Who gives a hoot?

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By Stephen Howard

Trust in business is fragile, as the Volkswagen emissions scandal demonstrated.

It was particularly interesting to see some commentators position the scandal as evidence that corporate social responsibility may be a ‘dangerous racket’ that allows companies to parade their virtue and look good, while internal standards are allowed to slip. To a certain extent I agree. CSR is dead. But only as far as the old-school model of corporate social responsibility goes, that is, good deeds and philanthropy acting as costly window dressing to spruce up the appearance of a business. This is far removed from responsible behaviour that is integrated into the fabric of how a business operates and how its people act, at all levels.

The truth is, all the carbon credits, volunteering or award wins in the world won’t offset bad behaviour occurring elsewhere in a business. Truly responsible businesses are those which go beyond CSR to recognise that business is central to creating a fairer society and a more sustainable future. They understand that business has a role to address the most pressing societal and environmental issues and that a positive relationship between business and society is mutually beneficial. 

Responsible business is not about how a company spends its money, on philanthropy or good causes. It’s about how a business makes its money and in the process, how it treats the planet, employees and suppliers, operating fairly and inclusively to all. Furthermore, genuinely responsible businesses are those which create a culture within their business in which pithy values statements and slogans written everywhere from the boardroom wall to mugs in the office kitchen – actually influence the behaviour of employees at all levels.

There is sadly still huge pressure within organisations for employees to achieve profits at all costs and we know from our research that two-fifths of managers feel pressured into behaving unethically. To address this it is important for business leaders to cultivate an environment in which their employees not only understand the wider purpose of their business, but demonstrate this understanding through their everyday work. Actively championing doing the right thing at all levels of business will give employees the confidence to speak out when their company doesn’t live up to the standards society expects.

Simply delegating responsible business to a CSR team, department or programme has had its day. Forward-thinking companies have moved far beyond this. I know from spending time in the boardrooms of some of the UK’s biggest brands from across the BITC membership, that the CEOs who really get this are genuinely thinking about the practical ways in which their entire business can create value that goes far beyond financial return. They also recognise the business case underpinning responsible behaviour with benefits ranging from unlocking innovation to attracting the best employees. 

So should businesses simply scrap costly CSR spend and donate the funds towards good causes? Of course not. To suggest so is not only naïve but misses the point entirely. I hope that one day we won’t need CSR departments and programmes, because businesses will operate responsibly as a matter of course. Until then, there is work to do and a real opportunity for organisations to step up and make responsible business the norm.

About Stephen Howard
Stephen Howard is former Chief Executive of Business in the Community, HRH The Prince of Wales’ responsible business network that helps organisations, from small enterprises to global corporations, work together to tackle some of the key issues facing society. Stephen has a wealth of senior management expertise and has held a number of different executive and non-executive roles, including Chief Executive of Cookson group plc and Chief Executive of Novar plc.

This article first appeared in Industry Magazine Issue 1.