With all the buzz on corporate social responsibility, or corporate citizenship, it’s easy to lose track of the real world examples of companies engaging in responsible business practices in their everyday activities. Even as companies pledge their adherence to such principles by signing agreements such as the United Nations Global Compact (UNCG), good corporate citizenship extends beyond statements and declarations. It requires firms to make their commitment to social responsibility an integral part of corporate strategy.

This Economic Reform Feature Service article shows how six firms of different sizes and from different sectors use one tool, the SA8000 global social accountability standard for decent working conditions, in applying corporate citizenship principles to their everyday practices. Read the rest of this entry »

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On November 11, in Lahore, Pakistan, CIPE, the Responsible Business Initiative (RBI), and the Association of Certified Chartered Accountants (ACCA) launched a new tool to encourage greater transparency, accountability and integrity in Pakistan’s companies – the Responsible Business Guide: A Toolkit for Winning Companies. The Guide is a new element in CIPE’s emerging focus on corporate citizenship, which represents a move from philanthropy and corporate social responsibility – often viewed as “giving back” to the community – to a deeper understanding of the commitment of companies to society. Read the rest of this entry »

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CIPE is founded in the belief that business plays a key role in shaping democracy and making it work. The notion that business has a stake in democracy is still not commonly accepted globally. As we we continue celebrating International Democracy Day, it is useful to reflect on the role of the private sector in making democracy work through concrete examples. We spoke to Olajobi Makinwa, Head of Anti-Corruption and Transparency Initiatives at the UN Global Compact, to see how their member companies from around the world see their role in this regard.

From your perspective and from the perspective of your member companies, how does ethical and responsible behavior by business contribute to stronger democracies and democratic stability more broadly?

Responsible and ethical business practices introduce a greater degree of transparency and stakeholder engagement. By doing so business helps to grow and strengthen all forms of participatory engagement, including better and wider access to information that affects people. It can also enhance the living conditions of ordinary people, which can give people a stake in democracy and the means for participation. At the workplace, ethical business practices set high standards for treating people and communities well.   Read the rest of this entry »

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Last week the United Nations Global Compact (UNGC) Leaders Summit convened in New York, gathering more than 1,200 corporate executives, government officials and civil society leaders. The UNGC is an initiative that gathers businesses committed to the ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption. Launched ten years ago, it grew from just a handful of participants to about 8,000 today, with an ambitious goal to reach 20,000 participants by 2020.

As the UNGC grows, however, it is crucial that new participants go beyond just signing their name on a dotted line, that they move from ideas and statements to action. Practical examples of successful implementation of the UNGC principles are of key importance here. CIPE, in cooperation with the UNGC and the Social Accountability International (SAI), set out to highlight such examples in a joint publication From Principles to Practice: The Role of SA8000 in Implementing the UN Global Compact. Read the rest of this entry »

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In April the UK parliament passed the UK Bribery Act, which significantly enhances the penalties for giving and receiving bribes and extends the reach of the UK government in pursuing allegations of corruption that occur abroad.  The action in the UK coupled with the U.S. government significantly increasing its investigations in to violations of the Foreign Corrupt Practices Act has many businesses reexamining their internal controls and redoubling efforts in compliance.

Ethics and morals are things that are typically associated with an individual’s cultural background, so are ethics an issue when doing business across cultures, or is there some basic underlying ethical principles that we all follow?  Recently we had the opportunity to sit down and talk with one of the world’s preeminent scholars of business ethics, Dr. Norman Bowie.  You can find the interview here in our latest Economic Reform Feature Service article.

Article at a glance

• Business ethics is a relatively new field of study, which grew out of the general field of philosophy in the 1970s.
• Broad-based ethical standards like transparency and personal respect apply regardless of company size or sector.
• Cultural norms differ, but there are some universal ethical principles – like the illegality of bribery – that are widely accepted across cultures.

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“I don’t like to think inside the box, I like to create my own box.”
- C.K. Prahalad, R.I.P. 1941-2010

Some people preach to the choir; others write new choir songs. C.K. Prahalad, the management guru often named the world’s top business thinker passed away last Friday night at the age of 68. Prahalad became famous for championing a powerful new standard, a new choir song for the world to sing. His was the driving force behind the conceptual framework for doing business at the Bottom of the Pyramid.

Prahalad, advisor or director to many of the world’s top companies, also became famous as a professor at the University of Michigan’s Ross Business School. In classes on strategy, management and innovation, Prahalad used philosophy and ethics as a subject matter to challenge MBA students to examine their own ways of thinking and perceiving the world. He taught that it was self-awareness, personally and organizationally, that empowered business to look beyond the balance sheet to see just how much it could impact society, for better or worse. Read the rest of this entry »

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We often hear that corporate social responsibility, or corporate citizenship as it is often called in the business community, is more than philanthropy.  Its easy to agree with this statement.  But what does this “more than philanthropy” mean?  What is good corporate citizenship beyond financial contributions to a legitimate cause?

A new paper by Transparency International argues that fighting corruption is good corporate citizenship.  One of the issues highlighted in the paper is that in move towards non-financial reporting on companies’ activities, reporting on anti-corruption strategies is often lacking.

In 2007, TI commissioned a survey to probe company reporting on practices to combat bribery and corruption. The study, Transparency in Reporting on Anti-Corruption – A Report of Corporate Practices (TRAC) assessed the extent to which close to 500 leading companies have reported the strategies, policies and management systems they had in place for fighting bribery and corruption. In spite of some exemplary practices, only seven of the 486 companies reviewed achieved the top score while 151 received the lowest.

Overall, the paper is a good summary of the evolving field of social responsibility, various developments in the anti-corruption field, and how an aggressive stance against corruption by companies can be part of good corporate citizenship.

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Yesterday as I was browsing through BCLC’s global issues web portal on water, I couldn’t help but think about what else corporations might be leaving behind when they’re done a water access project. On the day after a water project is completed, there just might be more that has changed besides greater access to drinkable water. It’s possible that corporations are not just leaving behind tangible projects, but also intangible processes. Read the rest of this entry »

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The Borse Dubai (foreground)

The Hawkamah Institute for Corporate Governance, Standard & Poor’s, and the Credit Rating and Information Services of India Ltd recently launched its Environment, Social and Governance (ESG) index initiative, the first of its kind in the Middle East & North Africa region. The International Finance Corporation (IFC) is helping develop the index, which aims to encourage responsible and sustainable investment practices by measuring the environmental, social and corporate governance performance of hundreds of listed companies in the region. It aims to help about 600 listed companies in 11 countries to better understand environmentally and socially responsible investment practices, and the importance of implementing sound corporate governance.

The index will cover the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, Jordan, Egypt, Morocco, and Tunisia. The project also intends to strengthen and promote environmentally-sustainable and socially-responsible businesses, which will create greater awareness and adoption of ESG practices by companies as well as increase available financing options. Hawkamah noted that financial performance indicators have traditionally marked investment decisions, while the index aims to provide the market and investors with a tool focusing on non-financial indicators that are fundamental in assessing the sustainability of a company’s future performance. The IFC added that the absences of credible and standardized data about business practices relating to social and environmental concerns is a key barrier limiting the flow of socially-responsible investing funds to the region.

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In Pakistan, with the exception of multinational companies or a handful of local visionary entrepreneurs, many companies are still trying to understand corporate citizenship, and how it can benefit the society at large by leveraging their competitiveness. There generally is lack of understanding and a misleading perception that corporate social responsibility (CSR) is interchangeable with charitable giving or compliance with externally imposed buyer-codes, rather than an embodiment of Islam’s mandatory focus on equity and social responsibility.

To illustrate, Pakistan’s growing tradition of corporate philanthropy tends to co-exist with irresponsible behaviour manifested in an aversion to accountability, lack of governance mechanisms, tax avoidance, labour exploitation, poor product integrity, wasteful processes and disregard for the environment. Read the rest of this entry »

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Corporate citizenship, or corporate social responsibility (CSR), is a global concept increasingly adopted by companies around the world. At the same time, good corporate citizenship becomes truly meaningful only at the local level where a company’s commitment to CSR principles translates into concrete actions that affect local communities.

In this Feature Service article, CIPE interviews Sanjeev Jain and Ari Sarker from General Electric. They speak about GE’s corporate social responsibility initiatives in India and emphasize that multinational corporations, just like any company, have an inherent interest and responsibility in engaging with the communities in which they work.

Article at a Glance

• Being a good corporate citizen is not just about lawful and transparent operations. It is also about innovation to best utilize local assets to create new products, services, and markets.

• A company, even a large one, cannot address all local problems. It is much more effective to choose a specific area of focus for corporate social responsibility (CSR) programs and excel at it.

• Companies should always be responsive to local needs and engage local stakeholders to maximize the effectiveness of their CSR initiatives.

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Human beings derive a sense of self-worth from being able to contribute to a cause that is larger than them. It gives them a chance to widen what David Hume called the concentric circles of our empathy – to care for more than themselves or their loved ones – thus, enabling them to keep the interests of other human beings at heart. At a time of war, perceptions are often distorted. There is little to anchor a young, impressionable person to their values and there is a great deal of insecurity about the future. As a consequence, the youth of the nation tend to indulge a degree of fatalism. Sri Lanka‟s social dynamics and lack of institutions only seem to perpetuate this fatalism.

These words come from Piyumi Erandima Kapugeekiyana’s first place winning essay for the category of “Citizenship in a Democratic Society,” in CIPE’s 2009 International Youth Essay Contest. Piyumi writes as a Sri Lankan born in Abu-Dhabi, now studying in Malaysia, her parents having left the war-torn country in search of opportunity abroad. She writes as an active expatriate community member, keeping tabs on the 26-year old civil war between the Sinhalese unitary government and Tamil ethnic minority. She writes, in her words, “in the hope that writing about identity, citizenship and democracy would bring me closer to decoding some aspects of that world.”

Joining Piyumi at the virtual winners’ circle for “Citizenship in a Democratic Society,” are second place winner Rahel Weldeab of Eritrea, and third place winner Asamoah Prince of Ghana. Tatenda Chiware of Zimbabwe also received an honorable mention in the category. Their essays were among the 860 overall entries from 106 countries in the 2009 contest, almost double the entries as the first time around. Tomorrow and wednesday, the CIPE Blog will feature the winners in the two other categories, “Enterpreneurship and Leadership,” and “Educational Reform and Employment.” Visit www.cipe.org/essay to view all winners, read their biographies, and download their winning essays as originally submitted.

The growth in number and quality of entrees testifies to the energy and interest of young people around the world in thinking about reform issues, and many ideas especially from winning essays in both competitions thus far were incorporated into CIPE’s recently published issue paper on engaging youth in policy reform. The paper, as are many of the essays, is as much challenge to youth themselves as to elected leaders, as Asamoah Prince concludes in his essay:

For us to achieve the dream country that all Ghanaians hope to live, we the youth must sacrifice and work hard towards its reality and this can be accomplished only when we equip ourselves with the requisite knowledge and an understanding of our roles as responsible citizens. As a result, politicians and people in authority would be put under constant pressure, holding them accountable for every decision and action. In so doing we would also put our actions, minds and voice into good use for the collective benefit of Ghana.

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At a project cost of less than $20 per student (including administrative overhead), the Tashabos program reached 9,500 students throughout 24 high schools in 2008. In 2009 the program is slated to reach over 22,000 more students in 44 high schools in Kabul and neighboring provinces. A majority of these students are female.

Oftentimes the Tashabos textbooks are the only ones that Afghan students can keep for themselves—although they certainly don’t keep the knowledge and skills they’ve acquired to themselves. Students return home to help family businesses or start new ones, putting their classroom experience immediately to use in the real world, again and again.

Tashabos exemplifies CIPE’s model of putting skills and tools at the hands of people in developing and conflict-ridden countries, helping to unleash their own ideas and solutions to development and reconstruction. And, as you can tell by the feature story below from Britain’s Sky News daily newscasts, women and girls are not backing down despite the unique obstacles they face.

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In June, Transparency International launched the 2009 edition of the Global Corruption Barometer. The Barometer explores the general public’s views of corruption and experiences of bribery around the world and for the first time this year inquires about the level of state capture and people’s willingness to pay a premium for clean corporate behavior.

One of the main findings is that corruption in and by the private sector is of growing concern to the general public. Notably, the respondents are critical of the private sector’s role in their countries’ policymaking processes: more than half of them thought that bribery was often used to shape policies and regulations in particular companies’ favor. This finding emphasizes the need for better ethics rules, both on the part of the private sector and policymakers. It also emphasizes the need for businesses and decision-makers around the world to learn and practice open and transparent advocacy rather than backroom deals.

At the same time, another interesting survey finding shows that corruption matters quite a bit to consumers. Half of those surveyed expressed a willingness to pay a premium to buy from a company that is not corrupt. That is certainly an encouraging indicator – one highlighting the value of voluntary anti-corruption initiatives among businesses and good corporate citizenship.

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The complexities of operating in a global economy create challenges for companies striving to operate in a socially responsible way, especially in developing countries. Many have found that if the notion of corporate citizenship remains limited to philanthropy, companies fail to take full advantage of their core competencies. In contrast, emphasizing key business expertise to engage more effectively with local communities can provide unique opportunities to make a difference at a grassroots level.

In this Feature Service article, CIPE interviews Laurel Vogelsang, associate director for corporate responsibility at Eli Lilly and Company on how the principles of good corporate citizenship can be an integral part of a successful business strategy. Lilly is the world’s 10th-largest pharmaceutical producer and Vogelsang emphasizes that striving to be a good corporate citizen benefits the company as well as the end recipients of assistance.

She says, “The benefits to Lilly include the improvement of the business environment by emphasizing the interdependence between business and society and demonstrating this connection via patient-based programs. (…) Companies operating in developing markets should try to find opportunities to engage with local communities and to have a holistic approach to global development needs.”

Article at a Glance

• Corporate social responsibility, or corporate citizenship, is a constantly evolving concept.

• Good corporate citizenship utilizes a company’s core competencies to benefit the community as much as to sustain the corporation.

• Relationships built on shared goals, not just philanthropy, contribute to community sustainability and corporate profitability.

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