CORPORATE SOCIAL RESPONSIBILITY
Today, there are many references to corporate social responsibility (CSR), sometimes referred to as corporate citizenship, in our workplaces, in the media, in the government, in our communities. While there is no agreed-upon definition, the World Business Council for Sustainable Development defines CSR as the business commitment and contribution to the quality of life of employees, their families and the local community and society overall to support sustainable economic development. Simply put, the business case for CSR-establishing a positive company reputation and brand in the public eye through good work that yields a competitive edge while at the same time contributing to others – demands that organizations shift from solely focusing on making a profit to including financial, environmental and social responsibility in their core business strategies. Despite what the phrase corporate social responsibility suggests the concept is not restricted to corporations but rather is intended for most types of organizations, such as associations, labor unions, organizations that serve the community for scientific, educational, artistic, public health or charitable purposes, and governmental agencies.
In the late 1990’s, CSR began to gain momentum as pressure from consumers, the media, activists and various public organizations demanded that companies contribute to society. In large part, the increasing focus on CSR has been fueled by a number of events in recent years, such as the highly publicized financial scandals of Enron and WorldCom, alleged sweatshop labor by retail clothing and sports shoe manufacturers and the alleged “under-the-table” deals that companies such as Halliburton have received. Now, reputation, brand, integrity and trust are increasingly considered important measures of corporate social responsibility.
Worldwide, companies and their HR leadership are coming to grips with what exactly CSR means in their organizations and how to strategically include CSR within business goals and objectives. There is growing evidence pointing to the validity of and the demand for CSR. For example, 82% of companies noted that good corporate citizenship helps the bottom line and 74% said the public has the right to expect good corporate citizenship.
HR Leadership Role
With company reputation, viability and sometimes survival at stake, one of the critical roles of HR leadership today is to spearhead the development and strategic implementation of CSR throughout the organization and promote sound corporate citizenship. Attracting and retaining competent people is one of the primary business reasons for CSR. While strategically including CSR in the organization can begin from different points, it makes good business sense for HR to head the process and partner with strategic leaders in the firm because human capital is arguably the number one intangible value driver.
Many HR leaders are already looking ahead to the future. According to the SHRM 2004-2005 Workplace Forecast, key HR trends are 1) demonstrating HR’s return on investment; 2) HR’s role in promoting corporate ethics; and 3) building people management and human capital components into key business transactions. As this report documents, some HR leaders are taking action now:
• 63% are increasing spending on learning and training initiatives
• 40% are changing company policy as a response to environmental issues
• 36% are changing company policy as a response to grassroots pressure to change specific business practices.
• 32% are increasing involvement in social programs.
HR leaders can influence three primary standards of CSR – ethics, employment practices and community involvement – that relate either directly or indirectly to employees, customers and the local community, as outlined below. By considering these three CSR standards, HR leaders can they identify the CSR stage of their organization before making decisions to develop and implement CSR initiatives?
• Ethics- Ethical standards and practices are developed and implemented in dealings with all company stakeholders. Commitment to ethical behavior is widely communicated in an explicit statement and is rigorously upheld.
• Employment Practices- Human resource management practices promote personal and professional employee development, diversity at all levels and empowerment. Employees are valued partners with the right fair labor practices, competitive wages and benefits and a safe, harassment-free, family-friendly work environment.
• Community Involvement – The company fosters an open relationship that is sensitive to community culture and needs and plays a proactive, cooperative and collaborative role to make the community a better place to live and conduct business.
Next prior to launching and/or evaluating CSR initiatives in the organization, consideration of principles, implementation an employer brand will assist HR leaders in determining how and/or why to include CSR initiatives in their company. First, questions of principle provide the broad view of CSR – moving from philanthropy and donations to contributing solutions to help solve the large issues such as poverty. Second questions of implementation address practical issues such as incorporating CSR into the performance appraisal process and the softer issues of creating an organizational culture that supports CSR initiatives. And third questions, regarding employer brand provide an opportunity for HR leaders to look closely at how their current policies and programs can more positively affect recruitment, retention and talent management.
Taking the long-range view, HR leaders can use a checklist to track the HR scorecard on CSR as initiatives are developed and implemented over time (see below). As appropriate, changes in direction can be made to correspond with the organization’s overall strategy.
• Create a strong organizational culture around core company values.
• Scan the environment to identify potential threats (e.g., competition for talent within the organization’s industry sector)
• Build personal and in collaboration with other organizations).
• Include ethical concerns in staff performance measures.
• Support participative decision – making
• Ensure highest standards in workplace health and safety.
• Encourage active engagement in community activities.
Focusing on company values, HR leaders set the tone for an organizational culture that is open to and understands CSR. HR’s role as a change agent – grounded in mutual respect, and open and honest communication – is essential to educate management and employees about including CSR when setting business goals and objectives. Three practical steps to promote change regarding CSR are to 1) establish a workable stakeholder consultation process; 2) use the process to understand the local culture (e.g., internal-the workforce – or external-the community) at all stages of implementing CSR; and 3) create a sense of ownership between the staff who set up a project and those who implement it.
Beyond including CSR in the HR management system, HR’s role as a change agent continues through keeping the CEO and other members of the senior management team informed of human capital initiatives, the status of community relations, measurements of employment activities and development of partnerships for CSR programs, both inside and outside the organization.
In conclusion, with the growing importance of human capital as a success factor for today’s organizations, the role of HR leadership will become evermore critical in leading and educating organizations on the value of CSR and how best to strategically implement CSR policies and programs domestically and abroad.
