The concept of Corporate Social Responsibility (CSR) has been concerned with the need for a strong and moral ecology which reflects the wider social and cultural morals of the society. For this ecology to be developed there is a need for support, not only from governments, but from all stakeholders, not the least from the private business sector.
Over time, the private sector has always been subject to public scrutiny. What we understand today by corporate social responsibility has been influenced enormously by our various economic systems, the evolution of the modern corporation and the emergence of theories of Corporate Responsibility itself.
The 1909 case of Cadbury is a notable example to mention in an attempt to putting CSR in context. These issues were in many ways the same as those today. Firstly, companies were then and are now felt by many to have a duty to uphold certain human rights, even when there is no legal liability. Secondly, Companies that purchase commodities or manufactured goods were held to have influence over, and responsibility the behaviour of their producers. These principles were apparent in the 1909 court case and are central to areas to modern corporate social responsibility such as ethical trade.
Corporate Social Responsibility came into being in the 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization’s activities have impact. It was used to describe corporate owners beyond stakeholders as a result of an influential book by Edward Freeman titled ‘Strategic Management; a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window dressing, or an attempt to pre-empt the role of government as a watchdog over powerful Multinational Corporations.
DEFINITION OF CORPORATE SOCIAL RESPONSIBILITY
The term ‘Corporate Social Responsibility’ could also be referred to as Corporate Conscience, Corporate Citizenship, and Social Performance. It is a form of self regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goals of CSR is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.
CSR is titled to aid an organization’s mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adhere to similar principles but with no formal act of legislation. The U.N has developed the principle for responsible investment as investing entities.
The world Business council for sustainable development in its publication; making Good Business Sense by Lord Holmes and Richard Watts, defined corporate social responsibility as 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 the local communities and society at large.
A well managed CSR helps in supporting the business Objective of the company, build relationships with key stakeholders whose opinion will be most valuable when times are hard, and should reduce a business cost and maximize its effectiveness.
ARGUMENTS AGAINST THE CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY
Criticisms and Counter-Criticisms have trailed the concept of CSR and it has been given audience, would have portended doom to the existence of the CSR. One of the challenges faced by this concept is the challenge of definition that people use. We assume here that we are talking about responsibility in how the company carries out its core function – not simply about companies giving money away to charity.
Some key arguments and some responses that have emanated from the concept of CSR are:
1. Businesses are owned by their shareholders – money spent on CSR by managers is thefty of the rightful property of the Owners who are the company’s Shareholders. This obviously is the voice of the laissez faire 1980s, still being given powerful voice by advocates such as Elaine Sternberg who argued that there is a human right case against CSR, which is that a stakeholder approach to management deprives shareholder of their property rights. She further stated that the objectives sought by conventional views of social responsibility are absurd. Not all aspect of CSR are guilty of this however, Sternberg added that ordinary decency, honesty and fairness should be expected of any corporation.
2. The leading companies who report on their social responsibility are basket cases – they argued that most effective business leaders don’t waste time with on CSR. This argument was that CSR were mere cosmetic disclosures stating further that when surveys are carried out of the most respected Business leaders, you will often find names there, such as Bill Gates of Microsoft, a few years ago have not achieved their world class status by playing nice, Welch is still remembered for the brutal downsizing he led his business through, and for the environmental pollution incidents and prosecutions. Further pointing out that Microsoft has had one of the highest profile cases of bullying market dominance of recent times and Gates has been able to achieve the financial Status where he can choose to give lots of money away by being ruthless in Business. They opined that this very point proved that Real Men don’t do CSR and that we don’t live in a world where virtue is always seen to be rewarded.
3. Companies are too busy surviving hard times to do this; we can’t afford to take our eyes off the ball – we have to focus on core business. – They argued that it was well for the big companies who could doll out huge sums of money for CSR and that their companies lacked such capacity to replicate same gesture to the society. Stating further that for those fighting for survival, it’s a very difficult for them to do likewise. Stating that, you can’t go spending money on unnecessary frills when you’re laying people off and morale is Rock Bottom. And the odd bit of volunteering employee won’t make any difference to the Society when they feel cynical and negative about how the company operates. They equally argued that managing your Social responsibility is like managing your business and that you can never do it too well. That no matter how much you try to please the society, it would never bees seen as substantial enough and so what was the point of engaging it an exercise in futility.
4. It’s the responsibility of the politicians to deal with all this stuff. It’s not our role to get involved. This view is of the opinion that Business has traditionally been beyond morality and public policy. We will do what we are allowed to do. They are of the opinion that the government should be solely charged with the responsibility of rendering services and providing a legal framework that says what the society will subscribe to, and that there is no point for instance allowing smoking to remain legal – even making large tax receipt from it – and then acting as though tobacco companies are all immediately beyond the pale.- if you think its so dreadful, you should make it illegal. If not, then we all should get on with the job of meeting the demand out there of Adults who can choose for themselves.
5. I have no time for this, I’ve got to get out and sell more to make our profit line. This group of people are of the opinion that they do not have enough time to spare for the execution of CSR and that they needed to channel their time and energy on meeting the profit line neede3d for the company to survive competitively.
6. Corporations don’t really care – they are just out to screw the poor and the environment to make their obscene profits. Some corporations don’t really care about contributing to the development of their host community but are head bent on harming the environment for the benefit of their business. Examples of such companies are the Oil and Gas Exploration companies who just keep degrading their host environment without adequate compensation or seen rendering CSR’s that are quite commensurate to the level of destruction they have caused to their immediate environment, and this has led to mass uprising against them where the host communities take up arm against them and make the region uninhabitable for them to operate. This has been seen in Nigerian Communities like the Ogoni’s In Rivers State, where the illicit and inhumane activities of Oil Companies have made their naturally blessed clean streams and air polluted for them to consume and breathe respectively.
VARIOUS VIEWS ON THE CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY ACROSS THE WORLD
It won’t be out of place to discuss the concept of Corporate Social Responsibility without taking into consideration how it is been perceived in other parts of the world. CSR, the set of standard to which a company subscribes to in order to make its impact on society, has the potential to contribute sustainable development and poverty reduction in the world. What can be questioned though is if the CSR model developed in the west are the best suited for CSR institutional and management models exported to other regions of the world are not always very successful. In the light of this, it is deemed pertinent that various models from across the world are studied with a view to striking a balance on the need for CSR.
THE AMERICAN PERSPECTIVE
Traditionally in the U.S, CSR has been defined more in terms of Philanthropic 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 Americans do not see corporate social responsibility as something that has to do with morals or traditional ethics; rather they see it as something that is done maybe to perceive an entrepreneur as a philanthropist. This is evident on the various criticisms that have been levelled against the concept. One could simply sum up a conclusion that Organizations would ordinarily not want to imbibe the culture of social responsiveness to their various community unless it is made compulsory. For all Business Entities to be socially responsible there has to be an enactment of laws stating its compulsion and the consequences of defaulting.
THE EUROPEAN PERSPECTIVE
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. 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 maximize the value of wealth creation to society.
When times gets hard, there is the incentive to practice CSR more and better – if it is a philanthropic exercise which is peripheral to the main business, it will always be the first thing to go when times gets hard.
However, the Business definition of CSR is described as Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business.
On the Other hand, the European Commission hedges its bet with two definitions wrapped into one:
1. As a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.
2. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their Stakeholders on a Voluntary Basis.
When both are critically reviewed, they broadly agree that the definition now focuses on the impact of how you manage your core business. Some go further tan others in prescribing how far companies go beyond managing their impact into the terrain of acting specifically outside of that focus to make a contribution to the achievement of broader and societal goals. It is a key difference, when many business leaders feel that their companies are ill equipped to pursue what boarders societal goals and activists argue that companies have no democratic legitimacy to take such roles.
CORPORATE SOCIAL RESPONSIBILITY AS IT RELATES TO BUSINESS PERCEPTION FROM THE PUBLIC
Public Opinion is indeed not to be underestimated in Business as this could determine the Fate of a Business Entity to Exist and compete favourably with its counterparts. If the concern of the Principles of Going-Concern is to be made manifest, it is therefore pertinent that the Reputation and Image of the Company is well Established and handled in a way that will make the Company appear in good light by portraying Features of a Good and Responsible Business Set up. This can only be made possible if the Company shows true and Germane Interest in the welfare of its citizenry through various practices of Corporate Social Responsibility Gestures. No Doubt people want to associate themselves with Businesses that are well established in good reputations. Therefore the need for a concerted and deliberate effort is imminent to pursue this course.
Goodwill as we all know is intangible in nature. Its volume or Value can never be summed up in Measure and this could be the distinguishing factor between one business and the other. Building a good business reputation as a responsible business outfit sets you apart from your equal. This makes an organization to be widely accepted by the people by having a sense of belonging, Boost Competitive Trade Advantage amongst competitors, and become a partner in progress. Perception in Business is not to be underestimated as it could be the Thin Line between Prosperity and Doom.
A well managed CSR helps in building a Good relationship with key stakeholders whose opinion will be most valuable in times of Adversaries and uncertainties, and it also reduces business cost and maximize its effectiveness. Ultimately, This also could influence the people’s choice of Doing Business. Most appropriately, it is necessary for a company to be seen as a partner in progress rather than being seen as the People’s Enemy. This of Course would affect Business Adversely. It could Even Cost the Business Its life. Some customers don’t just prefer to deal with responsible business outfits, but they insist on it. Often times Some companies are seen favouring supplies to business outfits who demonstrate responsible policies as this can have a Positive impact on how they are perceived by customers.
However, Business Managers Should see Corporate Social Responsibility as a Means to foster a good Relationship between their firms and the Society for their own good. Based on the Foregoing, It is therefore important for it to make the most of its corporate social responsibility activities by publicising them by ensuring that customers, suppliers and the local community know what it is doing. CSR lends itself to Good News Stories. Publicity such as this can produce the Magic of using CSR to win lots of contracts.
It is a known fact that people want to buy from businesses they respect and in earning this respect, a firm has got to earn it by being socially responsible.
AN ACCOUNT OF THE NIGERIAN EXPERIENCE OF CORPORATE SOCIAL RESPONSIBILITY
(Governance and corporate Social Responsibility in Nigeria)
A fast growing trend in the business world is the evolution of Corporate Social Responsibility packages by Multinationals and other Corporate Bodies. This is not unconnected with public outcries over the adverse effect of day-to-day business activities of the companies, how it affects the environment, economy and the lives of the host communities.
Corporate Social Responsibility is a set of standard to which a company subscribes in other to make an impact on society. Its potential to contribute to sustainable development, poverty reduction, caters for the vulnerable and senior citizens as well as contributes to national economy and private enterprise. This in recent time is fast becoming an apology medium for vagrant abuse of social responsibility and protection of the environment in the scramble for maximizing profit.
From the Oil Multinationals in the restive Niger Delta region of Nigeria, Telecommunications Giants, drug makers, down to the consolidated banking sector. It has become en vogue to engage in highly publicized charitable and philanthropic ventures as an act of Corporate Social Responsibility (CSR) to plicate the abused public. Over time, Multinationals in Nigeria simply signs agreements with indigenous government without difference to the immediate host communities. This of course is what informed the series of various protracted restiveness in the Oil Rich Niger Delta, as the multinationals for decades have continued to violate environmental rules to the detriment of the host communities like Ogoni land as well as being accomplices in the brutal violation of human rights in these communities by successive civilian and military government.
When the draconian government of the late dictator, Gen. Sanni Abacha hanged frontline Author and activist Ken Saro-Wiwa and eight other members of the Movement for the survival of the Ogoni People (MOSOP): Against local and international outcry in 1995, Oil Multinationals like shell could not exonerate itself from the complicity in the killings because they failed to meet the legitimate claims of the host-communities for reduction of environmental pollution through spillage and Gas flaring without tangible Compensation. Shell would have been deemed socially responsible if it has meaningfully provided employment for the host communities, Social Infrastructural development and payment of Royalties and Compensation for such abuses rather than cheating the host communities in connivance with a Non-chalant government who continue to ignore this until the court judgement of compensation against shell on the Ogoni Martyrs.
To Curb such abuses, Fiscal Responsibility of government to the citizenry must correspond to the Social Corporate Responsibility activities of the corporate sphere to the people. This will help to placate the rampant violence in the ever-restive Niger Delta and the South Eastern zone of the country where militancy, Pipeline vandalism and most recently, the rampant abduction of both expatriates and targeted individuals of huge Ransom are on the increase. Recent History has shown the effect of Militancy on national security, socio-political activities as well as the economy. A glimpse of this is the unrest that led to the declaration of the state of emergency in Bayelsa State in 1998 and forced withdrawal of oil multinationals from the region, partial and final shutdown of the country’s oil output.
The Recent settlements of victims by drug giant Pfizer international incorporated in a lawsuit over the ill fated Trovan antibiotics experiment on children during a meningitis outbreak in Kano state is another abuse of Corporate Social Responsibility. The company and the concerned parties agreed to settlement of $75million. A Pfizer spokesman as quoted by the Associated Press release of 29th July 2009 affirm that Pfizer stands by the 1996 study it conducted with the approval of the Nigerian Government at consent of the participants’ parents pr guardians was taken and the study was consistent with Nigeria’s laws.
The criminal abuse of our Children as experimental Guinea Pigs by Pfizer: when called upon for help by the government in the midst of an endemic outbreak is untenable. It does not exonerate Pfizer form this unfortunate incident and it is an indictment on the government as an accomplice since they failed innocent victims, the Children in the constitutional discharge of the public fiscal responsibility function to the citizen as enshrined in the Fiscal Responsibility Act 2007. By not checking for facts on the risk of such unprecedented experiment on these innocent children, government thus became an accomplice in this gross abuse of Social justice both from the multinational and from the government. This made Richard Altshuler an Activist to argue that the settlement agreement short charges the victims and benefits Nigerian officials in millions of Dollars. Even the government is getting over$10 million as litigation cost.
Moreover it negates the ethics of Corporate Social Responsibility when Pfizer desires remittance of the leftover funds from the settlement money to its coffers as against earlier agreement that the $30 million leftover go into the construction of a hospital in the state metropolis. More so, to misconstrue this turn of events as a real Corporate Social Responsibility In its self will be an Aberration. This is because not even the compensation money which is a punitive action can correct the ugly event.
Coming to the telecommunication sector, multinationals in this sector are also in the philanthropic zeal of CSR. MTN for example came up with its MTN Foundation and its pet project, Children at Risk Empowerment Scheme (CARES) to provide psychosocial Support to aid the child to grow up in a Social and psychological environment. This project targeted at children who have lost both parents: a laudable initiative no doubt. But they must be seen doing beyond this in the aspect of sponsoring lots of scholarship and donation of laboratories and cancer treatment equipments among other packages to schools and teaching hospitals all over Nigeria.
In the light of the foregoing, a Holistic approach is sacrosanct to true Corporate Social Responsibility in our society. The government must create the enabling environment by aggressively tackling the issues of security, power and poverty to the bearest minimun. thus the Multinationals have a choice to live up to the credo of Triple Bottom Line; make Profit, care for the environment and uphold social justice. While the federal government struggle to deliver on security to private enterprises, good governance to the citizenry and its other commitments to its multinational partners, notwithstanding, the Nigerian government must be worthy of the people’s trust by guiding the multinationals to stop using double standard on the prevention of oil spillage, gas flaring eradication timeline as well as fair dealings with labour unions in their business dealings.
In the light of the foregoing, a Holistic approach is sacrosanct to true Corporate Social Responsibility in our society. The government must create the enabling environment by aggressively tackling the issues of security, power and poverty, Thus the Multinationals have a choice to live up to the credo of Triple Bottom Line; make Profit, care for the environment and uphold social justice. While the federal government struggle to deliver on security to private enterprises, good governance to the citizenry and its other commitments to its multinational partners, notwithstanding, the Nigerian government must be worthy of the people’s trust by guiding the multinationals to stop using double standard on the prevention of oil spillage, gas flaring eradication timeline as well as fair dealings with labour unions in their business dealings.
EMERGING PATTERNS OF CORPORATE SOCIAL RESPONSIBILITY IN FIRMS OPERATING IN NIGERIA
There are three key strands of CSR expression in Nigerian Organization; they include Philanthropic, economic Support and Compensatory. Philanthropy refers to a humanitarian and charitable service projected to the people by the corporate organizations. Firms through their benevolent activities make the people to feel good about their operations. The firms in the local communities have often embarked on donations of meager sum to community development, cultural practices and celebrations.
The other strand of CSR practiced in Nigeria is tagged as Economic Support. In this case, the corporate organizations help by providing social amenities like portable water, building and maintenance of schools, maintenance of parks, promotion of basic and primary healthcare scheme, launching of empowerment schemes, for the less privileged etc.
The third is the Compensatory CSR strand which is gradually gaining ground. Organizations compensate the Nigerian government, communities, and individuals for certain operational breaches that have occurred during the production process. These three expressions of strands of CSR can be seen in the several organizations in Nigeria such as the United Bank for Africa, (UBA), and MTN Nigeria.