Course: Corporate Social Responsibility

Answer 1: Introduction: Corporate Social Responsibility (CSR) refers to when companies conduct their
business in an ethical way. This means that they consider their social, economic, and environmental
impact and human rights.

CSR is something that all businesses, big and small, should invest in. Many consumers research a
business’s commitment to CSR before they do business with them. In fact, a whopping 90% of
consumers would boycott a company if they learned of irresponsible or defective business practices.
This highlights just how important CSR is for all businesses.

Below are five ways that your company can craft an effective corporate social responsibility program
that is strategic and sustainable:

1. Build your strategy around your company’s core competencies.

There are many worthy causes companies can choose to support, but without focus and alignment
around what your business already does well, CSR efforts may be less effective. If a company has
developed strengths, research, and knowledge in a specific area, supporting a cause that aligns with that
expertise can be both a win for community partners and the company with new customer visibility and
revenue streams.

2. Recognize issues that matter to your customers.

It’s no secret that corporate citizenship efforts can promote a positive brand association for companies,
but do customers really care? The answer is a resounding “yes.” According to a Cone Communications
CSR Study, 87% of consumers would purchase a product based on a company supporting a social or
environmental issue the consumer cares about. Consumers are rewarding socially responsible
companies through brand loyalty, making donations to charities companies support, and purchasing
products that provide a social benefit.

3. Develop CSR initiatives that make your employees proud.

Strategic companies are also using CSR programs to protect and grow their biggest asset—their
employees. Seventy-six percent of millennials consider a company’s social and environmental
commitments when deciding where to work and 64% would not take a job if a potential employer didn’t
have strong corporate social responsibility practices in place.

4. Measure the ROI of your CSR efforts for the C-suite and your investors.

Measuring CSR programs can be overwhelming, especially when initiatives can span many different
departments such as human resources, marketing, sustainability and compliance. However, developing
an organized framework for reporting that links efforts back to strategic priorities for the business will
inform your C-suite and investors if your CSR efforts are affecting your company’s performance. Seek to
quantify socially conscious efforts that are directly tied to the company’s bottom line—for example,
activities that drive cost savings, new customer acquisition, and brand awareness.

5. Expand your company’s definition of CSR.

Traditionally, efforts aimed at reducing environmental resources, annual giving programs, and cause
marketing campaigns largely defined good corporate citizenship. And while those efforts are valuable,
consumers and companies alike have grown and become more innovative in how they define a
responsible company.

But even a modest effort can pay dividends in both positive publicity and customer loyalty. Here are a
few suggestions:

 Define your messaging. Don’t strike blindly at different goals, such as preserving rainforests one
quarter and then investing in a community project the next. Come up with causes that resonate
with your business culture, research the kind of support they need, then pick one and stick with
it. One is enough for a small business – and don’t feel pressured to donate more funding or
assistance than you can afford.
 Involve your customers. If you haven’t picked a cause yet, come up with a list of alternatives and
ask your web site visitors and Facebook fans to vote on which one they would like to see you
support. Or actively seek their assistance, such as bringing old but usable technology into your
store so that you can donate them to students in underfunded schools. Make sure you offer a
potential reward, such as holding a raffle for all participants.
 Create a scorecard. Make sure it features achievable and measurable goals and keep it visible on
your site, tracking your progress. Be honest about any setbacks – you want the tone to be
authentic, not promotional.
 Use social media. Don’t just tell your customers what you’re doing; solicit their ideas,
experiences, and concerns to get them invested in your projects. Make sure you use multiple
digital platforms – such as blogs, Facebook, Twitter, and a YouTube channel – to reach people
with different media preferences.
 Partner with a third party. Forming an alliance with a non-profit will not only lend credibility to
your efforts, but let you benefit from the non-profit’s greater experience in fundraising and
philanthropy. The alliance will also offer an opportunity to blend customers and networks.
 Seek publicity. If you’ve never sought media coverage for your business before, this might be
the time to start. Send out a press release about any contests, events or fundraising drives – and
reach out to media outlets that present on green topics as they’ll be apt to give you positive
coverage.
 Repurpose your CSR reports. Using charts, stories, and photos in your annual reports and
newsletters will appeal to stakeholders and shareholders alike.

Answer 2: Corporate social responsibility (CSR) refers to strategies that firms employ in their corporate
governance that are ethical, societally friendly, and beneficial to its community. In other words,
corporate social responsibility is a firm’s commitment to being socially responsible and in-line with
public expectations.

Categories of CSR

Although corporate social responsibility is a very broad concept that is understood and implemented
differently by each firm, the underlying purpose of CSR is to operate in an economically, socially, and
environmentally sustainable manner.

Generally, corporate social responsibility initiatives taken by a firm fall into four categories:

Environmental responsibility

Environmental responsibility initiatives taken by a firm can involve reducing pollution, greenhouse gas
emissions, and the sustainable use of natural resources.

Human rights responsibility

Human rights responsibility initiatives taken by a firm can involve providing fair labor practices (i.e.,
equal pay for equal work), fair trade practices, and disapproving child labor.

Philanthropic responsibility

Philanthropic responsibility initiatives taken by a firm can involve funding educational programs,
supporting health initiatives, donating to worthy causes, and supporting community beautification
projects.

Economic responsibility

Economic responsibility initiatives taken by a firm involves improving the firm’s business operation while
participating in sustainable practices. For example, using a new manufacturing process to minimize
wastage.

Business Benefits of CSR

In a way, corporate social responsibility can be seen as a public relations effort. However, it goes beyond
that; corporate social responsibility can boost a firm’s competitiveness. The business benefits of
corporate social responsibility include:

Stronger brand image, recognition, and reputation

CSR adds value to firms by establishing and maintaining a good corporate reputation and/or  brand
equity.

 
 Increased customer loyalty and sales

Customers of a firm that practices CSR feel that they are helping the firm support a cause.

Operational cost savings

Investing in operational efficiencies results in operational cost savings and reduced environmental
impact.

Retaining key and talented employees

Employees stay longer and are more committed to their firm knowing that they are working for a
business that practices CSR.

Easier access to funding

Investors are more willing to support a business that practices CSR.

Reduced regulatory burden

Strong relationships with regulatory bodies can reduce a firm’s regulatory burden.

Benefit 1: The ability to have positive impact in the community

Keeping social responsibility front of mind encourages businesses to act ethically and to consider the
social and environmental impacts of their business. In doing so, organisations can avoid or mitigate
detrimental impacts of their business on the community. In some cases, organisations will find ways to
make changes in their services or value chain that actually delivers benefits for the community, where
they once didn’t.

Benefit 2: It supports public value outcomes

Put simply, public value is about the value that an organisation contributes to society. A sound, robust
corporate social responsibility framework and organisational mindset can genuinely help organisations
deliver public value outcomes by focussing on how their services can make a difference in the
community. This might happen indirectly, where an organisation’s services enable others to contribute
to the community, or directly through the organisation’s own activities, such as volunteerism and
philanthropy.
Benefit 3: It supports being an employer of choice

Being an employer of choice typically translates into the company’s ability to attract and retain high
calibre staff. There are ways to approach being an employer of choice, including offering work life
balance, positive working conditions and work place flexibility. Studies have shown that a robust
corporate social responsibility framework can also help a company become more attractive to potential
future employees who are looking for workplaces with socially responsible practices, community
mindedness and sound ethics.

Benefit 4: It encourages both professional and personal development

Providing employees with the opportunity to be involved in a company’s socially responsible activities
can have the benefit of teaching new skills to staff, which can in turn be applied in the workplace. By
undertaking activities outside of their usual work responsibilities, employees have the chance to
contribute to work and causes that they might feel passionate about, or learn something entirely new
which can help enrich their own perspectives. By supporting these activities, organisations encourage
growth and support for employees.

Benefit 5: It enhances relationships with clients

A strong corporate social responsibility framework is essential to building and maintaining trust between
the company and clients. It can strengthen ties, build alliances and foster strong working relationships
with both existing and new clients. One way this can be achieved is by offering pro-bono or similar
services where a company can partner with not-for-profit organisations to support their public value
outcomes, where funds or resources may be limited.  In turn, this helps deliver public value outcomes
that may not have been delivered otherwise.

Answer 3a: Voluntary codes are codes of practice and other arrangements that influence, shape, control
or set benchmarks for behaviour in the marketplace. They encourage companies and organizations to
conduct themselves in ways that benefit both themselves and the community. They can also serve as a
sign to consumers that the organization's product, service or activity meets certain standards.

Voluntary codes exist for a range of industries, products and services, and address many aspects of
marketplace behaviour. Some have become so much a part of the culture that consumers may not
recognize them as voluntary codes. The care tags on clothing, for example, are part of a familiar
standard adopted voluntarily by the garment industry.

Voluntary codes go by several names, including codes of conduct, codes of practice, voluntary initiatives,
guidelines and non-regulatory agreements. 1 No matter what they are called, though, they have certain
things in common:

 They are a set of non-legislatively required commitments.

  One or more individuals or organizations agree to them.

 They are designed to influence, shape, control or benchmark behaviour.

 They are to be applied in a consistent manner or to reach a consistent outcome.

A voluntary code may consist of several documents, including a general statement of principles and
obligations, as well as technical agreements pertaining to specific operational aspects such as reporting
requirements and dispute-resolution powers. In this Guide, all of these documents taken together
comprise a code.

Examples of Voluntary Codes

 The GAP clothing chain Sourcing Code requires suppliers (many in Third World countries) to
meet certain labour-related standards, and suppliers must follow the code to keep their
contract with the company. Following pressure from consumers, labour and others, third party
monitoring of code compliance is now taking place.

 Members of the Canadian Direct Marketing Association (CDMA) must meet the terms of several
codes to remain members. For example, one code protects customer privacy and limits the
sharing of customer information. Only CDMA members that comply with the codes can display
the CDMA logo in their advertisements and on their products. CDMA members include
companies, as well as charities and other non-profit organizations, that use direct marketing.

Features of Voluntary Codes

 Individual firms or industry associations, governments or other groups such as non-profit,

public-interest and standards organizations can initiate, develop or adhere to voluntary codes.
While one organization may initiate a code, others may help to develop and apply it.
 A voluntary code can apply to a single store or company, several firms or organizations, an
entire sector or many sectors. A code can also be national or international in scope.
 Codes are usually initiated in response to consumer or competitive pressures, the real or
perceived threat of a new law, regulation or trade sanctions, or a combination of these.

Answer 3b: Corporate governance is something altogether different from the daily operational
management activities enacted by a company’s executives. It is a system of direction and control that
dictates how a board of directors governs and oversees a company.

Corporate governance is the interaction between various participants (Shareholder, Board of Director
and Company Management) in shaping corporation’s performance and the way it is proceeding towards.
Corporate governance deals with determining ways to take effective strategic decisions and developed
added value to the stakeholder.
Corporate governance ensures transparency which ensures strong and balance economic development.
This is also ensures that the interest of all shareholders (Majority as well as minority shareholder) are
safeguard.
Corporate governance affects the operational risk and, hence, sustainability of a corporation.

A Key Principle of Corporate Governance – Shareholder Primacy

Perhaps one of the most important principles of corporate governance is the recognition of
shareholders. The recognition is two-fold. First, there is the basic recognition of the importance
of shareholders to any company – people who buy the company’s stock fund its operations.
Equity is one of the major sources of funding for businesses. Second, from the basic recognition
of shareholder importance follows the principle of responsibility to shareholders.

The policy of allowing shareholders to elect a board of directors is critical. The board’s “prime
directive” is to be always seeking the best interests of shareholders. The board of directors hires
and oversees the executives who comprise the team that manages the day-to-day operations of
a company. This means that shareholders, effectively, have a direct say in how a company is run.

Transparency

Shareholder interest is a major part of corporate governance. Shareholders may reach out to the
members of the community who don’t necessarily hold an interest in the company but who can
nonetheless benefit from its goods or services.

Security

An increasingly important aspect of corporate governance is security. Shareholders and

customers/clients need to feel confident that their personal information is not being leaked or accessed
by unauthorized users. It’s equally important to ensure that the company’s proprietary processes and
trade secrets are secure. A data breach is not just very expensive. It also weakens public trust in the
company, which can have a drastically negative effect on its stock price. Losing investor trust means
losing access to capital that is necessary for corporate growth.

Corporate governance should encompass the following:

 The company’s performance and the performance of the board

 The relationship between the board and executive management

 The appointment and assessment of the board’s directors

 Board membership and responsibilities

 The “ethical tone” of the company, and how the company conducts itself

 Risk management, corporate compliance and internal controls

 Communication between the board and the C-suite

 Communication with the shareholders

 Financial reporting