To actually measure the contribution of an enterprise which is primarily aimed at making money, in fulfilling its social responsibilities is a tough job. It doesn’t matter even if you have words and phrases such as oversight, bubble, global humanization, moral compass, brute capitalism, cooking the books and citizenship responsibility at your disposal. The recognition of the simple fact that companies are basically profit seeking entities has to be made at the outset, while trying to build a framework for corporate conscience, citizenship, social performance, or sustainable responsible business.
Transparency and trust- The low ratings of trust within the general public for organizations has stemmed obviously from the increasing number of instances of corporate fraud and misconduct that have come in light. The situation can be salvaged by companies agreeing to be more open and accountable in addition to being prepared to report more publicly on their performance in social and environmental areas. Moral capitalism, although may sound specious at first, has to be taken seriously and strategically implemented by organizations that seek to improve on customer satisfaction. And with the kind of competition around, my guess is that most will.
Corporate Social Responsibility- The basic question is whether ethical and morally acceptable behavior can be mandated. Well, the government certainly thinks so. The Ministry of Corporate Affairs (MCA) today said that the final draft of the new Companies Bill, which promises greater shareholder democracy and stricter corporate governance norms , is ready and will be submitted to the Cabinet soon.
The main idea is purported to be directing companies to earmark 2 percent of their net profit for CSR activities, managerial remuneration and rotation of auditors. A law is however, not a certificate of intent from those who are being told to follow it and here is where “Corporate Values” come in. Says Olivier Serrat, Principal Knowledge Management Specialist in the Regional and Sustainable Development Department of the Asian Development Bank-“In a globalizing world,
meaningful values can instill a sense of identity and purpose in organizations; add spirit to the workplace; align and unify people; promote employee ownership; attract newcomers; create consistency; simplify decision making; energize endeavors; raise efficiency; hearten client trust, loyalty, and forgiveness for mistakes; build resilience to shocks; and contribute to society at large.” The advantage of building values instead of laying out rules is that when people can understand the long term implications of what they are being asked to follow, the results are far better.
The Environmental factor- No discussion about corporate responsibility can be complete without capturing the environmental aspect of sustainable development. With the growing threat to the environment, global awareness and knowledge about ways and measures to proactively counter the effects of the rapid industrial onslaught have become indispensable. A joint effort from a majority of the nations of the world in the form of the “Kyoto Protocol” came into force on 16th Feb 2005. As of July 2010, 191 states have signed and ratified the protocol whereby 37 countries (Annex 1 countries) commit themselves to reducing the percentage of collective green house gas emissions by 5.2 % from 1990 and all the other member countries give general commitments.
Sadly though, the United States of America has still not shown any interest in joining the movement against global warming proving once again that there is no green in the “Red, White and Blue”. Nevertheless, it’s a very heartening effort from leaders of the world in responding to the imminent threat and may prove to be quite an important factor in deciding the fate of this world in the long run.
Image Source: [http://ilga.org/ilga/static/uploads/images/2010/11/12/CSR.bmp]