Corporate Social Responsibility, 2012
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What is Corporate Social Responsibility? Why CSR? How can you effectively deliver CSR...? etc. Enjoy this CSR Presentation we did in 2012 at le Bistro Latin in Douala.
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Corporate Social Responsibility, 2012
- 1. Corporate Social Responsibility, business and society source of wealth RECOM rgie, Infrastructures et Développement Durable rgy, Infrastructure & Sustainable Development Chief Frederic Nguime Ekollo, CEO Afrecom Douala, Amcham - April 17, 2012 efnguime@yahoo.fr Cell.: 77 09 70 00
- 2. Agenda 1. Why CSR? 2. What is CSR? 3.How to effectively deliver CSR ? 4.The virtue matrix & the local content challenge in developping economies RECOM ergie, Infrastructures et Développement Durable ergy, Infrastructure & Sustainable Development
- 3. 1. Why CSR? Corporate reputation is companie’s source wealth Corporate reputations : strategic assets and sources of economic value Profit, Sustainable development & Corporate social responsibility are integrated business challenges . RECOM ergie, Infrastructures et Développement Durable ergy, Infrastructure & Sustainable Development
- 4. 1. Why CSR? Corporate reputation is companie’s source of wealth 2010 Gulf of Mexico oil spill BP at World National Oil Companies Congress in London commented: “Everyone at BP is devastated, and we deeply regret what’s happened. Our hearts go out to those who have lost loved ones. And we are profoundly aware of our responsibilities to those people whose livelihoods and neighborhoods have suffered… I’d also like to make it clear this is not simply about fulfilling our legal obligations ….We feel a huge moral responsibility…. For many years BP has been a part of those communities. Thousands of our employees live in the region, as do thousands more of our retirees. And caring about the communities in which we operate is a core part of what BP is about. As challenging as it may seem in the current crisis, we intend to prove it here too.” AFRECOM
- 5. 1. Why CSR? Corporate reputation is companie’s source of wealth 1985 : Intel Corp’s new Pentium chip calculations limits 1995 : Motorola : cell phones and brain cancer. According to global business executives surveyed, Reputation recovery takes approximately three and one-half years. “Any assault on the reputation of a company is a crisis and reputations are built on how management responds to crises.” Clarke Caywood, professor, Northwestern University. AFRECOM
- 6. 1. Why CSR? Corporate reputation is companie’s source of wealth Business values & corporate reputation Vision & values first Corporate reputation six categories 20 attributes The Value cycle : from Shell, A better way to do business – External affairs in the 21st century AFRECOM Corporate reputation Profits & prospects Financial valueSupportive stakeholders Strategic initiatives
- 7. 1. Why CSR? Reputation management principles Five principles Distinctiveness Focus Consistency Identity Transparency AFRECOM Fortune’s most admired companies have two things in common – They have performed well and their performance has been noted. Corporate reputation is a combination of both perception and reality. Council of Public Remations Firms, US
- 8. 1. Why CSR? Key benefits & opportunities Intangible benefits Improved image Sounder license to operate Increased credibility Consumer and employee loyalty and trust Key benefits & opportunities Brand value & reputation Improvement s in human capital Revenue generation . AFRECOM
- 9. 2. What is CSR? Sustainable Development : the basic paradigm . AFRECOM Economic performance Environmental performance Social performance Sustainability Socio economic Eco development Socio Environ mental The 3 pillars of sustainability Source : Shell
- 10. 2. What is CSR? CSR is generally understood to be the way a company achieves a balance or integration of economic, environmental and social performances (imperatives) while at the same time addressing shareholder and stakeholders expectations . Canadian government CSR as business contribution to the sustainable development goals. It is all about how business takes account of its economic, social and environmental impact in the way it operates; maximizing the benefits and minimizing the downsides. UK Government CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. European Union CSR as business commitment to contribute to sustainable Economic development, working with employees, their families, the local community, and society at large to improve their quality of life - World Business Council for Sustainable Development AFRECOM
- 11. AFRECOM 3. How to effectively deliver CSR?
- 12. AFRECOM Developping local community potential to bene- fit from impact of an activity. PHILANTHROPY SOCIAL INVESTMENT STRATEGIC SOCIAL INVESTMENT SOCIAL IMPACT MANAGEMENT Communities recognise they benefit fairly from the revenues generated by the industry Social impact is identified, planned and addressed as integral part of project management Support for programs /projects related to corporate responsibilities. Grants and Donations unrela- ted to operations or business objectives. Helpful Desirable Essential Critical ValuetoBusiness&Society Type of CSR 3. How to effectively deliver CSR?
- 13. AFRECOM 3. How to effectively deliver CSR? Rules for delivering social investment programs & projetcs Adopt a Strategic approach including policy, strategies, programmes & projects 3 main pillars of the approach Stakeholder management Issues identification & management Strategic impact assessment Projects/Programs Implementation on Strategic Social Investment Manage perceptions/expectations Build Strategic MoUs with and put Delivery Responsibility to Communities Tell me, I will forget Show me, I may remember Involve me, and I will care Measuring & monitoring CSR activities performance
- 14. AFRECOM 3. How to effectively deliver CSR? “When Prudential allowed people with AIDS to tap into the death benefits in their Life insurance policies to pay for medical expenses, the move generated by so much goodwill that competing insurers soon offered viatical settlements as well. Very quickly, corporate behaviour that had seemed radical became business as usual” Source: Roger L. Martin in Harvard Business Review on CSR, « The virtue matrix: calculating the return on CSR »
- 15. AFRECOM 3. How to effectively deliver CSR? Twelve lessons learnt from successful CSR activities 1.Inclusiveness 2.Be proactive 3.Be honest 4.Perception is reality 5.Philanthropy only if required 6.Philanthropy/ Social Investment projects cannot replace impact management. 7.Stakeholder views are what count 8. Know your audience: 9.Face to face communications are the most effective method of communication 10. Utilise existing communication hooks and materials (tools) 11. Use people and resources across operations 12. Encourage external stakeholders to take ownership
- 16. 4. The virtue matrix & the local content challenge in develop- ping economies “In general, CSR in economically advanced countries in generated by deep, solid foundations supporting relatively smaller strategic and structural frontiers. The civil foundations of countries with developing economies , by contrast, are relatively shallow and weak, and their strategic and structural frontiers are Correspondingly large”… “Nike, by running its Southeast Asian Plant And paying its workers in accordance to local Customs and practices was accused of “averaging down” its level of CSR”. AFRECOM Frontier (Intrinsic) Civil Foundation (instrumental) Complianc e Source: Roger L. Martin in Harvard Business Review on CSR, « The virtue matrix: calculating the return on CSR »
- 17. AFRECOM • Value Creation Value Added Knowledge retention Economic multiplier effect • Economically Sound Find an acceptable local content definition • Equal or Better Quality Cost Delivery Safety & Environment • Nurture not Subsidize “What is the extra mile that you need to take?” Key definition features Basic premises Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation , the role of local content » 4. The virtue matrix & the local content challenge in developing economies
- 18. AFRECOM Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation , the role of local content » 4. The virtue matrix & the local content challenge in developing economies Technology transfer Research technology Focuson skills Looking for technology transfer - Getting to the core will take time
- 19. AFRECOM Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation , the role of local content » 4. The virtue matrix & the local content challenge in developing economies Qualification Industrial policy Industry performance Industry capacity Technology qualification Professional qualification RegulationFinancing Tax policy Foster SMEs CompetitiveSustainable HSE Strategic issues Challenge Maximize local content Supplier development Funding initiatives Initiatives on competitiveness The strategic approach
- 20. AFRECOM Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation, the role of local content » 4. The virtue matrix & the local content challenge in developing economies Venezuela Brazil Nigeria T&T Libya Saudi Canada Norway Azerbaijan Algeria Tanzania Ecuador Bolivia Ghana UK Mexico Uganda Kazakhstan Russia Iran Australia Timor Leste Indonesia PNG Malaysia Old timers New initiatives Local content policies in more and more countries Many are looking for more benefits Angola
- 21. HSE & RSE AFRECOM Dialogue with communities Horizontal & vertical Partneship Local content Protection of environment (ecosystems & biodiversity) Thank you
Notas del editor
- Thank Amcham Thanks to Charmain Penda for efforts to get me on board Thanks to all of us for having a dialog on a topic that relates to all of us because we are all concerned : first as business leaders and second as part of the society and therefore as stakeholders
- Introduction The CSR paradigm is growing in our Cameroon business context. I attended the last GICAM conference on CSR and felt the need for replacing things into the right context. We have more SMEs than big corporations in the country but the latest are financially predominant and more visible as corporate businesses. Mulinationals are mostly perceived through a marketing prism. Some are visible on philantropic and social investment activities. Many choose to ignore the challenges of the society in which they operate. As a traditional ruler, I am supportive of local CEOs publicised donations in their villages even though it does not usually address the concerns of their host communities and real business societal issues. I have also witnessed some of them, albeit their small size, being really involved in societal challenges. My purpose today is not to solve this confusion in 30 mns talk. But I believe, as a practitioner and professional, that CSR is a significant untaped reservoir of value, tangible and intangible, for business and society in our context. I therefore suggest that we simplify the dialogue in 3 simple dimensions : Why? What ? And How?
- Answer 1 : Corporate reputation is company’s source of intangible wealth Answer 2: Corporate reputations : strategic assets and sources of economic value Answer 3 : Profit, Sustainable development & Corporate social responsibility are integrated or inter-related business challenges
- 2010 BP oil spill in USA The Deepwater Horizon oil spill (also referred to as the BP oil spill, the Gulf of Mexico oil spill, the BP oil disaster, or the Macondo blowout) is an oil spill in the Gulf of Mexico which flowed unabated for three months in 2010. It is the largest accidental marine oil spill in the history of the petroleum industry.[ The explosion killed 11 men working on the platform and injured 17 others.[ On July 15, 2010, the leak was stopped by capping the gushing wellhead, after it had released about 4.9 million barrels (780,000 m3) of crude oil. On September 19, 2010, the relief well process was successfully completed, and the federal government declared the well "effectively dead". The spill caused extensive damage to marine and wildlife habitats and to the Gulf's fishing and tourism industries.[18][19] Skimmer ships, floating containment booms, anchored barriers, sand-filled barricades along shorelines, and dispersants were used in an attempt to protect hundreds of miles of beaches, wetlands, and estuaries from the spreading oil. In June 2010 BP set up a $20 billion fund to compensate victims of the oil spill. To July 2011, the fund has paid $4.7 billion to 198,475 claimants. In all, the fund has nearly 1 million claims and continues to receive thousands of claims each week.
- These 2 cases simply portraite how business reputation and wealth can be seriously affected through social perceptions. 1985 :The discovery that Intel Corp’s new Pentium chip couldn’t handle some simple mathematical calculations knocked $ 3 billion, or 12% off Intel’s market value 1995 : Motorola saw its capitalization fall by $6 billion or 16% after scientists hinted at a link between cell phones and brain cancer. Crisis situations generate: Negatively affect perceptions of the company by : current and potential customers, employers and communities. losses of economic value loss of reputation Crisis recovery depends on crisis 3 factors : Crisis management Reputation management CSR management Some companies recover dissipated value from crisis quickly than others. Research suggests that the difference lies on how companies handles the crisis and how high or low was their reputation beforehand (au préalable).
- Value & vision first it is imperative that companies first determine : what they stand for, their vision and values, in other words their “corporate magnetic north” . a process to foster this ethic Ethical behaviour helps with employee attraction and retention; Trust with company’s shareholders is fostered; Corporate reputation A corporate reputation translates how people feel about a company It can be good or bad, strong or weak Research conducted by the Reputation Institute shows that people rate companies reputation on one of 20 attributes that can be classified in a set of six categories which is called “Reputation Quotient (RQ)”. The value cycle suggests that : Improved favourable perceptions of market valuations derived from better perceptions of the company’s future prospects These perceptions are developed from observations of supportive behaviour by stakeholders towards the company: growth in revenues, ability to attract more
- Five principles : Distincveness, Focus, Consistency, Identity, Transparency Distinctiveness Distinctive position in the minds of resource-holders Reflecting high quality ,excellence, environmentally friendly company) Focus focusing actions on a core theme (Standard Chartered: seeing is believing...) Consistency in actions and communications. Strong coordination of all staff in charge of public relations, CSR, marketing is key to avoiding overlapping and conflicting communication which inhibites stakeholder loyalty to company’s products. Identity Genuine and authentic. Genuine: manipulating external images are likely to fail if they rely purely on advertising and public relations and if disconnected from the company’s reality. Authentic: rooted in the company’s authentic values, core purpose and behaviours Transparency Communications is crucial to enhance visibility , increase the perception of a credible company and attract support and advocacy from stakeholders.
- Key benefits & opportunities Intangible benefits Improved image Sounder license to operate Increased credibility Consumer and employee loyalty and trust Key benefits & opportunities Brand value & reputation Improvements in human capital Revenue generation .
- Five principles : Distincveness, Focus, Consistency, Identity, Transparency Distinctiveness Distinctive position in the minds of resource-holders Reflecting high quality ,excellence, environmentally friendly company) Focus focusing actions on a core theme (Standard Chartered: seeing is believing...) Consistency in actions and communications. Strong coordination of all staff in charge of public relations, CSR, marketing is key to avoiding overlapping and conflicting communication which inhibites stakeholder loyalty to company’s products. Identity Genuine and authentic. Genuine: manipulating external images are likely to fail if they rely purely on advertising and public relations and if disconnected from the company’s reality. Authentic: rooted in the company’s authentic values, core purpose and behaviours Transparency Communications is crucial to enhance visibility , increase the perception of a credible company and attract support and advocacy from stakeholders.
- Five principles : Distincveness, Focus, Consistency, Identity, Transparency Distinctiveness Distinctive position in the minds of resource-holders Reflecting high quality ,excellence, environmentally friendly company) Focus focusing actions on a core theme (Standard Chartered: seeing is believing...) Consistency in actions and communications. Strong coordination of all staff in charge of public relations, CSR, marketing is key to avoiding overlapping and conflicting communication which inhibites stakeholder loyalty to company’s products. Identity Genuine and authentic. Genuine: manipulating external images are likely to fail if they rely purely on advertising and public relations and if disconnected from the company’s reality. Authentic: rooted in the company’s authentic values, core purpose and behaviours Transparency Communications is crucial to enhance visibility , increase the perception of a credible company and attract support and advocacy from stakeholders.
- 2. Philanthropy and social investment are predominant in Cameroon and Africa in ganeral. They are necessary but not appropriate to fundamental requirements for development and emergence.
- Effective delivery of CSR is a mix of philantropic and social activities that generates value for business and society Strategic Impact management Benefits for business Supporting mitigation . Addressing the “attribution factor” (helping to separate social & economic change from specific company projects). Leadership and competitive advantage (demonstrates leadership, position corporate policy, provide competitive advantage and builds reputation). Selection of partners (SIA can help for successful partnerships through dialogue with stakeholders). Benefits for communities Early input from significant external stakeholders. Early focus on key stakeholder concerns and identification of opportunities for local engagement. Anticipating employment issues. Identification of constraints within the community (education, capacity, local planning and infrastructure) which also affects operational performance. Identification of conflicts between local, regional & national priorities. 2. Philanthropy and social investment are predominant in Cameroon and Africa in ganeral. They are necessary but not appropriate to fundamental requirements for development and emergence.
- Rules for delivering social investments programs & projetcs Adopt a Strategic approach including policy, strategies, programmes & projects 3 main pillars of the approach : Stakeholder Management - Issues Identification & management - Strategic impact assessment Projects/Programs Implementation on Strategic Social Investment Deliver SP value through projects/programs. Ensure single company representation in the community. Build strategic alliances/partnership with local & international development agencies as well as the private sector for co-funding and program implementation of Strategic social investment. Manage perceptions/expectations Avoid to be perceived as Government surrogate for the local development Advocate for Government participation in economic development specially in the host communities locations. Build Strategic MoUs with and put Delivery Responsibility to Communities Base actions on strategic Memorandum of Understanding (MoUs) at local level. Project Implementation responsibility will be given to communities through Projects Advisory Committee/Project Management Committee.
- Rules for delivering social investments programs & projetcs Adopt a Strategic approach including policy, strategies, programmes & projects 3 main pillars of the approach : Stakeholder Management - Issues Identification & management - Strategic impact assessment Projects/Programs Implementation on Strategic Social Investment Deliver SP value through projects/programs. Ensure single company representation in the community. Build strategic alliances/partnership with local & international development agencies as well as the private sector for co-funding and program implementation of Strategic social investment. Manage perceptions/expectations Avoid to be perceived as Government surrogate for the local development Advocate for Government participation in economic development specially in the host communities locations. Build Strategic MoUs with and put Delivery Responsibility to Communities Base actions on strategic Memorandum of Understanding (MoUs) at local level. Project Implementation responsibility will be given to communities through Projects Advisory Committee/Project Management Committee.
- The virtue matrix highlights forces that generate CSR Bottom quadrants : Civil foundation: norms, customs, laws & regulations Behaviour here does essentially meet society’s baseline expectations. Companies guided by choice or compliance It instrumental as it serves at maintaining or enhancing shareholder value Upper quadrants Frontier: