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CORPORATE SOCIAL RESPONSIBILITY...MAGIC OR MYTH? It was President John Kennedy who said, “A rising tide li!s a" boats.” but is Corporate Social Responsibility a" it’s cracked up to be? writes Darryl Judd, COO for Logistics Executive Group. It has been bandied around as yet another corporate “feel good” that is “trending” at the moment. Corporate Social Responsibility (CSR) is fast becoming an industry in itself, interspersed in corporate frameworks globally, and infused universally in standard business practices. Human Resources units are lavishing large budgets on CSR initiatives in the quest for their holy grail, which is envisioning an engaged employee workforce but does this work? Is CSR good for business on a wider framework? The Logistics Executive Employment Market Survey 2012 explored these questions and the perception of CSR in the market place. The survey found that whilst CSR was a focus for 74.2% of organizations, the respondents in leadership roles revealed that there were barriers to the wider adoption of CSR in the following areas: Cost, Unclear Benefits and lack of Senior Management Support. This suggests that there is still some confusion at executive level about the commercial benefits of CSR initiatives. Defenders claim that CSR increases the virtue of the company and employee brand. For example Human Resources professionals argue that CSR enhances employee engagement and the employee brand. It therefore increases employee retention and enhances talent acquisition strategies.
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CEO EXECUTIVE SERIES! 27 APRIL 2012
© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 1
Upcoming Events5th Global Logistics and SCM
Summit on 30th May 2012Attended by 250 plus professionals from 30 plus countries, the summit is an intense discussion on strategies for s u p p l y c h a i n a n d l o g i s t i c s management and brings together many global thought and industry leaders. This is a must attend summit by all engaged in supply chain and logistics industry. Held in Dubai, UAE, May 30, 2012.
(click here to find out more)Global Logistics and Cargo
Symposium 2012 - MalaysiaThe theme of the symposium “ E c o n o m i c T r a n s f o r m a t i o n , Leadership success and Integrity” and it highlights the challenges and opportunit ies for supply chain, stakeholders in the region as well as showcasing its homegrown best practices in supply chain and logistics management. Held in Kuala Lumper, Malaysia, June 27-28, 2012.
(click here to find out more)
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Already with a candidate database of 80,000 plus Supply Chain and Logistics professionals globally, Log is t ics Execut ive ’s indust ry networking group on LINKED IN recorded a key milestone in April by becoming one of the few specialist groups to exceed 10,000 members. The Logistics Executive LinkedIn Group is quickly becoming the hub for global supply chain and logistics experts and is free to join.
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CORPORATE SOCIAL RESPONSIBILITYMAGIC OR MYTH?
It has been bandied around as yet another corporate “feel good” that is “trending” at the moment. Corporate Social Responsibility (CSR) is fast becoming an industry in itself, interspersed in corporate frameworks globally, and infused universally in standard business practices. Human Resources units are lavishing large budgets on CSR initiatives in the quest for their holy grail, which is envisioning an engaged employee workforce but does this work? Is CSR good for business on a wider framework?
The Logistics Executive Employment Market Survey 2012 explored these questions and the perception of CSR in the market place. The survey found that whilst CSR was a focus for 74.2% of organizations, the respondents in leadership roles revealed that there were barriers to the wider adoption of CSR in the following areas: Cost, Unclear Benefits and lack of Senior Management Support. This suggests that there is still some confusion at executive level about the commercial benefits of CSR initiatives.
Defenders claim that CSR increases the virtue of the company and employee brand. For example Human Resources professionals
It was President John Kennedy who said, “A rising tide li!s a" boats.” but is Corporate Social Responsibility a" it’s cracked up to be? writes Darryl Judd, COO for Logistics Executive Group.
CEO EXECUTIVE SERIES! 27 APRIL 2012
© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 2
argue that CSR enhances employee engagement and the employee brand. It therefore increases employee retention and enhances talent acquisit ion strategies.
The counter a rgument however is that most companies have yet to put clear measures in place that can articulate these benefits and the link to CSR. The reality is that shareholders a re more l ike l y to l ean on executives to deliver clear metrics relating to profits rather than these soft targets.
The truth is that without hard metrics, CSR becomes largely ineffective. According to political scientist Brendan Nyan, it could be argue that CSR is an easily manipulated medium. “Much of what passes for CSR is just stroking the egos of senior mana gement . Ha v ing the corporation make contributions to causes favored by senior management is, from their point of view, the best kind of charity, because they get to spend other people's money rather than their own. (They still get all the glory, of course, at those nice Man of the Year dinners and at the country club bar.) That's not in the interest of the corporation, it's just a form of non-monetary
compensation. And doing it is a breach of their fiduciary duty to shareho lders , e ver y b i t a s ob ject ionab le a s us ing the corporate jet for their own pleasure trips”.
Of course there is the risk - or some more cynically would say scandal avoidance - side of CSR. Consumer activists have used their new-found media clout to bully corporates into action against social injustice. Business leaders have become painfully aware that consumers don’t just buy goods these days. No, these days they like to “interact” with their favorite brands. They are educated, market savvy and demanding. They belong to a modern global workforce that has topp led go ver nments w i th Facebook during the spring uprisings and brought major Corporates shamed over poor business practices.
The only way forward for CSR it would seem is through a better understanding of this concept. Companies need to carefully prepare the way before implement ing the i r CSR programs. Executive decision makers need to be bet ter educated on what a true CSR program involves. Employee involvement needs to be a driver
of the concept from the outset and companies acting as the enab le r s . C lear l y de f ined processes and t ransparent metr ics put in p lace . The concept of “social accounting/auditing” practices need to be implemented so that CSR responsibilities can be linked to outcomes in meeting the agendas o f the i r corporate and community s takeho lders . Transparency, accountability and ownership by all stakeholders are the underlying principles here and the key to success.
It isn’t surprising therefore that Execut ives a re a b i t resistance to embark on a CSR program considering that they invest their company profits on a process that they have little control over – as this is largely handed over to their staff – and are often being dictated to on who and how they can do business by consumer activists. It is therefore worth asking, what can CSR offer if it is done well?
Wejuan Yao, Director for China of Verite last year at the Supply CHIaNA 2011 Business Summit in Shanghai gave an impassioned presentation on “Trends in China Labor Relations and the Implications on Supply Chain CSR Issues”.
Wenjuan is an example of moder n China . She personifies in many ways the human challenges faced by a workforce in an emerging economy. Her recent assignments have seen her consu l t ing to fore ign company’s who are trying to mana ge their corporate image by ensuring the labor conditions of their Chinese suppliers meet requirements. Workers ’ conditions are highly topical all over the world and have become a subject of open debate, even in China. Wenjuan provided a new perspective and a voice to what was already a
Above: Findings #om Logistics Executive’s 2011-2012 Global Employment Market Report
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ner vous murmur a t the Conference from many large corporates in attendance. That is, the dramatic improvements in the Chinese economy that have led to the emergence of a new kind of Chinese worker who is educated and a lot more aware and demanding than previously.
This is an issue about dealing with change more than anything. In Wenjung’s words “China’s economy, the internat ional community, as well as all factories have been benefiting from the unlimited and well-disciplined cheap labor supplies in China over the past 30 year and we are now facing the turning point. When the tide goes down, the competition for survival will become fierce. Meeting CSR requirements may – finally -- become a rea l compet i t i ve advantage for them in the near future.”
In this case, Wenjung is acting as the conduit, she is using CSR policy to build a bridge, which is creating a new era in China’s economic history by and bringing cohesion through a process of radical change in employment conditions. Of course we don’t all belong to large corporate entities. Successfully implemented CSR can also be found in smaller entities that have the advantage of easier to
access staff and more ega l i t a r i an teams . “There are some basic commonsense rules that can be applied to al l companies f rom small to large who wish to ensure their CSR meets the rigors and changing demands of the market p l ace” accord ing to Kim Winter, CEO of Logistics Executive. Of course Kim would know all about this subject as he is not only the founder of Logistics Executive but also the co-founder and CEO of Oasis Africa, a l ead ing char i ty organizat ion which supports the orphaned children of the Kibera slums in Africa. At Logistics Executive there is a strong voluntary involvement by staff. “Often it’s the giving facet of the CSR experience that is the most personally rewarding,” says Kim. “It can act as a culturally defining facet for your staff. It gives all of us a sense of purpose and great pride to tell our story,” he continues. The extent of Log i s t i c s Execut ive ’s commitment to Oasis Africa also acts as a brand differentiator with charity fundraising initiatives and
events offering a fun and rewarding part of their client experience.In simple terms i f Corporate Responsibility is implemented effectively i t ac t s a s a b u s i n e s s enab le r that can serve two main purposes: 1.R i s k A v o i d a n c e strategy - To
prevent the company f rom making errors of judgment in their supply chain that wil l expose them to undue risk. These risks may include sourcing from disreputable suppliers who employing workers under poor conditions or who are not using environmentally sound practices. This is part of the corporate risk management strategy, a defensive approach to protect the company’s reputation.
2.Employer and Corporate Brand enhancer - An active community initiative that is based on philanthropy and aligns with the corporate brand. This promotes the cus tomer ’s experience of your brand and ties in with their values but it is only effective if employees drive it.
Wenjuan brought i t a l l together for everyone in her presentat ion , by quot ing President John Kennedy who said, “A rising tide lifts all boats.” This resonates more than ever today as global market growth and new technologies keep proving that we are all in this together.
Making New Friends. Sponsor Kim Andrews visits Oasis Africa in Kibera
Above: New Zealand artist Gabrie"e Pool paints a co"ection to be later auctioned at a fundraiser for Oasis Africa
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Logistics Executivewww.logisticsexecutive.com
AustraliaSydneyPhone: +61 2 8262 9800
MelbournePhone: +61 3 9863 9488 AsiaShanghaiPhone: +86 21 6427 6697 SingaporePhone: +65 6818 9745
Hong KongPhone +852 3125 7654
India Phone +91 22 4090 7053
Middle EastUnited Arab Emirates - DubaiPhone: +971 4 361 6275
New ZealandWellingtonPhone: +64 4 496 6730
Darryl JuddChief Operating Officer Logistics Executive Group
With more than 20 years of executive experience in Aviation, Supply Chain and Logistics Transport Industry, Darryl has held executive positions within the airline & aircraft leasing/charter industry and major logistics organizations.
He is regularly called upon to manage key human resources consulting projects and supporting business to drive changes, particularly around M&A activity and international executive management.
For a copy of the 2012 Logistics Executive Global Employment
Report email: [email protected]
Oasis Africa Australia www.oasisafrica.net is a not for profit Australia Government registered and audited humanitarian organization established in 2005 to support a small group of homeless orphaned children found in East Africa’s largest slum, Kibera, located in Nairobi Kenya. Kibera slum is home to over 1,000,000 people with 50,000 orphans and vulnerable children, has little or no infrastructure, electricity, running water or sewerage facili-ties, security is poor with no formal policing, government hospitals or clinics, disease is rampant with prevalence of AIDS being more than double the already high average for Sub Saharan Africa. Oasis Africa was originally initiated to provide schooling access to 50 children and currently provides ongoing education (primary and secondary), educa-tion, food and security to over 1000 young people based on the prem-ise that education offers a genuine road to freedom from poverty.
What are we doing about it?Logistics Executive’s involvement in this project is aligned to its corpo-rate social responsibility mandate and since this time it has maintained
sustainable en-gagement through fundraising events involving many international sup-ply chain and lo-gistics partners that share similar CSR values. The project continues to build a self-help model where the local community takes increasing
responsibility for the end to end supply chain upon which the school operates. Oasis Africa Australia’s low cost operating model is based on a plat-form of skilled logistics and supply chain industry volunteers contrib-uting time to run the organization efficiently and engage with industry partners who engage in fundraising events and onsite project develop-ment and initiation activity in Kibera. Well-planned, high activity and output supporter trips are made to Kenya annually in coordination with resource requirement and deployment plans generated by the lo-cal community.
