President: Will good intentions go crunch?
4 Aug 08
Glenn Allison wonders whether tough economic times pose a threat to corporate social responsibility programmes
by Glenn Allison
As many business sectors in the UK continue to find it tough going in the current market conditions, boardroom discussions will inevitably turn from long-term strategy to short-term management. That is only natural and in hard times perfectly understandable. As managing director of a house-building group, the sector in which my business operates has been particularly hard hit. It certainly focuses the management mind.
I have always believed that if you are building a sustainable business then you must plan for the long term. In the case of my business, we have had a strategic plan in place for many years which sets out our vision of the shape and scale of operations until 2020. Current events may slow progress against that plan but as part of any long-term plan, realism and the awareness that business does not always run smoothly should be built in, meaning that goals can still be achieved but time-frames may vary.
In times of economic challenge, businesses will adopt a sharper focus on their fundamentals. This focus usually means examining efficiency. As a result, direct and indirect costs are scrutinised very closely and recruitment is scaled back or frozen – all sensible measures to cope with uncertainty.
In my view, the current economic climate also provides the first major test of whether a commitment to corporate social responsibility (CSR) is here to stay.
CSR means different things to different businesses. It is viewed as an increasingly important area of activity for companies to develop and become involved in for different reasons – attracting and retaining staff, contributing to communities and projecting a positive public image of the business. However, a strong CSR programme requires dedicated financial and human resource.
It is natural for businesses to undertake a process of review when budgets are tight and often this process will be conducted on the basis of what is deemed to be “core” and “non-core”.
I suspect that a CSR programme may often be deemed to fall into the latter category. Of course, just because an area of activity is viewed as “non-core” does not necessarily mean that it is mothballed or scrapped but it would be naïve to assume that these activities would not be subject to greater scrutiny than “core” areas.
Business arguments notwithstanding, there is also the important issue of public perception to consider. Successful CSR programmes not only benefit society, but are recognised as doing so. That is a positive step for the image of corporate behaviour
and an intangible benefit for the companies that promote most effectively their activity. It can play a big part in building trust between business, society and government.
The difficulty for companies in tough economic times is deciding how important that is when the focus is inevitably on the bottom line and keeping people in jobs.
This is a big challenge for us all. As professionals with strong backgrounds in interpreting what the figures tell us, we usually make sound, evidence-based decisions. However, as business behaviour grows in importance, we are into new territory. These are the most challenging economic times since CSR became a major issue – it will be interesting to see if it can remain so.