Wednesday, 30 July 2014

SHOULD BUSINESSES GO BEYOND JUST DOING GOOD TO ACTING RESPONSIBLY? (PART 2) -Pocket Finance Business

"We need a new way of doing business to get out of the present crisis ... Absolute greed has come close to bankrupting the world. Thanks to the crisis that certain businesses have dumped on everyone a lot of people are going to suffer on a global scale. All of us must learn. It is all the more important that those business leaders that are left standing try to be a force for good."
                                                                                                          
                                                                                                             Richard Branson



I can imagine that you have all been looking forward to Part 2, hopefully it will not get into Part 3, because it is really an interesting and vast topic to discuss.

So, why do we need to incorporate CSR into the business or to use big grammar, STRUCTURALIZE (Hope Webster’s and Oxford Dictionary will not come after me for this new word). Can’t a business just execute worthy initiatives/programmes/activities internally and externally, create media attention and that’s okay for the business. The business will save cost and even time since it’s less formalized. However, for it to be CSR, true and actual CSR there has to have been research carried out justifying the purpose of such an initiative, and also monitoring and evaluation of the initiatives/programmes/activities whether internal or external. With all of these processes, an informal approach will be out of order. So then it will have to start at the Top from the “Oga’s at the Top”.

At the Board and Executive level of decision making CSR has to be integrated. It is at this level, the structure should be deliberated upon and decided. Also, a budget should be set for CSR spend yearly. Then a policy should be put in place which will contain the Businesses CSR strategy, Focus areas, Staff Strength, Guidelines for initiatives/programmes/activities to embark upon, research procedures, monitoring and evaluation procedures.

CSR is not just about donating items or just sponsoring events or activities, the guidelines will help ensure that the initiatives/programmes/activities will have either short-term or long-term benefits to the brand. Certain questions that can be asked before execution are:

  • What is the ROI of this initiative/programme/activity for the Business? I.e. The ROI doesn’t have to be monetary.
  • Is it a sustainable initiative/programme/activity or is it a one-off that will generate positive feedback for the company
  • Who are the beneficiaries of this initiative/programme/activity?
  • Does this initiative/programme/activity fit into our CSR focus areas?

The list is endless as more questions can be developed internally by the CSR Executives once the structure has been set-up.

Businesses currently have a CSR structure which incorporates its ESG – Environmental, Social and Governance policy. These three factors are embedded in businesses to collaborate for efficiency and effectiveness of the CSR initiatives/programmes/activities. Some of the areas under each factor within the policy are as follows:

  • Environmental – Resource Management, Reduced Emissions and Environmental Reporting.
  • Social – Health & Safety, Labor Management Relations, Human Rights, Community Relations and Responsible lending
  • Governance – Executive Compensation, Board Accountability and Shareholder Rights

In Conclusion, I am sure that we are all beginning to get a feel that CSR should be well structured to yield maximum output for the business and its stakeholders.
Despite touching on the benefits in subtle ways in Part 1 and Part 2, in Part 3 we will focus in more detail on the benefits of CSR to businesses.
                                                                                                                         ...to be continued


About the writer: Oluwadamilola Famakinwa is an Entrepreneur who strongly believes in Cross-sector partnerships i.e partnerships across the private, public and third sector towards solving social issues. He is passionate about the Education in the Public Sector and its impact on the wider community. He is in an intimate love relationship with Jesus and that is his main secret to everything in his Life.


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