Henry Kissinger in his book Diplomacy described the development of the US philosophy on foreign affairs in contrast to their European counterparts. While the Europeans believed in a balance of power, where harmony could emerge from a competition of selfish interests, the US thought that foreign policy should reflect the same moral standards as personal ethics. Judging a corporation in the same way that you would judge an individual is an interesting point of view when it relates to corporate social responsibility.
Corporate social responsibility can be defined as those voluntary actions carried out by organisations to operate in an economic, social and environmentally sustainable manner and good CSR strategies are ingrained in the companies mission and relevant to it’s purpose. The meaning and application of CSR has evolved over time and when I was introduced to it in the late 90s it was seen as a differentiator for business. Many businesses had identical missions, systems, and talent, and one way to differentiate your business was through the corporate citizenship projects that you run. It has been in the 2000s that CSR has become definitively an important strategic issue that determines corporate behaviour bound by duty to their people, their partners, the government and the community.
The embodiment of responsible business takes many forms and recent examples are demonstrated by the likes of Apple when they launched their latest phone model, iPhone SE, which is housed in the same casing as the iPhone 5 model, in a bid to support environmental preservation. In the same vein Dell has a Legacy Of Good initiative that aims to achieve 21 ambitious goals by 2020 and includes the industry-leading circular economy practices of designing out waste and creating a more sustainable supply chain. The results of this are breathtaking. To date Dell has recycled 42 million pounds of e-waste plastics and put them back into new products.
Locally, when companies began to introduce social responsibility within their ranks it wasn’t provided an adequate home. Rather than residing at the board level, it was relegated to the marketing department as a tool for gaining visibility and developing the corporate reputation. The marketing department did what it knows best and used the charity projects as an opportunity to gain share of voice in the media. When big companies gave little children fat cheques, the media was compelled to cover the event. The community projects that they supported were relatively disjointed and their effects were not sufficiently measured, leaving much to be desired with regards to long term sustainability. The marketing efforts on the other hand, were successful until news editors discovered that corporations were using charity to gain visibility. This coverage was eventually downgraded to the Monday business pictorial sections.
It all changed when corporate citizenship was invited into the boardroom and adopted by the CEO as a core responsibility. Today when you look at the CSR initiatives carried out by Safaricom, EABL, Coca-Cola, KCB and Equity Bank to name a few who publish their responsible business reports regularly, you will find impressive achievements that are good for the company and the society at large.
When we compared the results from the visibility and reputation studies of major corporations we found varied results. On one hand significant charitable activities coupled with similarly large investments in PR drive the perception that a company is a regular contributor to the well being of the country. On the other hand there were organisations that had very little promotion of their community service projects and yet their reputations soared above the rest.
The main difference between the two approaches mentioned above is that the second type builds a strong reputation through single minded initiatives and they concentrate their resources on one project theme that is relevant to their business, supports the aspirations of the nation and captures the imagination of the citizens. It is then easier to build a narrative that Kenyans can relate to and thus reduce the need for significant investments in publicity.
Going back to the thought about harmonising the moral standards of business and the individual, corporates may learn a thing or two from the cardinal virtues which are described by Marcus Aurelius as the good that someone should identify in ones own life as opposed to wealth or things which conduce to luxury or prestige. The four cardinal virtues are prudence which is attributed to the leaders and strategy; justice, which relates to fair practice towards all stakeholders; temperance, which differentiates between the aim for reasonable profits and greed; and fortitude, which relates to talent development.