Transparency is important and becoming increasingly so. I am a big champion of transparency, but then I work for an NGO, so I would be!
I was wondering, in the context of the previous post about the 'invisible line', about how transparent a business could be. Nothing is simple. I looked before at why businesses are not responsible, since no-one seems to focus on this as much! Likewise, why is the 'publish what you pay' coalition (seemingly) such a failure? Why are companies not telling everyone how much taxes they are paying? Why in their Annual Report do they not geographically break down their payments? I think there are some unforeseen consequences. These could be positive but they could be (almost) revolutionary (sounds so dramatic). Let me introduce some scenarios:
-Shell says how much it pays the Nigerian government in taxes; the local people try to find out where it is getting spent and then civil unrest starts. This forces Shell to stop producing and to leave the country -for how long? Alternatively say Chevron pays less taxes and everyone tries to work out if this is justified or not (maybe from less income) -since tax regimes are so complicated that unfair comparisons are likely to be made and little achieved.
-If Wal-mart declared part of internal financial statements then competitors can work out their margins. Suppliers will realise the actually costs or sales of their products and renogotiate. Maybe this is stupid: but this is transaprency. Imagine that the current trend of supply-chain management develops so that customers demand more. Not just wanting to know if the company supports illegal forests, but wants to know if they use any of this or that chemical, they want to know how many products are bought locally (to support the local economy) and they want to know which ones. This could be fantastic: a concerted drive to source locally since customers might pay more for locally sourced goods it if keeps their neighbours in business, and so Walmart buys more locally... One way or another Wal-mart is forced, or voluntarily, reveals all this kind of information.
-If the terms of a contract were made public, how would this impact future competitiors wishing to bid for the contract? Granted if this was unusual, there would be (presumably) inequality in bargaining power, in knowledge disclosure and so on.
What I am really getting at, is that transaprency could work. But if it is to work, it needs a totally new paradigm: a new society with a new perspective on transparency with consequences that would (if transparency were the 'norm' -ie. legally enforced, and so everyone had the same access to the same knowledge) completely revolutionise how business is done. Would business be able to survive in this environment? I wonder if anyone has thought about any modelling of how it might, or how business could compete with total transaprency?
If we presume, that this would not be possible, then we have to work out where the line is between no transparency to total transaprency. Then we need to establish the motivations behind increasing transparency: legal or just self-interest? Transparency will increase when organisations think it is in their own benefit. Otherwise it would not be sustainable. No wonder 'publish what you pay' is destined to fail. NGOs might wield power of a sort, but its influence is limited when its demands unreasonable and when the impact of its activities (even if successful) may be limited: the unintended consequences could be graver. I'm a believer that someone will do something if they think its right. Telling them its right is not as effective as showing them.
Back onto the topic, what if transparency was not total: but more complicated (even those complexity usually makes things worse, in my opinion). What if different disclosures were made to different groups at different times (or when asked) and what those groups did with information did not affect the company's competitiveness or comparative advantage? Well, lets see if this will work. It seems this is the way the World is going... I can imagine in the near future that Transparency International will get certain information, create a report and say 'trust me' without revealing all the details. But what makes this interesting, is that companies are now refusing to trust governments with their details (ID cards in UK, google in the US), so why should we trust NGOs, or any other organisation for that matter?
I'm looking forward to how the current experiment in transparency works out and would be much more interested to look further into a concept of a world with total transparency: what would the ramifications be for salaries, costs, negotiations....?Why, we might end up in a world totally different -would it be a world that works better than the current one? Maybe, but will it be better for those who control the world now -no. So how likely is it to happen? So, going backwards somewhat (to reality), how likely is transparency as a concept to develop anyway? It is a concept that SEEMS to only have negative effects to those benefitting from an untransparent World. What is the future of transparency?
Monday, March 27, 2006
The invisible line
Assumption:
-Partnership between sectors and organisations are good. eg. government and business collaborating on new laws that businesses could abide by and benefit from or companies in the same sector creating a voluntary code that they will agree to (such as not advertising chocolate to shildren)
-Corruption is bad. eg. business paying government to make, or not make, a certain law or businesses working together as cartels to create artificial price fixes
You'll see what I am leading to... where is the line between partnership and corruption? That the line can be greay and not black/white means it is harder to define the boundary, but more importantly, it is harder to interpret. So a company may quite happily have 2 principles: 1 of partnering to achieve more and 1 of refusing to be involved in corruption. It may strive to work closely with its suppliers and customers so it can better service them, it may give preferential treatment to preferred suppliers. But when does this preferential treatment become bribery?
Consider the case of treating a customer to dinner, or the case of a business partner also being a friend. When does the dinner become a bibe and when does a social conversation about their sector end up as a tacit agreement to collude or lead to sepcial favours? When recruiting someone, it is sensible to take into account personal experience or recommendations, but how valid is this, and does this not lead to discrimination against those who you did not know before?
Thinking about this more and more show that there are so many more examples -how do you draw the line? Presuming you do not intend to break the law then the line is very subjective. It is defined in reference to the 'norm' (ie. the normal circumstances that you think everyone does all of the time as part and parcel of the job). This creates a problem if there is no established 'norm' or if you do not know what the 'norm' is. In the case of China, where everything changes so fast (including the legal framework) and where most foreigners enter the market without understanding the culture or even being able to communicate effectively these issues might become especially valid.
On a slight tangent, this question leads me to think of the separate role of government and business. Is there a separate role? In every country the role is different. In some cases governments provide training, healthcare, utilities, salaries (pensions, unemployment benefit) etc etc. In others it is different. On a micro level in China you will find the British Embassy offering some free advice to British companies wishing to set up here, since the government wants to encourage business success, yet the company could also pay a special consultant for more in-depth advice. In fact often the government might subsidise this kind of advice directly.
What do companies do? Provide services in return for money? well governments do the same: you pay in your taxes and receive benefits. Governments tend to then themselves pay another company to do some of those services (outsourcing) and then it can all get complicated and confusing. I think the concept of CSR is struggling somewhat since it is trying to establish the rold of business in society: in reducing poverty, in creating a successful, sustainable society and so on. But this is also the role of national, local or international governments. Then there are NGOs: many bigger and with more influence than business or governments. Many performing services that are effectively government services outsourced.. but to an NGO not to a company. No difference, except in name.
All types of organisations have the ability to accrue debt or make profit. It could be possible to argue that governments are elected, other organisations are not: but this has nothing related to role of the organisation itself: maybe in the future, since stakeholders are becoming so important in business, that business will not just hold itself accountable to its stakeholders, but will go even further and hold itself electable to stakeholders. It will certainly gain legitimacy and trust! Though this may seem pointless since many countries struggle to have high turn-out in their governmental elections anyway!
So, the invisible line: macro and micro level discussions. Impact on individual level? How the individual defines their own lines, in the context of how the individual believes others see the line, and how the individual thinks others expect the individual to draw the line. Its all to subjective... no wonder corruption is a problem!
-Partnership between sectors and organisations are good. eg. government and business collaborating on new laws that businesses could abide by and benefit from or companies in the same sector creating a voluntary code that they will agree to (such as not advertising chocolate to shildren)
-Corruption is bad. eg. business paying government to make, or not make, a certain law or businesses working together as cartels to create artificial price fixes
You'll see what I am leading to... where is the line between partnership and corruption? That the line can be greay and not black/white means it is harder to define the boundary, but more importantly, it is harder to interpret. So a company may quite happily have 2 principles: 1 of partnering to achieve more and 1 of refusing to be involved in corruption. It may strive to work closely with its suppliers and customers so it can better service them, it may give preferential treatment to preferred suppliers. But when does this preferential treatment become bribery?
Consider the case of treating a customer to dinner, or the case of a business partner also being a friend. When does the dinner become a bibe and when does a social conversation about their sector end up as a tacit agreement to collude or lead to sepcial favours? When recruiting someone, it is sensible to take into account personal experience or recommendations, but how valid is this, and does this not lead to discrimination against those who you did not know before?
Thinking about this more and more show that there are so many more examples -how do you draw the line? Presuming you do not intend to break the law then the line is very subjective. It is defined in reference to the 'norm' (ie. the normal circumstances that you think everyone does all of the time as part and parcel of the job). This creates a problem if there is no established 'norm' or if you do not know what the 'norm' is. In the case of China, where everything changes so fast (including the legal framework) and where most foreigners enter the market without understanding the culture or even being able to communicate effectively these issues might become especially valid.
On a slight tangent, this question leads me to think of the separate role of government and business. Is there a separate role? In every country the role is different. In some cases governments provide training, healthcare, utilities, salaries (pensions, unemployment benefit) etc etc. In others it is different. On a micro level in China you will find the British Embassy offering some free advice to British companies wishing to set up here, since the government wants to encourage business success, yet the company could also pay a special consultant for more in-depth advice. In fact often the government might subsidise this kind of advice directly.
What do companies do? Provide services in return for money? well governments do the same: you pay in your taxes and receive benefits. Governments tend to then themselves pay another company to do some of those services (outsourcing) and then it can all get complicated and confusing. I think the concept of CSR is struggling somewhat since it is trying to establish the rold of business in society: in reducing poverty, in creating a successful, sustainable society and so on. But this is also the role of national, local or international governments. Then there are NGOs: many bigger and with more influence than business or governments. Many performing services that are effectively government services outsourced.. but to an NGO not to a company. No difference, except in name.
All types of organisations have the ability to accrue debt or make profit. It could be possible to argue that governments are elected, other organisations are not: but this has nothing related to role of the organisation itself: maybe in the future, since stakeholders are becoming so important in business, that business will not just hold itself accountable to its stakeholders, but will go even further and hold itself electable to stakeholders. It will certainly gain legitimacy and trust! Though this may seem pointless since many countries struggle to have high turn-out in their governmental elections anyway!
So, the invisible line: macro and micro level discussions. Impact on individual level? How the individual defines their own lines, in the context of how the individual believes others see the line, and how the individual thinks others expect the individual to draw the line. Its all to subjective... no wonder corruption is a problem!
Friday, March 24, 2006
Why do companies behave irresponsibly? -2
So how is the internal environment of an organisation influencing CSR? First I'll convince you that it is important. Look at Shell and BP: 2 of the best companies in the World for CSR (apparently); Shell had to revalue its oil reserves 2 years ago in a transparency disaster and this year BP has had an oil spill in Alaska from pipes that used to be inspected by 4 people but now only by 2 (to cut costs) .
Its clear that many of the best run global companies still have not mastered CSR by integrating it into their culture, despite valient attempts to. It seems that I should try to remember something about the module on 'OB' -Organisational Behaviour that I sudied at University, but I cannot! Anyway once again it shows that if you learn something in real life you'll remember much more. So what have I learnt? (and lets hope I'll remember!)
detachment. I have mentioned this before, and it is hugely important that you see the impacts from your actions. So many people don't even know what their impacts are, let alone try to ackowledge what those impacts might mean if they were aware of them. Will the BP person who originally decided to cut the oil pipe inspectors from 4 to 2 realise what has happened? Or was (s)he sitting in a head office, has now switched jobs or (if (s)he read the news) is (s)he blaming the accident on something else?
individualism. People tend to have individual targets and goals, and this is what they focus on. This detracts from seeing the bigger picture or caring about what other people are doing... or even thinking if what you are doing is related to someone else or not. As long as you do what your job is properly, then that's ok? Probably not, since it won't leverage any synergies in the company, it won't create the best solution for larger problems and it will only create a sense of responsibility to yourself, not to the organisation or to society.
reward and punishment. Punishment is always used too much, and is rarely effective. Reward is a better motivator, yet is rarely motivating anyone towards sustainability or responsible actions. You reward a sales person for increasing sales this year, you don't care whether those sales will be re-sold next year. Similarly you'll reward someone for a project completed on time, but won't think that they should write a report on how they did that which could help someone else repeat that accomplishment or consider the impacts of the project 5 years down the line (by requiring a post-project completion impact report or something). Companies need to reward in the right way in order to create the culture they want, and if they are serious about creating a sustainable, successful, organisation, their reward should support this.
misalignment. I find is fantastic that organsiations have values, goals, strategies and plans. Yet are they aligned? Are you rewarding employees for exhibiting the values you want to encourage? Are the goals sustainable and related to a long-term plan -what is their impact? Its fine to increase sales by 20%, but what will that do? Make people 20% fatter? Make employees work 15% more overtime? Reduce costs by 25% from your supplier who then goes bankrupt or pays their employees 25% less and so reducing product quality or requiring you to change supplier the following year, incurring the necessary switching costs? Will this growth generate bigger bonuses to employees who might then get poached by another company due to their success? All kinds of issues should be considered. I don't know if a framework exists in order to consider these -but maybe one should be! Life and Business is complicated -but it should be possible to make it simple: align, motivate and achieve.
decision-making. Also mentioned before but something i am becoming more intrigued in. What are the improtant factors when making a decision? Why will someone 'take short-cuts' or cheat? Who needs to be consulted for a decision to be made, and if everyone involved all has different motives might the outcome be a compromise for everyone and unsatisfactory for everyone at the same time? Is a decision based on the past, present or future, and how can you measure either: is a projection reasonable or is it biased?
I am sure these kinds of issues play a very important role in an organisation -i guess they are not very well understood. I think they need to be better understood for each of us to be responsible leaders, and for our organsiations to be responsible leaders.
Its clear that many of the best run global companies still have not mastered CSR by integrating it into their culture, despite valient attempts to. It seems that I should try to remember something about the module on 'OB' -Organisational Behaviour that I sudied at University, but I cannot! Anyway once again it shows that if you learn something in real life you'll remember much more. So what have I learnt? (and lets hope I'll remember!)
detachment. I have mentioned this before, and it is hugely important that you see the impacts from your actions. So many people don't even know what their impacts are, let alone try to ackowledge what those impacts might mean if they were aware of them. Will the BP person who originally decided to cut the oil pipe inspectors from 4 to 2 realise what has happened? Or was (s)he sitting in a head office, has now switched jobs or (if (s)he read the news) is (s)he blaming the accident on something else?
individualism. People tend to have individual targets and goals, and this is what they focus on. This detracts from seeing the bigger picture or caring about what other people are doing... or even thinking if what you are doing is related to someone else or not. As long as you do what your job is properly, then that's ok? Probably not, since it won't leverage any synergies in the company, it won't create the best solution for larger problems and it will only create a sense of responsibility to yourself, not to the organisation or to society.
reward and punishment. Punishment is always used too much, and is rarely effective. Reward is a better motivator, yet is rarely motivating anyone towards sustainability or responsible actions. You reward a sales person for increasing sales this year, you don't care whether those sales will be re-sold next year. Similarly you'll reward someone for a project completed on time, but won't think that they should write a report on how they did that which could help someone else repeat that accomplishment or consider the impacts of the project 5 years down the line (by requiring a post-project completion impact report or something). Companies need to reward in the right way in order to create the culture they want, and if they are serious about creating a sustainable, successful, organisation, their reward should support this.
misalignment. I find is fantastic that organsiations have values, goals, strategies and plans. Yet are they aligned? Are you rewarding employees for exhibiting the values you want to encourage? Are the goals sustainable and related to a long-term plan -what is their impact? Its fine to increase sales by 20%, but what will that do? Make people 20% fatter? Make employees work 15% more overtime? Reduce costs by 25% from your supplier who then goes bankrupt or pays their employees 25% less and so reducing product quality or requiring you to change supplier the following year, incurring the necessary switching costs? Will this growth generate bigger bonuses to employees who might then get poached by another company due to their success? All kinds of issues should be considered. I don't know if a framework exists in order to consider these -but maybe one should be! Life and Business is complicated -but it should be possible to make it simple: align, motivate and achieve.
decision-making. Also mentioned before but something i am becoming more intrigued in. What are the improtant factors when making a decision? Why will someone 'take short-cuts' or cheat? Who needs to be consulted for a decision to be made, and if everyone involved all has different motives might the outcome be a compromise for everyone and unsatisfactory for everyone at the same time? Is a decision based on the past, present or future, and how can you measure either: is a projection reasonable or is it biased?
I am sure these kinds of issues play a very important role in an organisation -i guess they are not very well understood. I think they need to be better understood for each of us to be responsible leaders, and for our organsiations to be responsible leaders.
Why do companies behave irresponsibly? -1
It just dawned on me that instead of sitting in these conferences, always talking over and over again about why CSR is so good and why everyone should do it; it might be better to question first why are companies NOT doing it, since it is good business.
Is it a case that these people are stupid? or bad businessmen? Maybe it is. But also maybe it is much more complicated. I really do not think that the managers of mining companies in China want to kill their workers, but many of them end up hurt. Why?
It seems there are 2 main areas for discussion here: the external framework (that is often location specific) and the internal environment of a company/organisation.
At one event I went to recently, the GM of a state-owned railway company, spoke about the pressures he faces: he says a project will take 4 years, the government says to do it in 2 years! How can you implement a prject sustainably when you have to do it in half the time you expected it to take? The private companies also said that when they bid for a project they expect it to cost a certain amount. Then they are told that if they want the project they will have to do it for 25% less. How can they do that? If they do not accept then they have no business -if they do accept they will have to make some short-cuts to save on costs!
It is no wonder that there are health and safety problems: pressures to use cheaper materials, pressure to do things quicker and take less safety precautions. In this short-term situation it is hard to use the normal CSR lines to convince the company. On one hand there will be extra costs if there are injuries or problems with a bridge collapsing for example, but maybe you can complete the project without any of these problems.. and so the company tries to do this. In this case the solution seems to be about the development of the external framework to be more ameniable for CSR.
Thus, NGOs or government will pressurise the organisation awarding the contract, so make sure that all the companies that bid must meet certain minimum requirements. This means there will be a certain cost that no-one can go below, and the awarding body will have to accept that it cannot continue to force down the cost. Alternatively customers will actually start to care about CSR: so they will choose the best company for the project, not the cheapest. Right now costs is always the most important factor. I believe some companies like Shell take other factors into account to some extent, but when you make billions in profits you can afford some luxuries like this!
Is it a case that these people are stupid? or bad businessmen? Maybe it is. But also maybe it is much more complicated. I really do not think that the managers of mining companies in China want to kill their workers, but many of them end up hurt. Why?
It seems there are 2 main areas for discussion here: the external framework (that is often location specific) and the internal environment of a company/organisation.
At one event I went to recently, the GM of a state-owned railway company, spoke about the pressures he faces: he says a project will take 4 years, the government says to do it in 2 years! How can you implement a prject sustainably when you have to do it in half the time you expected it to take? The private companies also said that when they bid for a project they expect it to cost a certain amount. Then they are told that if they want the project they will have to do it for 25% less. How can they do that? If they do not accept then they have no business -if they do accept they will have to make some short-cuts to save on costs!
It is no wonder that there are health and safety problems: pressures to use cheaper materials, pressure to do things quicker and take less safety precautions. In this short-term situation it is hard to use the normal CSR lines to convince the company. On one hand there will be extra costs if there are injuries or problems with a bridge collapsing for example, but maybe you can complete the project without any of these problems.. and so the company tries to do this. In this case the solution seems to be about the development of the external framework to be more ameniable for CSR.
Thus, NGOs or government will pressurise the organisation awarding the contract, so make sure that all the companies that bid must meet certain minimum requirements. This means there will be a certain cost that no-one can go below, and the awarding body will have to accept that it cannot continue to force down the cost. Alternatively customers will actually start to care about CSR: so they will choose the best company for the project, not the cheapest. Right now costs is always the most important factor. I believe some companies like Shell take other factors into account to some extent, but when you make billions in profits you can afford some luxuries like this!
Monday, March 20, 2006
Management problems
When writing my ideas for submitting an essay to the China CSR Map's essay competition I started thinking about CSR in China from an objective, long-term perspective: trying to think about why CSR is growing, is it growing and where is it going...
One of the issues I draw upon is related to the State Owned Enterprises (SOEs) in China. The largest national ones have all been put under the control of SASAC (State-owned Assets Supervision and Administration Commission of the State Council) in order to reform and restructure the SOEs. The question I posed was oringnally just about CSR: If the government wants to encourage CSR then it should tell the SOEs and they will do it, or not?
Now ignoring the issue of CSR and just looking at the issue of owners telling the managers to do something, you come to several problems. Key, for me (especially in a CSR context) is that it is likely that some of the instructions will be beneficial to the SOE, but not to the manager. If we presume that implementing CSR has negative short-term implications (financial and human investment required) but positive long-term implications, then the Manager might not care about the long-term. In addition, they might not want to accept more responsibilities or more targets, or anything that makes their life harder, more complicated or more difficult. How much power does the owner wield? For non SOEs, the bigger issue is that short-term investments often lead to lower profits and lower stock (share) prices; both of which managers are measured against to judge their success.
Presuming that current governance models, therefore (either government owned or publicly owned) have these inherent problems (and many more, that I will not delve into right now), what can be done?
There are 2 focus areas. The first is to try to create an organisation that acts responsibly, which can mostly be done through creating such an organsiational culture (as mentioned many times before on this blog), but this is not easy -especially if you have to change the current culture of a large organisation. It would be easier to try to create the necessary processes that create a responsible organisation. This could be creating a reward system that rewards the kind of beahviours or results that you want, or it could be from the 'stick' approach: through governance and reporting systems.
The second is to create individuals who act responsibly which is also tough. Responsible leadership is important: since setting an example and acting as a role model can really make a difference. You need to create people who see what is best for the company, and do that -even if it is not best for them. Create the culture of 'what is best for the company is best for me'. This is not easy though... so there are some little tricks that can be employed.. For example, try creating buy-in from the individual by tapping into their loyalty to the organisations or by instilling a little fear.
At the end of the day, this problem is one that is inherent and wide-spread, with no simple solution. The solution is tough and demanding: the solution is to recruit and employ individuals with an ethical stance, with the sense of responsible leadership. Create the framework and the system for this attitude to thrive and this should mitigate the ownership-manager conundrum.
One of the issues I draw upon is related to the State Owned Enterprises (SOEs) in China. The largest national ones have all been put under the control of SASAC (State-owned Assets Supervision and Administration Commission of the State Council) in order to reform and restructure the SOEs. The question I posed was oringnally just about CSR: If the government wants to encourage CSR then it should tell the SOEs and they will do it, or not?
Now ignoring the issue of CSR and just looking at the issue of owners telling the managers to do something, you come to several problems. Key, for me (especially in a CSR context) is that it is likely that some of the instructions will be beneficial to the SOE, but not to the manager. If we presume that implementing CSR has negative short-term implications (financial and human investment required) but positive long-term implications, then the Manager might not care about the long-term. In addition, they might not want to accept more responsibilities or more targets, or anything that makes their life harder, more complicated or more difficult. How much power does the owner wield? For non SOEs, the bigger issue is that short-term investments often lead to lower profits and lower stock (share) prices; both of which managers are measured against to judge their success.
Presuming that current governance models, therefore (either government owned or publicly owned) have these inherent problems (and many more, that I will not delve into right now), what can be done?
There are 2 focus areas. The first is to try to create an organisation that acts responsibly, which can mostly be done through creating such an organsiational culture (as mentioned many times before on this blog), but this is not easy -especially if you have to change the current culture of a large organisation. It would be easier to try to create the necessary processes that create a responsible organisation. This could be creating a reward system that rewards the kind of beahviours or results that you want, or it could be from the 'stick' approach: through governance and reporting systems.
The second is to create individuals who act responsibly which is also tough. Responsible leadership is important: since setting an example and acting as a role model can really make a difference. You need to create people who see what is best for the company, and do that -even if it is not best for them. Create the culture of 'what is best for the company is best for me'. This is not easy though... so there are some little tricks that can be employed.. For example, try creating buy-in from the individual by tapping into their loyalty to the organisations or by instilling a little fear.
At the end of the day, this problem is one that is inherent and wide-spread, with no simple solution. The solution is tough and demanding: the solution is to recruit and employ individuals with an ethical stance, with the sense of responsible leadership. Create the framework and the system for this attitude to thrive and this should mitigate the ownership-manager conundrum.
Thursday, March 09, 2006
CSR at Board Level
Where does CSR sit at Board Level? Well probably under the External Affairs team, or maybe there is a specific person responsible for CSR. If there is, what are they called?
A survey of 100 fortune 500 companies could reveal some interesting results. In the meantime I'd like to propose whether the title means a lot or not. Personally I don't think the title means all that much. What is most important is the job description and the responsibility/respect the person has. However the job title might imply these. Thus there may not be much difference between CSR or CR but there is for Community Affairs and Legal (which may also be responsible for CSR).
A few leading companies have redefined 'CSR' as CR or R or many others (some including ethics which is to be aplauded). One that I like is CSO: Corporate Social Opportunity, thus someone's 'CSR' report was titled CSO: Turning Corporate Social Responsibility into Corporate Social Opportunity (it may have been P&G I am not sure). Although this may work for some, for others they may not have the ability to capitalise on CSR as core to their strategy and a source fo comparative advantage or innovation.
What I would encourage for companies not yet at the CSO level is another title; one that is more short term focused, more financiall and legally focused -and thus easier to define a short-term business case: Risk Management. Whilst investigating our own CSR report, we've realised there will be a number of various focuses. 1 is what we are doing badly, not as well as we want to, or can do better and achieve more. Another 1 is what risks we face now that we are not addressing and what ones we should be anticipating in the future.
Risk Management is a really great way of defining the most pressing aspect of CSR: the one with the most examples, and the one that can most easily be understood by other Board level Directors.
A survey of 100 fortune 500 companies could reveal some interesting results. In the meantime I'd like to propose whether the title means a lot or not. Personally I don't think the title means all that much. What is most important is the job description and the responsibility/respect the person has. However the job title might imply these. Thus there may not be much difference between CSR or CR but there is for Community Affairs and Legal (which may also be responsible for CSR).
A few leading companies have redefined 'CSR' as CR or R or many others (some including ethics which is to be aplauded). One that I like is CSO: Corporate Social Opportunity, thus someone's 'CSR' report was titled CSO: Turning Corporate Social Responsibility into Corporate Social Opportunity (it may have been P&G I am not sure). Although this may work for some, for others they may not have the ability to capitalise on CSR as core to their strategy and a source fo comparative advantage or innovation.
What I would encourage for companies not yet at the CSO level is another title; one that is more short term focused, more financiall and legally focused -and thus easier to define a short-term business case: Risk Management. Whilst investigating our own CSR report, we've realised there will be a number of various focuses. 1 is what we are doing badly, not as well as we want to, or can do better and achieve more. Another 1 is what risks we face now that we are not addressing and what ones we should be anticipating in the future.
Risk Management is a really great way of defining the most pressing aspect of CSR: the one with the most examples, and the one that can most easily be understood by other Board level Directors.
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