The ‘New-Normal’ regarding Social Responsibility

By Kosie Lombard, OIM International, Director and Principal Consultant

One cannot meaningfully discuss the challenges of Social Responsibility (especially Corporate Social Responsibility (CSR)) in a post Covid-19 scenario, unless you also consider the global & national political, economic &social environment in which it has to be implemented in. Although still vitally important, in the ‘New-Normal’, describing social responsibility as the mere obligation of an organisation towards the interests & welfare of the community & society by assisting through educational programs, the building of houses, providing or supporting clinics & health care and/or sport facilities might no longer suffice.

Let us then firstly consider which politico-economic system might be best able to lead a country to the top of the “peace & prosperity tightrope” & its citizens to a “Better Life” for themselves & their families.

Alternative Political, Economic & Social Systems: Are we going to see yet another “dogmatism” sweeping the world post Covid-19? After all, we have seen &/or experienced some form of Capitalism, some form of Socialism or Communism. All of them, which in their original form, failed to create & sustain broadly-based prosperity & social justice for all.

But why did they fail?

• Unbridled Capitalism failed because of uncontrolled greed where the result was prosperity for the few; exploitation & poverty for the many.
• Communism failed because a “new class” was formed comprising of party leaders, the nomenclature, leaders of the military, the professions, etc. & this new class was rich & prosperous with a luxurious life-style at the expense of the masses – “some animals are more equal than others”.
• Socialism where the motto was: “take from the rich & give to the poor” or so-called “levelling” failed because in a wealthy country they could, to an extent, survive the redistribution of previously generated wealth, but in poor countries, like in the third world, where there was no wealth to distribute, it ended in perpetuating poverty.

Whatever the world leaders, governments & businesses call the new politico-economic system; it must certainly have the capacity to firstly generate broadly-based prosperity & then find corrupt-free ways of fairly distributing the wealth created.  After all – you can only share a cake if you have baked it first!

Prof. Robert Tusenius, the founder of OIM International, over years warned that the increasing or widening prosperity gap between the very wealthy & the very poor (What does the ‘New-Normal’ require from leaders across all spectrums?). For many years, Prof. Tusenius proposed an economic-political-social system which he called “Market driven private enterprise with social justice & broadly-based prosperity” (see diagram above) which can provide a framework to address some of these imbalances.

There is no better opportunity than now, at both international & national level, to lay the foundations for a more sustainable, fair & resilient future. A new social compact or accord is required between government, business, labour, the academic fraternity, professional bodies, churches, the NGO’s & the media that centers on human dignity, social justice & the preserving of our planet; where social progress & development keep pace with economic development. We might refer to such a social compact as a National Prosperity Partnership®.

It’s time for a Great Reset: During a virtual meeting held on 3 June in Geneva, by the World Economic Forum (WEF) about a unique summit to be convened in January 2021 called the “The Great Reset”, Klaus Schwab (Founder & Executive Chairman of the WEF) made critical statements reflecting on the way forward for the world post Covid 19 & I would like to highlight some of them in support of Prof. Tusenius’s thinking: “We have to decarbonize the economy in the short window still remaining & bring our thinking & behaviour once more into harmony with nature. A Great Reset is necessary to build a new social contract that honours the dignity of every human being. We need a change of mindset, moving from short-term to long-term thinking, moving from shareholder capitalism to stakeholder responsibility. Environmental, social & good governance have to be a measured part of corporate & governmental accountability”.  The planned summit will also engage thousands of the younger generation(s) to ensure a strong forward-looking orientation – a critical component when also looking at Corporate Social responsibility.

Even prior to the lockdown, SA was already seriously grappling with three terrible socio-economic challenges namely Unemployment, Poverty & Inequality. The lockdown has not only glaring highlighted (again) these plights, but if anything, has exacerbated them beyond belief, as sadly pointed out in previous articles by my colleagues Chris Jacobs and Kobus Grobler. To avoid the disastrous consequences of these challenges, they need to be addressed immediately & creatively by all role-players. Business has a fundamental role & responsibility in this regard.

Although the major objective of any business enterprise is still to make money, focusing solely on profitability &its ability to grow has for quite some time not been enough. Corporate Social Responsibility (CSR) & the image a company portrays in the eyes of the various stakeholders from the shareholders, employees, customers or clients, suppliers, community and even government, has become vital for its long-term survival & it will be increasingly so in the new normal.  This highlights the critical need to set up and develop what we might call a Business Prosperity Partnership® between all these internal & external stakeholders.  

In today’s socially & environmentally conscious environment, all stakeholders but especially employees (current & future) & customers place a high premium on working for & supporting businesses & brands that prioritises Corporate Social Responsibility. There are hordes of definitions & models of what CSR means, but words like integrity, sincerity, sustainability, ethics, resources, market, environment, community, society, corporate governance & responsibility continually crops up in efforts to capture it. Possibly one of the more widely used definitions are one by the World Business Council for Sustainable Development (WBCSD) who defines it as: “Corporate Social Responsibility is the continuing commitment by business to behave ethically & contribute to economic development while improving the quality of life of the workforce & their families as well as of the local community & society at large”.

Four types of practices or categories in CSR, are deemed to be quite common:

1. Environmental Responsibility: Possibly one of the most striking benefits of the global lockdown has been the numerous clips on how nature started to “heal” itself; whether it was the clear blue skies in China & India, or dolphins frolicking in the channels of Venice. The realisation of just how badly we as humans have been over-exploiting nature & our scarce resources, has become poignantly clear.

Companies that are environmentally responsible need to critically analyse their processes & do everything in their power to reduce their environmental impact, especially their carbon footprint & waste disposal. Increasingly employees, future employees & consumers view this as a big requirement for businesses to take action & address the problem. There are many more Greta Thunberg’s – not only the so-called “Greenies” – that will not only be vocal about the state of the environment but become dedicated activists to protect their future.

2. Philanthropic Responsibility: Donating money, products or services to social causes or NGO’s are common social responsibility practices. Making investments in local communities whether it is for educational purposes, health services or other worthy causes, show not only consumers, but the businesses employees, that companies care about them beyond where they spend their money &/or time.

OIM International over time have not only made monetary contributions to many worthy institutions & causes, but many of its consultants have ploughed back their expertise & time in a variety of projects or interventions  – ranging from sensitising of teachers about diversity, conflict resolution in a local authority, entrepreneurship training for a community co-op and hand craft artists.

In recent articles by my colleagues Chris Jacobs and Kobus Grobler they highlighted the incredible impact that the lockdown is presently having & will still have for months to come on our rising unemployment. Potentially, one of the most important areas that companies will have to make a contribution, not only to affected ex-employees, but also the broader community, will be to upskill them. 

Covid-19 has certainly accelerated our entry into the Fourth Industrial Revolution era & the advent of artificial intelligence (AI). Government has an obligation to provide the required infrastructure including high speed internet access & ensuring much cheaper data by the suppliers. Our educational system has to undergo massive restructuring to prepare our children for the challenges, but also the incredible opportunities this will bring. Business on the other hand will have to utilise all their resources & infrastructure, like training centers, to educate & train its employees, ex-employees & even community members where at all possible. If this is not done as a matter of urgency, socio-economic inequality will keep on widening at rapid pace, unemployment will escalate further & poverty spread even wider. 

3. Human Rights/Ethical Labour Practices Responsibility: Human rights responsibility for business generally encompasses treating employees fairly & ethically, condemning child labour & to establish fair business & trade practices. This is especially important for businesses that operate internationally, where labour laws differ from country to country.

Consumers increasingly see it as the responsibility of the leadership of companies to treat their employees fairly, but over & above their own employees, companies also have an obligation to ensure that the suppliers they do business with also take human rights seriously & have fair labour practices.

4. Economic Responsibility: The simple fact is that companies that do not make money cannot stay in business. It is no longer a case of maximum profit at the expense of everything or anybody else.  However, without money, none of the philanthropic or environmental social responsibility ideals is possible.

Sound corporate governance & ethical business practices became an integral part of companies’ economic responsibility especially after the 2008 global financial crisis. This economic responsibility might include finding & implementing more efficient processes & finding ways to minimise wasted capital. However, probably the greatest economic contribution, that any company can make is to provide jobs.

Creating the right political, economic & social environment within which business can continually & responsibly contribute to the communities, society at large & the environment in which they operate & run their businesses, are vital. For companies the triple bottom-line of economic, social & environmental responsibility is not just a “nice to have” but a fundamental business imperative that will ensure its long-term sustainability.