Here is my blog on the problems with social value and social impact.
Can ‘corporate diplomacy’ ever deliver an enduring social licence to operate? See my review of Witold Henisz’ book on corporate diplomacy here. The review looks at the limitations of the business case for delivering true accountability.
As the teams battle it out in Brazil, what has happened to the stories of corruption surrounding FIFA?
It is surprisingly difficult to find material related to the recent corruption allegations involving FIFA on FIFA’s own website. You would have thought that there would be something about their internal inquiry into the matter of Qatar’s selection. But you would be wrong.
Yet FIFA is going to have to take the issues seriously, as FIFA derives a lot of income from sponsors – and they are now distancing themselves from FIFA.
Interestingly, FIFA are currently advertising for a CSR Programme Manager – however the focus of the job is to be equality and anti-discrimination. Of course these are both crucial issues in the world of football. But so is corruption.
What happens when things go wrong? Here is my review of ‘The Dark Side’ – a collection of case studies of poor performance, mistakes and tragedies.
Worries over the role of the moneylenders (that’s excluding the banks, whom some think don’t deserve that name any more) is growing.
Wonga is but one of the many lenders to those who cannot really afford to borrow. But it’s catchy name means it will receive more adverse attention than most. Yet CSR strikes even here: in an effort at PR, Wonga has launched openwonga.com a website that details how it all works and why it is not such a bad thing. This points out that they have made 7 million loans over the last 6 years and that (only?) 1.2% of those were extended three times. But it is not clear what happens after a loan has been extended 3 times: while that is the maximum number of extensions Wonga allows, can you take out another loan on top? And 1.2% of 7 million is 84,000. It’s a shame there is no analysis of those loans. Or the number that have been tipped into bankruptcy as a result.
But that is all for the UK, yet Wonga also operates in South Africa, Canada and Poland. The national websites for those operations do not have similar statistics pages. However, under the title of ‘Responsible Lending’ they do helpfully point out that ‘Wonga is not the cheapest way to borrow money.’
Part of the solution is to promote credit unions, a form of social enterprise that may charge high rates of interest, but not the hundreds of percent that the likes of Wonga charge. So perhaps the main part of the solution is simply to limit the interest rates that can be charged.
People’s needs should be given priority over the needs of the market.
The issue of taxes not being paid has received the most attention. That led to Starbucks volunteering an extra £20m over two years. But that may be it. So pointing out that a company could give more money to the state, or that it could choose to train more local people or could limit access to nasty pornography sites will probably have limited success. Does that make it pointless?
The natural response to such efforts at moralising is that it is indeed a waste of time: the law has to change. On this view, the law and the business case are the only things companies recognise. Yet capitalism also has a moral foundation, as Adam Smith recognised. Companies don’t always do anything they can get away with.
Maybe in the long term moralising can help to change the climate of opinion within which companies operate, creating reputational hazards if nothing else. But it is only in the long term. For tax, training and ISPs it would probably be far more effective to regulate for the solution – but that is more work for the government. And interestingly that work would mainly be in persuading other parties that changing their behaviour would be the right thing to do.
Maybe there’s no escape from moralising after all.
After the disastrous factory fires in Pakistan last year, a general review of the effectiveness of CSR approaches to supply chain and workers’ issues was needed. A new report by the US union body, AFL-CIO, shows how poorly current supply chain auditing is serving workers. The report is particularly critical of SA8000 and the Fair Labor Association, both of which are the mainstay of international brands trying to improve the treatment of workers by their suppliers.
So how should companies react? This is a wake up call – the companies that use supply chain auditing standards should ensure that the standards bodies honestly review their effectiveness, as the ETI courageously did some years ago. The results are unlikely to be comforting and may well lead to a modest rise in prices of the goods involved.
But the report also makes the point that both governments and unions need to be properly involved. The solution to a major social problem is unlikely to be the result of just one social actor – the companies – doing their own thing.
What does stakeholder engagement done well look like? What are the pitfalls? And how should you go about conducting stakeholder engagement well?
If I were an employee of Barclays, I would be very concerned right now. What if I don’t feel like abandoning my own ethics and adopting someone else’s? Apparently Barclays’ CEO has said that all employees must adopt a new code of ethics or go.
But suppose that I don’t mind changing my core values as a person in order to remain employed. What am I being asked to do? One of the ‘behaviours’ within the new code is: ‘Value sustainable progress as much as immediate achievements.’ Does this have anything to do with sustainability or not? It’s hard to tell.
And I might also be concerned that the recent scandals to hit the bank have mostly been about how Barclays treats its customers. So should I worry that Barclays’ old Quaker values included one about ‘fair dealing’, but the new ones do not?
I am reminded of Groucho Marx’s attempt at CSR: ‘These are my values. And if you don’t like them…well, I have others.’