Corporate Responsibility 101

Quote
“Corporate Social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it because it is good for
our business.”

Niall FitzGerald

By Definition
“Corporate Responsibility is the continuing commitment by business to behave ethically, and contribute to economic development while improving the quality of life
of the workforce and their families, as well as the local community and society at large.”

World Business Council for Sustainable Development

Semantic Issues
In literature and the media, Corporate Responsibility is synonymous with some of the following terms: Corporate Accountability; Responsible Investment; Corporate
Sustainability; Corporate Citizenship; Environmental, Social, and Governance (ESG). By far, the most common term is Corporate Social Responsibility (CSR). You
may have seen this in your previous explorations or encounters with these ideas. For this course, Corporate Responsibility (CR) can be used interchangeably with
CSR.

What is responsibility?
Let’s start with some basic definitions of responsibility.
"A duty or obligation to satisfactorily perform or complete a task (assigned by someone, or created by one's own promise or circumstances) that one must fulfil, and
which has a consequent penalty for failure..."

In this sense, we need to think closely about what the "obligation" might be,

 From a CR perspective, what do you think the obligation is?

 What business functions are involved in fulfilling this?
 How do customers interpret responsibility? Obligation?
 What are some of the penalties or failures here?

Companies can demonstrate responsibility in a myriad of ways. They can donate funds to education, arts and culture, underprivileged children, animal welfare, or
make commitments to reduce their environmental footprint, implement fair hiring practices, sponsor events, and work only with suppliers with similar values
(Boundless 2015).

Social Responsibility
Social responsibility is the duty and obligation of a business to other stakeholders. Social responsibility for one group can conflict with other groups, especially
between shareholders and stakeholders. The table on the right illustrates the differing motivations that each stakeholder has – all of which we need to be aware of in
our understanding of our duties to all involved. These various stakeholder perspectives will be addressed further in the course.

Stakeholder Example of responsibility to that stakeholder.

Shareholder Good return on investment.
Employee Fair pay and working conditions.
Supplier Regular business and prompt payment.
Customer Fair price and safe product.
Local Community Jobs and minimum disruption.
Government Employment for the local community.
Environment Less pollution.

social Responsibility
Responsibility takes on a different meaning for each industry and each company within that industry. Still, the basic definition remains the same: to impact society
while also improving its management positively. For example, a company in the energy industry might decide to reduce emissions or change operations in some way
that positively impacts the environment. A company in the social sphere might make an effort to give back to the community by providing services for the less
fortunate. In general, social responsibility is more effective when a company takes it on voluntarily instead of being required by the government or some higher
source.

Watch: Global Leaders Faculty

Mr Peter L. Thigpen, Senior Vice President of Levi Strauss & Co (1987 - 1991), discusses CSR's purpose and benefits.

Watch: Global Leaders Faculty

Corporate Social Responsibility - principle or pretence? Dr Frank-Jürgen Richter, Director of World Economic Forum (2001 - 2004), answers this question.

Watch: Global Leaders Faculty

Ms Susan Moylan-Coombs, Founder and Director of The Gaimaragal Group Pty Ltd, discusses Corporate Social Responsibility and Australia's indigenous
communities.