That imaginary thing called strategic corporate social responsibility

July 2017  |  EXPERT BRIEFING  |  CORPORATE GOVERNANCE

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The term Corporate Social Responsibility (CSR) means different things to different people. In fact, the jury is still out on an apt definition for CSR. However, CSR practitioners would all agree that CSR denotes that a company is acting in a responsible and respectable manner regarding business decisionmaking, either socially, environmentally, legally and economically towards its shareholders, stakeholders, employees and other constituents. In other words, it could mean that a company is a good corporate citizen.

Due to recent developments involving CSR, it is not uncommon to find that most companies (private and public) have a CSR policy – in some cases, a CSR department, and in other very rare cases, a foundation that carries out their CSR objectives. However, CSR is much deeper than having a set of policies and setting up a department to oversee its objective. Approaching CSR from a charitable perspective at best and public relations perspective at the least leaves an incomplete understanding of the depths of CSR. When companies implement CSR without a roadmap on how it affects their mission and vision statements, they take a walk down the reigning beauty queen’s path, and their ‘pet project’ regardless of our applause, customarily dies when the queen’s reign ends.

Presently, the dynamics and demands regarding CSR have changed. It is no longer adequate to just have a CSR policy or make random corporate donations to various causes. The new issues arising among CSR practitioners are about the need to link your CSR policy to your business strategy so that it makes a positive impact both on your organisation and other stakeholders, thereby making it sustainable.

Strategic CSR

Kellie McElhaney, in an article titled ‘A Strategic Approach to Corporate Social Responsibility’, defined strategic CSR as “a business strategy that is integrated with core business objectives and core competencies of the firm, and from the outset is designed to create business value and positive social change, and is embedded in day-to-day business culture and operations”. Similarly, Heslin & Ochoa, in their article titled ‘Understanding and Developing Strategic Corporate Social Responsibility’, stated that “cutting edge CSR is more than corporate philanthropy. Strategic CSR programs provide opportunities for organisations to learn from the projects they invest in and use that knowledge to build the organisation’s core competencies, while simultaneously improving social or environmental conditions”.

Indeed, strategic CSR can lead to business value and positive change which in turn affects the company’s competencies. The Etisalat case study discussed below is an example of how Etisalat has effectively harnessed its CSR policy to be both strategic and sustainable.

The Etisalat case study

Etisalat’s CSR is beyond admirable. The company operates a CSR policy which is business strategic and infuses corporate philanthropy. A review of the company’s CSR activities would show that it is involved in a number of interests – strategically tailored to improve the telecommunications sphere in Nigeria.

One of its CSR projects is the MSc. programme in telecommunications engineering and the first of its kind in Nigeria. To achieve this, the company partnered with Ahmadu Bello University Zaria (ABU), Plymouth University, Etisalat Academy and Huawei. To ensure the continuous intellectual development of the programme, the company also sponsors ABU lecturers to undergo PhD programmes at Plymouth University and provides internship opportunities for students.

Based on the foregoing, it can be inferred that by training the next group of telecommunications engineers, the company is creating a valuable pool of local expertise from which it and its competitors can recruit in Nigeria.

Can CSR be entirely strategic in Nigeria?

Drafting a CSR policy is an arduous task, and it is much tougher to draft a CSR strategy which is business strategic. Based on the social and economic realities of Nigeria, a good CSR policy needs to have some measure of business strategy and corporate philanthropy. One of the best ways to achieve this is to have the legal, compliance and business personnel working closely to develop a CSR policy.

Notwithstanding the above, due to the abject poverty and lack of basic amenities in Nigeria, one proposition is that there must be some sort of balance. In this way, a company in crafting its CSR policy will seek to infuse business strategy plus corporate philanthropy into the drafting.

The business strategy aspect would create a mutually beneficial relationship between the company and its stakeholders, while the corporate philanthropy feature would be tailored to ensure that the company meets the charitable needs of the environment in which it operates. This is because meeting those needs can be in various diverse forms, it can be through donations when there is a catastrophe (environmental or man-made) and it can be for economic empowerment, medical donations or cancer research – the list is endless.

Moving forward – strategic and philanthropic CSR

It is important that companies seek to understand their target market in undertaking strategic plus philanthropic CSR. With the change mantra that is being tossed around the country, one thing is clear – people must be willing to adapt to changing circumstances. As such, Nigerian companies and companies operating in Nigeria or affiliated with Nigeria are advised to infuse some strategy into their CSR initiative. This has the possibility of creating a ripple effect and ultimately increasing productivity.

Furthermore, companies can leverage their products to generate synergy in creating a sustainable strategic plus philanthropic CSR. For example, Unilever, a company involved in manufacturing and marketing foods and personal care products, has leveraged its great brand to impact lives positively in line with its social mission of health and hygiene through some of its products like Close Up, Pepsodent and Lifebuoy. A number of enlightenment programmes have been organised to enlighten Nigerians on the health benefits of hand washing (strategically marketing Lifebuoy soap) and the health benefits of brushing teeth twice daily (strategically marketing Close Up toothpaste). Indeed, this is strategic plus philanthropic CSR at work.

Can CSR boards help?

Although increasingly unpopular at present, a Nigerian company has taken the bold and innovative step of establishing a CSR board committee manned by non-executive directors. Seplat Petroleum Development Company Plc has created a CSR committee that is responsible for advising the board on community and broader societal related matters, and assessing the company’s performance with regard to the impact of CSR decisions upon employees, communities and other stakeholders, among other things. If strategically harnessed, CSR boards may lead to sustainable growth while adding value to the target community.

Perhaps the jury is not out yet as more CSR boards may crop up in the wake of increased good corporate governance.

Conclusion

Clearly, there is more to say about the movement of strategic plus philanthropic CSR. However, as the CSR movement keeps growing in Nigeria, more companies will become bolder and seek to emulate the Etisalat example regarding strategic plus philanthropic CSR or the Seplat example by establishing CSR boards. After all, fortune favours the bold.

As stated above, corporate philanthropy is laudable but unsustainable. Instead, it is advisable that companies implement as structure which acts as a check to ensure that their CSR policies are being sustained.

 

Theresa Emeifeogwu is an associate at Olaniwun Ajayi LP. She can be contacted on +234 81 8046 1753 or by email: temeifeogwu@olaniwunajayi.net.

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Theresa Emeifeogwu

Olaniwun Ajayi LP


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