Ethics of business or doing business ethically: defining the concept of CSR

Last week, I started off with the discussion on corporate social responsibility (CSR) in Nigeria without defining or explaining it. This week, I will begin the series of trying to explain and unpack the contents of CSR, so it provides a clearer view of this buzz word!

Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit.

The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Another line of debate is whether CSR activities are for economic gains for the corporation or purely a tool for social correctness and society imbalance. This debate is further fueled, particularly by activities of oil corporations in Nigeria. These corporations use social and economic projects/programme as a tool to win host communities support and gain social license to operate in those communities. Usually, a line is drawn from any dollar spent on CSR activities in the community to every business benefits derived from the said community.

It is this new argument that strengthens the use of government regulating mechanisms in the management of CSR, a rather altruistic action. However, businesses are complied to ethically conduct their business as good corporate citizens, bringing rise to another view of CSR as an ethics of business or doing business ethically. This whole myriad of arguments and debates all contribute to the beautiful of mosaic called CSR, which has been redefined throughout the years. However, it essentially is tilted to aid an organization's mission as well as a guide to what the company stands for as well as uphold to its consumers. It usually decides and selects who the “would-be” business partners and stakeholders are, as only aligned stakeholders both in business and ethical ideas would partner.

Next, we would be examining monitoring and evaluation which is the springboard of effective CSR. Underpinning this notion is sustainability reporting of CSR activities; but before this, we would next week, explore further the concept of CSR as an ethics of business or doing business ethically!

Corporate social responsibility (CSR) is old hat in the Western world. But how does it work in countries, where consumer and media pressure is almost non-existent? What chances does CSR have in - let's say - Nigeria, Africa? Does our Western concept work there? Does anyone care at all? One thing is for sure: More and more large companies are taking a close look at their supply chains in terms of environmental and social responsibility credentials. Not only because they believe in CSR as such, but because they are afraid of damaged reputation - and, ultimately, profit losses.

Nigerians are well known for their business sense. Still, a vast majority of Nigerians live in poverty, relying on God alone for help. Does a country of such strong belivers, some of whose churches regularly count up to 50,000 people at the same service, care about corporate behaviour? Most people don't, according to a survey, situating Nigeria together with India and Russia as one of the least demanding consumer markets worldwide. A bit of school sponsoring here, some media effective social support there - philanthropy seems prevalent in this West African federal republic with its almost 155 million inhabitants. CSR activities are often undertaken as a way of promoting a company’s image.

As the corporate responsibility website csr-weltweit puts it "Nigeria has a well-established 'culture of charity'; wealthy individuals and institutions contribute to charitable causes and use these contributions to garner positive publicity. In this respect there is little difference between the political realm and private industry."

Still, there are some promising examples of CSR in Nigeria, such as Access Bank's "Going green, beyond words" initiative. In 2009, the country has also tried to introduce a mandatory "CSR corporate tax"; money it would spend on CSR activities. Many promptly criticized the move as a mere excuse to generate more tax revenue, abusing the meaning of CSR. As CSRDigest notes: "Perhaps the bill is not the best means by which this goal can be achieved, but a quick review of the facts will demonstrate that Nigeria has been war-ridden for decades, and only recently has it begun to flourish, notably through its fast-growing telecommunications sector and other businesses. Despite this recent investment and consequent increase in wealth, 92% of the 140 million Nigerians are living on less than $2 per day."

This might be well true (unfortunately), but is it a valid excuse not to invest in CSR? The opposite, I would argue. If not the companies, who else can realistically help improve the situation? Many hopes were on the recently deceased former Nigerian president Umaru Yar'Adua, whose successor, Goodluck Jonathan was sworn in this Thursday. Will he be able to maintain the stability between the Christian South and the Muslim North? How will this change affect the country's move towards corporate responsibility?

Excerpt culled from another article!