Corporate Social Responsibility

“How selfish so ever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”

Adam Smith, The Theory of Moral Sentiment, 1759.

COMMUNITY ENGAGEMENT PROGRAMMES

A BRIEFING

Ideally, a company’s community engagement should be based around a schedule of planned and managed activities, that not only enhance its relationships with the communities it serves, (or on whom it impacts) but also contribute to those communities well-being.

It should be the most visible demonstration of a company’s corporate ethics and entail many different sorts of initiatives and actions, including sponsorships, donations to community partnerships, employee volunteering and charitable support.

However, in general, it involves a company giving either (or a combination of), it’s time, financial donations, product or support-based services, to the selected social or environmental cause.

It is important to remember that the interests and benefits of and to the community remain at the centre of the programme. However, it is perfectly acceptable to expect where appropriate a quid pro quo, but it must be subservient to the main aim of delivering a community benefit.

There are therefore three main areas of benefit for a company which are

  • the enhancement of their reputation to
    • consumers
    • investors
    •  employees
  • Improved staff retention rates and higher productivity.
  • Improved relationships with the local and regional government, planning and licencing bodies, as a result of a company’s reputation

A company should believe that by demonstrating a set of strong values and a commitment to the community, it will enjoy an improved reputation that differentiates it from its competitors.

THE BENEFITS FOR A COMPANY’S COMMUNITIES

Access to jobs and livelihood development

  • a company is by its very presence providing employment and potentially creating training and development programmes, which hones the skills, abilities and confidence of their employees to be able to earn a living anywhere in the world, (subject to the usual provisos), – which in turn allows the employees to take leadership roles in improving and developing their communities.
  • Employment promotes self-reliance, confidence, and resourcefulness – and more importantly lowers the risk of child poverty, ill health, crime and homelessness.

Environmental improvements

A company’s focus on recycling, green energy, environmentally sound building designs, and various waste management solutions, can also be supported by their consideration and support for community ecological education, local clean-ups, wildlife or water conservation, recycling or energy efficiency, programmes, all resulting in improved quality of life and more efficient use of resources.

Infrastructure and facilities investment

A company can often improve a satellite units’ capacity to support the local community infrastructure for example; perhaps by providing better car parking; creating and replanting gardens.

Conservation of local heritage

A company’s community engagement often helps to sustain traditional arts, crafts and ways of life – and therefore livelihoods. Consider for example, a hospitality company incorporating local fabrics, toiletries, candles, diffusers etc in their bedrooms.

HAS YOUR COMPANY ACHIEVED EFFECTIVE COMMUNITY ENGAGEMENT?

A Clear Strategy

A company’s strategy should be based on a defined alignment with its business objectives and ideally related to a company’s core capabilities (see below), rather than supporting a series of ad-hoc community requests.

To make the programme “real” – or valid, the communities themselves should understand why a particular cause is supported and how that aligns not only with the community but also with the business. In that way, a company is more likely to engage with the various stakeholders and to avoid accusations of greenwash.

A company should choose its activities carefully

Research has clearly shown (Note 1) that focused, well-chosen endeavours in a small number of relevant areas will deliver greater recognition and appreciation in those communities.

Focus on a company’s core attributes

Establish with those running or managing the programme; as well as with those benefitting, and those supporting it, precisely what your core attributes and competencies are. You might consider that potentially involving staff training and development, environmental concerns, local wellbeing, child welfare and European-wide cooperation.

Community projects should generally be viewed in the long-term

There is always a risk that quick-fix solutions (projects and donations) might create dependency, so a company’s activities should try to support projects that bring long-term benefits. However, highly-visible short-term, local projects, such as sponsoring Christmas lights, can help enhance the reputation and gain local approbation.

Gauging the social value

Patently, and put vulgarly, a company needs to assure both its own management and its’ investors that its community engagement programme is delivering “bang for bucks”. A company will, in essence, want to know the effect of its investment; how the local community perceives it; and if (and how) it brings business value.

In that respect, probably the most popular external agency would be the London Benchmarking Group (LBG) and its capabilities include the measurement of a company’s overall contribution to the community in time given and expended, money invested, management costs and in-kind donations. Additionally, it also assesses what the ROI is in terms of the impact on the business and the benefits to the community itself.

THE BENEFITS IN BRIEF

  1. If they love you, they will support you. They will come, and they will spend money. That means you maintain the marketing budget, possibly even reduce it, rather than increase it to find customers.
  2. If they love they will talk about you. Brand advocates or ambassadors are doing the marketing of your brand for you, building your reputation and increasing awareness.
  3. If you love them, you will know and deliver their needs.
  4. If there are three restaurants next door to each other, the first choice will be the one that you like best, that delivers what you want, but which also mirrors your values and social responsibilities.

THE NEXT STEPS

Establishing the precise current situation

A company needs to establish the exact cost and ROI of the current myriad programmes, including time spent, wage and operational costs of staff, support costs, donation costs, product costs and so on.

CSR – Separate and Outsource the function

In the broadest of terms, the entire Community engagement or social responsibility programme is a function of a Marketing department. However, in terms of the management time and space needed, the process should perhaps be considered as suitable for outsourcing, which would provide an agreed reporting and management structure over which a company could maintain tight control and improve newsflow

To Trust or Not to Trust

Consideration should be given to the creation of A Company Trust (or ..Foundation). It would be a UK-registered charity run externally by a trusted administrator and with a board of trustees consisting of a Main Board director as Chair – two rotating staff members – two rotating shareholders (not main board members).

The Trust would be funded by an annual donation by the Company to be agreed, and which would provide funds and coordination for all the major agreed CEP projects.

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