CSR

• Corporate Social Responsibility (CSR)

  The relationship between the business (corporate) and society (social) and the degree to which the business impacts on society
• The business should not just focus on its own profits, but it has a responsibility towards the people and the environment as well
• CSR


  An ongoing commitment by business to behave in an ethical manner by contributing to the economic and social development of employees and the community at large
• CSR in practice


  • The business is managed in a way that ensures its commercial sustainability (profitability) while acting in a way that will meet society's expectations of the business by contributing to society and the environment
• The King Code talks about the business being a good Corporate Citizen and that its actions should show that it cares about society and the environment
• Some skeptics argue that the business will only pretend to be a responsible citizen as long as it improves the brand image of the business to gain customers and ultimately profits
• Ethical citizen


  • Engages with all relevant stakeholders to ensure the sustainability of society and the environment
• Stakeholders


  • Employees
  • Shareholders
  • Customers
  • Government
  • etc.
• CSR


  An umbrella concept that helps the business to understand its stakeholders, and to react to counteract any negative effects on the stakeholders with proactive solutions
• Difficult issues to consider

  • Crime
  • Poor housing
  • Poverty
  • Lack of education
  • Unemployment
  • Environmental concerns
  • Poor health services
  • Inequality
• Levels of responsibility


  • Primary: stakeholders directly affected by the success of the business (e.g. employees and shareholders)
  • Secondary: stakeholders indirectly affected by the business activities (e.g. community, government and environment)
• Pyramid to measure level of responsibility

  • Economic Responsibility
  • Legal Responsibility
  • Ethical Responsibility
  • Discretionary Responsibility/Philanthropic
• CSR Programmes should be sustainable where the focus and impact should be long-term for positive change to occur in people's lives
• Criteria to measure sustainable business practice

  • Making operations environmentally sustainable
  • Making its own operations socially sustainable
  • Making society sustainable
  • Influencing suppliers
• Making operations environmentally sustainable

  Look at ways to cut back on wastage as well as ways to ensure non-renewable resources are treated with respect (e.g. find and utilize alternative energy sources)
• Making its own operations socially sustainable


  The business takes responsibility for ensuring that important issues in the workplace are addressed, such as: BEE/BBBEE; HIV/AIDS and health issues; Empowerment/skills development; Occupational Health and Safety; Trade Union involvement
• Making society sustainable


  Important for business to focus on the impact that its activities may have on the community because businesses function better in a strong, happy and stable community. Business should develop capacity by addressing social issues in the community through programmes aimed at quality education and health care.
• Influencing suppliers


  Important for businesses to monitor the supply chain / value chain so that the business will be actively aware of any possible negative effect or consequences that its suppliers may have on the environment and society. The business has to put pressure on suppliers to ensure their business activities are sustainable, otherwise the business should look for alternative suppliers.
• Stakeholders


  • Employees
  • Customers
  • Shareholders
  • Regulators
  • Government
  • Media
  • Communities
  • Suppliers
  • Unions
• Primary stakeholders


  Shareholders, employees, suppliers, customers and competitors
• Secondary stakeholders


  Local community, the country as a whole and environment
• Designing a CSR programme

  • Communicate the need for CSR across the business
  • Create a CSR policy for the business
  • Communicate the CSR policy throughout the business to ensure buy-in at all levels
  • Link CSR to business success factors – part of performance appraisals
  • Employees should brainstorm to come up with initiatives for CSR
  • Inventory of skills and resources needed to implement the programme is drawn up
  • Implement the CSR project
  • Monitor CSR initiative
  • Make necessary changes or go back to brainstorming
• Implementing a CSR strategy

  • Concept of Citizenship: Business should understand its position within the community and its responsibilities towards the different stakeholders
  • Strategic intent: Define the purpose of the CSR initiative (aim) to understand how CSR forms part of core values of business
  • Leadership: Top management must ensure that their vision of the business as a corporate citizen becomes part of the everyday life of the business
  • Structure: All resources should be aligned with the ultimate CSR goals of the business
  • Management: All levels of management should understand and have buy in of the programme
  • Stakeholder Relationships: Business should maintain sound relationships with both internal and external stakeholders through open communication channels
  • Transparency: All relevant info about the CSR initiative has to be communicated to stakeholders – even if negative
• CSR reporting


  Businesses have started to report to shareholders and other stakeholders on social and environmental performance, as well as economic performance, to be more accountable and transparent
• Information to include in a CSR report

  • Business Profile: vision and mission; size and operations; markets in which the business operates
  • CSR Initiatives: details of CSR programmes and projects
  • Stakeholder Engagement: how the business engages with stakeholders
  • Environmental Impact: the business's impact on the environment
  • Social Impact: the business's impact on society
  • Economic Impact: the business's economic performance and contribution
• Open communication channels


  So that correct info reaches correct stakeholders on time
• Transparency


  All relevant info about the CSR initiative has to be communicated to stakeholders – even if negative
• Challenge for the business

  To have contingency plans in place to overcome negative events or failures
• CSR reporting


  Traditionally businesses reported to shareholders on financial aspects, more recently on social, environmental and economic performance
• Accountable and transparent approach

  To share information with stakeholders
• CSR report must include

  • Business profile
  • Board commitment
  • Environmental and social business policy
  • Management systems
• Media attention and positive publicity are what the business can expect to gain from CSR
• A better functioning society as some of the socio-economic problems may have been addressed is what the business can expect to gain from CSR
• Making a sustainable difference in the lives of people is what the business can expect to gain from CSR
• An image of the business as one with a sound Corporate Governance record is what the business can expect to gain from CSR
• If CSR is part of the organizational culture it unites team members in a common aim to achieve expectations over and above the official job, leading to better teamwork
• Corporate Governance


  The set of rules and the processes that are used by Top Management to direct and control the business
• Corporate Governance provides


  A framework and control measures to look after the bottom line of the business, but also to consider the interests of all stakeholders
• The King Committee was founded in 1992 explicitly to clarify the concept of Corporate Governance and how it can be implemented in the South African context
• The King I Report recommended standards of conduct for companies listed on the JSE, as well as State-owned business regarding their responsibilities towards citizens in the societies within which they function