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Tue 21 Aug 2012 12:42 PM

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Keep CSR in the family

Does the family origin of many GCC businesses mean CSR comes naturally?

Keep CSR in the family
The beach clean-up is the first CSR port of call for many companies
Keep CSR in the family
Stuart Matthews

Corporate Social Responsibility (CSR) has always struck me as an odd phrase. It's very existence somehow implies that, if left unfettered, corporations are naturally irresponsible.

As an idea, it entered the vernacular in the '80s - the decade that gave us the Bhopal, Exxon Valdez and Piper Alpha disasters. The far-reaching scale of these incidents left the public wondering who was in charge, asking questions and actively doubting what any CEO said.

In a gentle slide toward self-regulation, CSR grew into a way for companies to say "hey, we're okay". Some regulatory authorities responded by saying "prove it". For those affected, CSR reporting has since become as big a deal, and expense, as financial reporting. And, as BP and its contractors proved, the big industrial disaster is still not a thing of the past.

Today CSR is a chameleon-like concept that covers activity from coordinated international action plans to save the world, to the simple and direct team-building beach clean-up. It is a cloak that companies of all kinds put on to alter their appearance and boost a public image.

One factor that CSR programmes seem to have in common is employee involvement. In most cases a company's commitment boils down to giving up some of its employees' time on charitable activity outside work. Indications are that this helps to retain employees and build trust with the local community.

Trust is important. Edelman, a public relations company, runs an annual survey called the Trust Barometer. The 2012 edition identified what those surveyed thought were the drivers of irresponsible corporate behaviour. Topping the list with 29% was poor management, closely followed by unethical business practices at 28%.

The 2011 edition of the same survey asked people if they agreed with economist Milton Friedman's idea that “the social responsibility of business is to increase its profits.”

The UAE was the only GCC nation surveyed and topped the list, with more than 80% of respondents agreeing with the Friedman's premise. On the surface this doesn't speak well for the role of CSR in the region. But look closer. The UAE and other countries that make up the GCC are built on family businesses.

An army of family members have gone forth to build, trade and deal themselves into wealthy, multi-faceted businesses, handling everything from construction to cars. By boosting profits they have contributed to the diversification of the local economies, encouraged and invested in indigenous manufacturing and partnered with international brands.

All of this has significant benefits for the communities in which these companies work. Do they really need to do more? Perhaps not. The nature of the region is to have a large number of family businesses. For these companies, perhaps CSR is built into their 'corporate' DNA. It should, after all, be hard to be ruthless, faceless and irresponsible, when your founder's name is on the building and his portrait is in the lobby.

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Rajive Ahuja 8 years ago

Dear Stuart,
Your contention is akin to a householder opining that since he/she employs and pays a housemaid to cook, clean and serve, a laundryman to wash and iron their clothes, a gardener to tend to the plants, and is through all these employment situations supporting a disadvantaged class of workers, the person/family does not need to donate or contribute towards other important and pressing social causes. Yes, its free will, but there is a large segment of enlightened individuals who still go out of their way to do it voluntarily. I would like to extend this same thought to corporates as well. If you feel responsible for whats happening around you in your society you will but reach out and help. In the bargain, if you earn a good name, take it a s a bonus.
Your truly

Maha Al Olayan 8 years ago

Great post Stuart, just want to add couple more points..
Globally, CSR has been moving to the next level of engagement with all stakeholders. Regional business is also expected to move in the same track and they should consider all stakeholders (customer, employee, environment, supply chain, etc) while planning the business.