The Dutch Corporate Governance Code hits the nail on the head in integrating corporate social responsibility with the purpose and business goals of an organisation.
‘A company is a long-term alliance between the various stakeholders of the company,’ it says. ‘Stakeholders are groups and individuals who, directly or indirectly, influence – or are influenced by – the attainment of the company’s objectives: employees, shareholders and other lenders, suppliers, customers, the public sector and civil society.
The management board and the supervisory board have overall responsibility for weighing up these interests, generally with a view to ensuring the continuity of the company and its affiliated enterprise, as the company seeks to create long-term value for all stakeholders.’
Long-term value is the magic password, and this is accelerating the shift to purpose-driven business. In such a scenario, there is no other way to state this truth. Corporate social responsibility (CSR) priorities must be embedded in a company’s purpose, DNA and culture.
Social accountability – the driver of trust and collaboration: The fundamental premise of social responsibility is that public consent is the raison d’etre of business, and so, it should positively contribute to society. CSR therefore, cannot remain as a siloed and single-team initiative. It has to course through the organisation’s business vision, purpose and strategy – and leaders must bring in a culture of collaboration, trust and respect to embed it in the heart of their business models.
An organisation’s purpose must centre around three key elements in serving a comprehensive stakeholder ecosystem. The first rests on delighting customers, the mainstay of any business. The second focuses on engaging and enabling employees to create value. The third centres around making financially, environmentally, socially ethical decisions that create a positive impact for every stakeholder. LEGO’s ‘Sustainable Materials Centre’, dedicated to develop newer and sustainable raw materials and packaging materials, is a fine example of this.
As we move towards a more human-centred and socially responsible way of building and growing business, CSR can be an effective bridge to walk the talk in all three of them. Of the many areas that matter, this article touches on education and healthcare.
Investment in knowledge – a key imperative for the digital era: A recent survey showed that 70 per cent of companies in India plan to increase their CSR spends for education and skilling in 2022. Across industries, CSR activities in the area of education must reflect strategic and innovative thinking to enhance preparedness for the rapid developments of a digital era.
For example, WNS Cares Foundation (WCF) co-creates with schools, teachers, parents and WNS volunteers to educate, empower and enrich lesser privileged children and youth. Digital learning centres promote digital literacy, while mobile libraries bring learning to remote areas. Plus, the Foundation’s CyberSmart portal provides a holistic cyber safety learning ecosystem to empower students, parents and teachers. Through gamified learning, this free-for-all platform imparts education using a unique blend of online and offline methodology.
Investment in human capital and knowledge will create the right environment for people to experience transformation and contribute to the development of the nation’s economy. Organisations can leverage the new education policy to drive an entrepreneurial mindset in rural India and build the right ecosystems.
Revenues, profitability and market share are undoubtedly organisational performance metrics that matter. Yet, it needs to be remembered that all of these depend on consumers’ inclination to accept and advocate a brand, and investors’ conviction to invest in companies of all-round repute. The recent call of global investors (managing more than $130 trillion in assets) to more than 10,000 companies, asking them to provide environmental data to CDP, the non-profit disclosure platform, is a case in point.
CSR brings inclusive collaboration: More than ever before, an organisation’s transparency of governance, ethical soundness of workplace practices and social accountability, are becoming critical decision points of stakeholder acceptance. CSR brings inclusive collaboration to all the above business strategies, and is much more than a mere mandate to fulfil. It calls for bold leadership and clarity of vision, both from corporates and governments.
If governments wish to look at business as their partners in social and economic progress, they will need to free them from certain legal shackles, so that together, they can work towards a greater purpose. Corporations too, need to expand the understanding of shareholder value to a broader scale than just share prices. There is no value for shareholders if the world tomorrow is not a better place to live in than it is today.