Corporate Social Responsibility:

Partnership Planning and Sustainable Development

By Jerome Donovan
Senior Legal Advisor, IP3 and
Counselor, Visible Hand

About the Author...

Jerome Donovan is a legal and regulatory specialist who has worked with public and private enterprises in scores of countries to enact legal, regulatory, and managerial reform. He is currently the legal advisor to Visible Hand where he is involved with corporate planning projects. Mr. Donovan received his J.D. from Columbia University Law School and his B.A. in history from Yale University.

Introduction

Historically, corporations doing business in developing and emerging market countries have discharged their social-responsibility obligations to local communities in several ways. Often they would build a school, clinic, or some similar facility. Or, they might hire local employees. But too often, these efforts have failed to survive the corporations' departure from the community, leaving behind costly local disillusionment and even hostility.

In today's wired world, things are different. Corporations doing business in developing and emerging market countries can no longer do business as usual. Thanks to the Internet and the Web, governments, regulators, shareholders, regulators, their own employees, and ordinary citizens are constantly being evaluated by various stakeholders. Corporations, utilizing public-private partnership models, have begun to work with communities in cooperative and sustainable ways when, for example, they drill for oil, dig for minerals, build a toll road, or construct a water-treatment plant. If they fail in this outreach, they risk paying a large price in adverse worldwide publicity, local hostility, and often reduced financial return.

To be effective, corporations are no longer relying solely on their in-house foundations, human resources departments, or public relations departments to build these partnerships. Instead, they are scouring the world for workable corporate social responsibility (CSR) models, in a range of sectors.

Below, we discuss how corporations formulate and implement workable CSR strategies and models and how a new organization, Visible Hand, is giving both corporations and community-based organizations (CBOs) the tools to structure and finance actual projects in collaborative and sustainable partnerships.

A Primer on Corporate Social Responsibility (CSR):
CSR Reflects a Corporations Culture

A corporation's CSR initiative reflects its culture and values. Any CSR initiative should be viewed as an extension of its corporate mission, whether that mission includes giving something back to society generally or assuring that the corporation's involvement in local communities is both realistic and serious. What is most fascinating about the new emphasis of CSR is that corporations are beginning to manage CSR as a strategic activity. They now see CSR as an essential component to their long-term business success, both in terms of structuring and implementing sustainable local projects and as evidence of a coherent globalization strategy. Corporate managers can influence CSR strategies by stressing the benefits to stakeholders in the project at hand: the corporation's shareholders, its employees, and the local communities in which the projects are operating. There are several emerging trends to ensure CSR effectiveness:

CSR is linked to Overall Business Strategy. Corporations are coordinating the activities of their in-house foundations and other philanthropic mechanisms around their main business (their core competencies), ensuring that all of their CSR efforts are focused in an efficient way on what the corporation does best.

Strategic Partnerships are Crucial. Increasingly, corporations are using partnerships with other corporations and organizations to increase the local impact of their CSR efforts. This higher level of collaboration builds commercially useful relationships and facilitates efficient project-selection. Savvy corporations are proactive, initiating dialogues, brokering relationships, and exploring opportunities for CSR with like-minded groups.

Increasingly, Corporations are Using CSR to Address Problems Root Causes. Corporations are broadening their understanding of how to support social change. They are addressing behavior and attitudes, such as education, gender equality, child labor, and micro-enterprise development. Often they are seeking opportunities to promote health care, which is of clear strategic importance to both business and society. They are instituting workplace programs and then expanding them to the community at large, showing how preventable epidemics devastate business and economic advancement specifically, as well as society in general.

Examples of Corporate Social Responsibility In Action¹

A number of companies are already effectively implement corporate social responsibility partnership programs. Highlighted below are several case examples.

In the Workplace: Daimler-Chrysler South Africa HIV/AIDS Program. Daimler management decided that HIV/AIDS was a strategic business issue because it threatened the long-term sustainability of South African business. In consultation with employee organizations, management partnered with the international aid agency GTZ of the German Government to devises policies and preventive workplace programs that met international standards. These programs were soon extended to the broader community.

In the Community: Statoil Venezuela/Human-Rights Training for Judges. Statoil's negative experience in a number of countries involving human rights issues prompted its selection of human rights as a core value of its business and the focus of its CSR program. It partnered with the United Nations Development Programme (UNDP) and Amnesty International to train local judges, in a willing country environment, Venezuela, in basic human rights and the legal processes . In so doing, Statoil sought to both effect a change in local attitudes on human rights and change official behavior.

Leveraging Marketing Competencies: MTV Global HIV/AIDS Initiative. MTV's top leadership used its unique core competence access to young people to address a tough issue by broadcasting behavior-change messages. It partnered with the US Agency for International Development (USAID), UNAIDS, and several NGOs to develop these messages. It also monitored and evaluated the effectiveness of the programming.

Cause-Related Marketing: Proctor & Gamble Spain/UNICEF Spain. P&G knew that tuberculosis (TB) is a leading cause of death among youth and adults in West Africa. It also knew that TB vaccines are cost-effective. So, in Senegal, it worked with UNICEF to co-brand its Fairy antibacterial soap and UNICEF's TB-vaccination campaign. P&G donated one dose of TB vaccine for every bar of Fairy soap it sold, effectively linking good health to its antibacterial soap. The involvement of the World Health Organization (WHO) added additional credibility to the campaign.

Market-Expansion through Innovation and Technology: IBM Re-Inventing Education Program. IBM saw that applying its core competencies (information technology) to chronic social problems would be a corporate opportunity, too. It realized that technology could revolutionize public education, which, in turn, would stimulate its own technical development. So IBM made CSR a centerpiece of it business strategy. Its researchers and engineers worked with teachers and school administrators to introduce more information-technology based solutions to education, and its own business development was stimulated.

Case Study on Visible Hand:
Bringing CSR to Local Communities

In the new CSR environment, corporations often find themselves lost when attempting to navigate complex cultural, political, and linguistic barriers to community partnerships. Similarly, community or regional organizations are unsure how to structure sustainable projects and find the skills and investors they need to implement them.

How can corporations find reliable local partners and bankable and sustainable projects? How can community-based organizations (CBOs) attract the attention of corporations, foundations, government agencies, and service providers to finance and advise their projects? Visible Hand is one such vehicle to help with that process

What is Visible Hand?

Visible Hand (VH) is an organization that assists corporations, government agencies, foundations, Etc., identify and build relationships with community-based organizations, especially in the Middle East, North/East Africa, and Asia. VH especially helps corporations transform passive philanthropy into sustainable social investments that result in increased sales, local receptivity, lower legal costs, and higher brand recognition community-based organizations (CBOs) show their relevant credentials to prospective corporate investors, foundations, grantors, and service-providers

What Are Visible Hands Services?

VH offers two basic services. First, the Visible Hand's "Handtools" program provides a forum for community-based organizations, and corporations, government agencies, foundations, and service-providers work together in an online environment to structure sustainable projects. The result: CBOs find funding and expert services for their projects; corporations, grantors, and service-providers find viable projects to support. CBOs use the Handtools free of charge. Others pay VH modest membership fees. Second, through its databases, VH takes corporations through strategic audits and transparency audits new elements of CSR. VH also maintains a database of experienced development professionals and provides consulting services to corporations in a wide range of CSR-related issues, as described below. Use of most of these resources is included in membership fees. Use of some premium resources requires an additional per-use fee.

Conclusion

As corporations globally expand operations, senior leaders are coming to the understanding that good social responsibility policy is good for business and the bottom line. As critical problems persist in the developing and emerging market world, the assistance that corporations can provide could not come at a better time. Forging new partnerships with community-based organizations, governments, and the donor community will not only strengthen and leverage existing resources, but also create new and creative means to address social and economic concerns in a community.

¹ Examples sourced from a presentation by Deloitte, Touche Tohmatsu, funded by USAID, on "Understanding Commercial Sector Models for Corporate Social Responsibility", June 2002