Corporate Social Responsibility – more harm than good
The current period of financial turmoil has – as on previous occasions – led to considerable speculation and projection by nervous enterprise leaders, confused politicians and interested advocates as to the correct conduct and purpose of business.
The last time this occurred was in response to the economic downturn of the early 1990s. This led, at the time, to the articulation of a presumed need for greater corporate social responsibility – or CSR – as articulated in the 1995 RSA Inquiry, ‘Tomorrow’s Company: the role of business in a changing world’.
Notably though, many of the original sponsors and supporters of that endeavour – many of whom appeared to endorse what was to become the New Labour agenda of demanding more targets and procedural audits, as well as greater dialogue and inclusion – are no longer around.
Among those whose executives pontificated over the deeper insights and wisdom they had into what made for, and sustained, a better, more responsible company, was Barings Venture Partners Limited. They were not alone in the ranks of those who were good at talking the CSR talk, but less so at walking the CSR walk.
But maybe that is because being a good, responsible company that cares about people and the planet, as well a profits, was not what CSR was really about in the first place. The programme director of the RSA Inquiry wrote a piece about it, published before the final report, that identified one key area to be explored by it as being; ‘the notion of business as the most important agent of social change, in an age when governments are redefining and limiting their own sphere of influence’.
In other words, as state leaders the world over became confused – in the immediate aftermath of the Cold War – as to their purpose and direction, so some – encouraged no doubt by a few disillusioned CEOs – sought to invest business with the role of social leadership instead.
That remains a key focus for CSR today. What is different from its original conceptualisation, however – and in some ways more sinister – is that whereas in 1995 it was the complexities of the globalised, international environment that business operated within that was held to have heralded the need for them to change, today it is people themselves that are presented as both the source and the locus of change.
‘[H]umans are complex social animals’, rails Matthew Taylor, the current incumbent at the helm of the RSA. Influenced by the new, fashionable orthodoxies of behavioural economics, evolutionary psychology, neuroscience and the need to nudge, he describes people as ‘instinctive and imitative’, before – in a recent talk on what he describes as ‘Enlightened Enterprise’ – identifying his aim to change the public into ‘more capable and responsible citizens’.
The role of business to cover for the limitations of the state is still there in his exposition, but now CSR is not so much about altering business practice as our own purportedly feckless and foolish consumer habits.
So, Taylor laments, ‘the state has many competing objectives and when it uses its power to nudge it opens itself up to charges of paternalism and social engineering’. That is why, he suggests, there is a new opportunity for business ‘to build on a relationship based on choice and consent, and in some cases a good degree of trust’.
In other words, the purpose of CSR today is to act on behalf of governments that can’t be trusted and for people who don’t know what’s good for them.
This low view of government and people was always implicit to CSR, which usually focused its supposed benefits elsewhere – typically on people without a voice (ideally in Africa) – or better still the dumb (animals), or the inert (the environment). That way, businesses could patronise impoverished communities, eco-activists and their media groupies with token sums and gestures – that were rarely held to account or scrutiny – and at the same time encourage their staff to subsidise these schemes by volunteering their own time and energies.
And by arguing that there had to be a purpose to business beyond simply making a profit, the prophets of CSR slyly assumed that which had yet to be achieved – realising sufficient surplus to ensure employees were adequately rewarded in the first place. Staff who collectively, consciously and loudly fought for better wages were ignored. So British Airways could be commended for its social and environmental reports whilst consistently facing-down its own workers through a series of strikes.
But what gives business the legitimacy and authority to act on behalf of the people – and now, more ominously, literally on them – is never clarified. And, in the process, the notion that choice, consent and trust, are qualities we should expect – if not demand – from government, is also missed. In fact, Taylor complicates matters still further as, presumably unable to even trust businesses to pursue his ideals, he proposes that NGOs – those bastions of democratic representativeness and accountability – should act as ‘quasi-regulators’ of the entire process.
CSR was, from its inception, preoccupied by what it perceived to be the unnecessarily ‘adversarial culture’ of business. Today it is ‘our national culture’ that its advocates seek to correct. These are caricatured as being eating too much, drinking too much and exercising too little, as well as wasting resources and ruining the planet.
CSR was never about doing good. It was always a mechanism that a confused ruling class used to maintain its legitimacy and control in a disillusioned age. Today, combined with the sinister new orthodoxy of nudge, it is more backward still. A directionless state has shifted its focus from matters of public consequence to tinkering with our private lives but, lacking the confidence even to do that it now seeks to outsource this function to private enterprises where, no doubt, there are plenty of willing prefects to do its bidding.
If we want to do good for other people, the planet, or whatever else we choose, it is high time we refocused our attention on asserting what really matters to us and getting the right government, rather than businesses, to do this.
Throughout October and November, The Independent Online is partnering with the Institute of Ideas’ Battle of Ideas festival to present a series of guest blogs from festival speakers on the key questions of our time.
Dr Bill Durodié is Associate Fellow of the International Security Programme, Chatham House, and a former senior lecturer of Nanyang Technological University, Singapore. He is speaking at the Battle of Ideas session Profiting responsibly? Business in the big society, in partnership with SAB Miller and PWC and in association with the Institute of Ideas’ Economy Forum and City A.M., which is taking place on Saturday 29 October.Tagged in: Corporate Social Responsibility, finance, opinion
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