Whatever Happened to CSR?

By Tom Lloyd

Visiting Fellow to Northampton Business School

 

Since the dawn of the corporate social responsibility (CSR) era in the 1990s, heralded by my book, The ‘nice’ company, (Bloomsbury, 1990), a wedge has been progressively driven between companies and societies. The original idea was that companies are members of the societies and communities they operate in, have a clear interest in the well-being of those communities, and thus close, mutually-supportive relationships between corporate and human citizens will be of benefit to both. But CSR, as it is today, is a parody of the original idea. De-nuded of social content by the poisoned chalice of a TLA (three letter acronym) CSR has been incorporated into the normal calculus of business; an item on a balanced score-card; a paragraph in the annual report; a box to be ticked. The originally envisaged day-to-day connections between companies and communities are conspicuous by their absence. Today, CSR budgets are voluntary taxes, paid (or quickly cut, when times are hard) with little more thought for their beneficiaries than is given to any other tax.

Company leaders sit in the driver’s seat, gripping the wheel. When it’s hot, they reach for the air-con; when it’s cold, they turn on the heater; when it gets dark, they switch on the lights; when it starts to rain, they turn on the wind-screen wipers. The dashboard is the balanced score-card. If the instruments read normal and no warning lights are flashing, managers keep their eyes on the road, and follow the satnav (or should it be ‘stratnav’?) instructions. The company is separate from its environment; a capsule travelling through time on paved roads, towards a pre-determined destination.

If something resembling the original idea of CSR is to be achieved managers will have to stop, get out of their capsules and continue their journeys on foot; walking through the countryside; gazing at the view; stopping from time, to time to look at a flower; leaving the path to examine a ruin; listening to birds, insects, and a dog fox barking in the distance; chatting to fellow walkers. They will still have some sense of direction, but it will be provisional and subject to revision if circumstances change, or unexpected threats or opportunities arise. Their routes will meander, guided by the terrain, the weather and circumstance. The walk itself will be the real objective. They will not simply be passing through. They will be parts of the countryside. They will feel it, see it, smell it.

This is not, as some may suggest, a recipe for bloated CSR budgets and for managers distracted from the main business of shareholder value creation by peripheral or extraneous concerns. In a business world characterised by the ‘VUCA’ qualities (volatile, uncertain, complex, ambiguous), insensitivity to your environment, and a lack of concern for the consequences of your actions are liabilities.

A sensitive, responsive CSR programme can contribute substantially to shareholder value creation by making an organisation more alert and more adaptable. By ignoring, or by paying insufficient regard to the VUCA qualities, capsule-management can lead an organisation into serious trouble.


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