The corporate responsibility movement is too concerned with communication and not enough with performance, David Logan argues. There’s another option, however, as history shows.
The ‘social auditing’ of business is in large part a product of its historical context. Born out of a reaction to 1950s consumerism, it became particularly strong in the USA in the 1960s and early 1970s. These were the days of Ralph Nader leading consumer revolts against unsafe products, the Greens beginning to flex their campaigning muscle, and women and minority groups pushing hard for greater equality of opportunity. The political mood was ripe for greater corporate accountability.
So what was the response of the then Kennedy/Johnston Democratic administration? Answer: legislation, and lots of it. With new laws come new regulatory bodies. Organisations like the Consumer Product Safety Commission and the Environmental Protection Agency were set up to enforce the new legislation, but they also had a responsibility to report in general terms on corporate performance as it affected specific stakeholders.
These external pressures, which continue to characterise the CSR debate today, are inevitably drawing companies into providing data according to external demand. Whether it’s the wagging finger of Western NGOs or the cottage industry of SRIs and rating agencies, the demands on companies for data are potentially infinite.
To manage this, companies are being forced relentlessly to expand and redefine their communications strategy on a global level. While such communications are important, they are no substitute for investment in measurable CSR performance in every business function and operating company around the world.
Which leads us on to a complementary approach- one that history has largely overlooked. In his seminal book, ‘The Social Audit for Management’, Clark C. Abt was arguing as early as 1977 that national legislation is a slow and very limited way of changing global corporate behaviour. His alternative was to set out a route map for the active self-management of a company’s responsibilities, based on the ability of managers to identify, measure and act on their major social and environmental impacts. His self-assessment techniques are similar to those that drive all quality management systems. They consequently helped managers to become pro-active about addressing their major responsibilities and- importantly- anticipating the external challenges. Educating managers in operating countries and in non-CSR functions, like HR and procurement, remains equally valid today if corporate responsibility is going to spread from Argentina to Zimbabwe and all countries in between.
As Abt would argue, the primary audience for social auditing and reporting should be the internal one. It’s the CSR performance of the much-maligned middle mangers, the people who actually run the business on a day-to-day basis, which guarantees corporate reputations. Get them onside, and communications and performance rightly become two sides of the same coin. An externally-driven approach to CSR prevents companies from recognising this, with the result that communication budgets are eating more and more into the limited CSR pot. Instead, more should be spent on equipping country and functional managers. Then they would have their own story to tell to stakeholders in their own countries.
David Logan is a founding director of The Corporate Citizenship Company.
Over the last 15 years in consultancy, David has specialised in helping US and European companies internationalise their citizenship programmes and set up self-assessment systems to monitor and measure them.
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