Corporate Social Responsibility: An old idea with a new name
A year ago, Time Warner Inc. released its first-ever “corporate social responsibility” report on how it addressed such critical issues as work force and supplier diversity, child protection online, content accessibility, consumer privacy, ethics and governance, employee growth and development, public policy, the environment, supply-chain management and philanthropy. Chairman and CEO Richard Parsons noted at the time that the report reflected Time Warner’s “commitment to being a world-class corporate citizen.” That meant, he explained, that “in addition to working hard to deliver attractive returns and exceptional value to our shareholders, we also strive to do our part to make the world a better place.”
At a time when corporations still struggle with the concept of corporate social responsibility and its implications for the way they do business, Time Warner’s report was groundbreaking. It followed by six years U.N. Secretary-General Kofi Annan’s Global Compact initiative, which encourages businesses to adopt sustainable and socially responsible policies and to report on them. By 2006, more than 3,300 companies from around the world had signed on to the Compact, pledging to implement its 10 principles.
According to the World Business Council for Sustainable Development, corporate social responsibility, or C.S.R., is the commitment by business organizations “to behave ethically and contribute to economic development while improving the quality of life of the work force and their families, as well as of the local community and society at large.” C.S.R. goes beyond charity, involvement in community projects, diversity initiatives and sponsorship of the annual dinner of, say, a minority professional organization. Rather, it adopts a holistic approach to business, taking into account the impact of a company’s policies and actions on all the stakeholders—investors, customers, employees, local communities and the environment—in the company’s arena of operations. With solid C.S.R. practices in place, companies become full partners of the communities in which they operate, rather than community poachers solely concerned with making profits and serving the needs of their shareholders.
The concept of corporate social re-sponsibility can be traced as far back as 1900, when Tuskegee University founder Booker T. Washington established the National Negro Business League with its “whole-community” approach to economic development.
Some 70 years later, Philadelphia civil rights leader Rev. Leon H. Sullivan drafted a set of principles to apply pressure to corporations to bring about social change in then-apartheid South Africa. Perhaps the first global code of responsible corporate behavior, the Sullivan Principles became the blueprint for ending that heinous system of racial separation. They are known today as the Global Sullivan Principles and are still used as a compass for corporate responsibility and accountability.
The Rev. Sullivan once recalled his position on South Africa. “Starting with the work place, I tightened the screws step by step and raised the bar step by step. Eventually, I got to the point where I said that companies must practice corporate civil disobedience against the laws and I threatened South Africa and said in two years [imprisoned freedom fighter Nelson] Mandela must be freed, apartheid must end and Blacks must vote or else I’ll bring every American company I can out of South Africa,” he said in an interview.
There is no single C.S.R. blueprint. Each corporation is too unique to demonstrate good corporate citizenship using a one-size-fits-all formula. The good news is, those that still struggle with the concept have a widening pool of examples for guidance.
The Sullivan Principles
The seven Sullivan Principles call for:
• Non-segregation of the races in all eating, comfort and work facilities.
• Equal and fair employment practices for all employees.
• Equal pay for all employees doing equal or comparable work for the same period of time.
• Initiation of and development of training programs that will prepare, in substantial numbers, Blacks and other nonwhites for supervisory, administrative, clerical and technical jobs.
• Increasing the number of Blacks and other nonwhites in management and supervisory positions.
• Improving the quality of life for Blacks and other nonwhites outside the work environment in such areas as housing, transportation, school, recreation and health facilities.
• Working to eliminate laws and customs that impede social, economic and political justice.