BusinessCorporate FinanceA policy as good as gold

A policy as good as gold

I’m a firm believer in delivering hard value from everything companies do – even the soft bits.

So, to me, developing a corporate social responsibility programme without an
investment case is like asking a business to suspend the normal rules of
engagement. Unfortunately, that is often exactly what happens.

CSR has a bad name in business with good reason; either it is a policy tool
for box-tickers or it lacks the basics for value creation – clear strategy,
robust parameters for investment and rigorous execution.

That should be a real frustration for senior management. CSR is a powerful
weapon for engagement which, in the right hands, can deliver significant upside
– growth in reputation and earnings, access to markets, shorter project
development cycles and lower operating costs to name a few.

For CEOs and CFOs, social responsibility initiatives should deliver a trust
dividend creating commercial opportunities at a time when there is a growing
trust deficit between ordinary people and corporations. But sadly most CSR
programmes don’t even get close, leading them to be dismissed as cost rather
than investment.

In this country, the public doesn’t trust companies or the institutions that
deliver public services. Only one in four believe companies tell the truth and
roughly the same proportion reckon companies are unfair to consumers.

Against that backdrop, many companies struggle to explain their relevance at
a community level, which can make trust brittle and constrain the operating
environment.

The road to enlightenment can be painful. There are many examples of
companies incurring huge and recurring costs because they have failed to read
issues or to engage effectively. The worst cases lead to heavy-handed political
intervention or loss of valuable assets.

But most companies would argue that effective social responsibility
programmes are worth their weight in gold, quite literally. So, before you write
off that expenditure or block that budget, think about the bottom line: goodness
might just be good for business.

Fraser Hardie is senior partner of corporate communications consultancy
Blue Rubicon

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