Corporate Social Responsibility (CSR) is about integrating environmental and social affairs with corporate strategies and business operations in the communities or sectors in which organisations operate – a sort of ethical ‘pay to play’.
Many abused the term and even more believe that by having, pretty much, a ‘charitable’ department, nothing else matters. Well, it does. Today’s ‘licence to operate’ is no longer dependant on the CSR actions / policies but on the quality of the governance of the organisation.
Public Relations – and its numerous sub-functions – has a considerable role to play in ensuring an organisation’s good governance is not superseded, let alone replaced by, CSR.
How a business is run, how business results are reported, how the organisation is managed at its executive and leadership level and how robust the systems that underpin its activity are designed and embedded form part of a good corporate governance (CG).
In the Oxford Handbook of Corporate Responsibility, Ann Buchholtz PhD argues that:
Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.
Companies that practise good corporate governance are generally those that are socially and environmentally responsive. ‘Since effective corporate governance means that internal democracy and external responsibility go hand in hand, all the stakeholders have a duty towards the company to persuade the management to follow ethical and social norms of doing business.’ – Prachi Juneja, Management Study Guide.
‘CG’, according to an article published in Procedia – Social and Behavioural Sciences (Volume 143, 14 August 2014, Pages 1055-1057), ‘has been acclaimed as an instigator of tight internal control mechanisms. Under CG mechanism, firms are not encouraged only to promote ethics, fairness, transparency, and accountability in all their dealings, but to continue generating profits while maintaining the highest standards of governance internally as well.’
Public Relations is directly concerned with both CSR and CG; if an organisation is run chaotically, with little to no consideration to ethics, shareholder interest and stakeholder concerns, it cannot claim (let alone demonstrate) that it is socially responsible and adequately managed.
An inappropriate or insufficient corporate governance presents phenomenal risks to an organisation’s image, reputation, perception and brand. Good governance translates in good social responsibility, not the other way around.
I could not agree more with Dr Anne Gregory who, in her #FuturePRoof chapter entitled ‘Communicating with conscience; influencing organisational leaders to do the right thing said:
CSR is not enough … in fact, I would like to see the phrase banned from the corporate and public relations lexicon; it is massively devalued. What we are talking about here is Governance and a new perspective on organisations with communication as the lens’.
Many say that we, in Public Relations, build and protect reputations – a good corporate governance is the foundation on which we build that reputation.