social impacts
  • How the money is spent in the business
• The overall goal is to COMBINE economic progress, social justice and environmental sustainability [preservation].
• Corporate social responsibility deals with how business organisations can meet essential needs without dishonouring community values.
• : ‘Corporate responsibility is the responsibility of the company for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that: •contributes to sustainable development, including health and the welfare of society; •takes into account the legitimate interests and expectations of stakeholders; •is in compliance with applicable law and consistent with international norms of behaviour; and •is integrated throughout the company and practiced in its relationships.
• CORPORATE CITIZENSHIP/PERSONHOOD:

  Corporates are granted constitution RIGHTS AND RESPOSNSOBILITIES
• CORPORATE SOCIAL INVESTMENT/ CORPORATE PHILANTHROPY:

  contribution made to SOCIETY[except for contributions made through core business activities.]
• CORPORATE CITIZENSHIP RIGHTS AND RESPONSIBILITIES:

  • right to hire
  • right to hold assets
  • right to sue and be sued
  • right to enter into contracts
  • right to govern internal affairs
• A business judgement call that does not take account of the triple bottom line concept could lead to a decrease in the organization's value.
• TRIPLE BOTTOM LINE:

  Concept that says firms should commit to measuring the SOCIAL and ENVIRONMENTAL IMPACT in addition to FINANCIAL PERFORMANCE.
• TRIPLE BOTTOM LINE [ sustainability + business]
• TRIPLE BOTTOM LINE [3 P'S]:

  • PROFIT
  • PEOPLE
  • PLANET
• The creation of job opportunities and training IS NOT CONSIDERED CSI[CORPORATE SOCIAL INVESTEMENT]
• CSR IN CONTEMPORARY BUSINESS MANAGEMENT:

  1. SOCIAL DRIVERS
  2. GOVERNMENTAL DRIVERS
  3. MARKET DRIVERS
  4. ETHICAL DRIVERS
• SOCIALS DRIVERS:

  • Consumers prefer companies that sell socially resposnsible products and services
  • Employees increasingly prefer companies with a reputation for being socially responsible
  • Mainstream investment funds and Stock exchanges are ADDRESSING CSR objectives
  • examples: Dow Jones Sustainability Index and South Africa's JSE Investment Index
• GOVERNMENTAL DRIVERS:

  • Local and National systems: LABOUR RELATIONS, ENVIRONMENTAL MANAGEMENT,LEGISLATION ABOUT COMPANIES
  • Can facilitate CSR through ORGANISATIONAL SUPPORT
  • Legislation encourages corporate behaviour
• MARKET DRIVERS: companies can reduce cost through

  • avoid fines
  • avoid legal costs
  • reduce the cost of capital
  • use resources efficiently
  • use alternative raw material sources
• MARKET DRIVERS: companies can increase revenue through CSR by

  • develop new products and services
  • avoid boycotts
  • improving access to markets
  • exploiting CSR premuim
• CORPORATE GOVERNANCE: how companies are MANAGED AND CONTROLLED.
• CORPORATE GOVERNANCE

  good governance is about effective leadership

  refers to the relationship of those who govern and those who are governed
• BOARD OF DIRECTORS: LEAD[MANAGE] and CONTROL. core of corporate governance
• the BOARD is the FOCAL POINT of the corporate governance system
• The BOARD composes of EXECUTIVE DIRECTORS and NON-EXECUTIVE DIRECTORS
• EXECUTIVE DIRECTORS:

  • from management and appointed to the board
  • full-time employees of the company
  • role as a director
  • role as senior management
• NON-EXECUTIVE DIRECTORS:

  • not involved in day-to-day operation
  • receive director's fees ONLY
  • should be in position to provide independent judgement on company issues
• 3 ways in which the board and the CSR committee can determine how to establish the corporate policy for CSR

  1. VALUES-BASED SYSTEM: proactive approach
  2. STAKEHOLDER-ENGAGEMENT PROCESS: reactive approach
  3. COMBINATION OF BOTH
• REASONS WHY COMPANIES ENGAGE WITH STAKEHOLDERS:

  • Responsible companies want to understand and respond to society's expectations
  • Engagement is a means to help build relationships with all parties, improving business planning and performance
  • Engagement helps to provide opportunities to align business practices with societal needs and expectations
• STAKEHOLDER's are a person or group that affects or is affected by company's business activity
• 1. PRIMARY STAKEHOLDER's
  2. SECONDARY STAKEHOLDER's
• ENGAGEMENT is an ongoing and multi-faceted process between corporation and stakeholders
• ENGAGEMENT

  • providing information
  • listening and responding to community's and stakeholder's concerns
  • including community and stakeholders in decision-making processes
  • establishing realistic understanding of outcomes
• KEY APPROACHES TO STAKEHOLDER ENGAGEMENT PROCESS:

  1. INVOLVEMENT
  2. CANDOUR
  3. TRANSPARENCY
  4. ACTION
  5. LEARNING
• STAKEHOLDER ENGAGEMENT PROCESS

  1. PREPARE: identify and understand
  2. PLAN: set objectives
  3. DESIGN: develop engagement plan
  4. ENGAGE: meet objectives
  5. EVALUATE: assess the outcomes
  6. APPLY: share the information