Patrick O'Meara, Membership Director BITC, responds to Ian Christie on the 'Hot air of CSR'

On the 6 February, Stephen Howard, CEO of Business in the Community, responded to Stefan Stern's article in the Financial Times that claimed corporate social responsibility (CSR) in a recession is 'hot air'. Ian Christie wrote back to claim that BITC has not taken any action against its member companies, despite the evidence of irresponsibility in the banking sector. Patrick O'Meara, BITC Membership Director, has responded to say that it is 'more important than ever to remain engaged with companies whose path to corporate responsibility is more complex'.

Ian Christie's comment:

On the 27 February, Ian commented:

“Stefan Stern's comments are so ludicrous we can ignore them. Instead let's focus on Stephen Howard's welcome but still very inadequate acknowledgement that 'more focus is required' from the BITC world on some key issues, such as governance, remuneration and short-termism. The fact is that the scandalous mismanagement of banking, the failures of governance involved, and the outrageous abuses in executive pay, have all occurred with no comment or action of any substance from BITC. No company has ever been reprimanded, suspended or ejected for breaches of the spirit of CSR. Yet we see across the financial sector that CSR has co-existed with and made no difference to the growth of CSI - Corporate Systemic Irresponsibility. BITC must stop pulling its punches. It is crunch time for CSR.”

Patrick O'Meara's response:

Business in the Community is pro-business and business-led. We take an inclusive policy on membership, which is to say that we welcome all legally run businesses into membership.  This includes companies that are sometimes seen as controversial in their sectors. And our approach demonstrably helps raise the bar.

Ultimately there are processes and structures quite apart from Business in the Community that are there to police our members’ corporate behaviour and the products and services they can legally provide.

Put bluntly, we want to hold 'conversations with disbelievers', to borrow from the title of the book of the same name (Weiser and Zadek 2000).  These conversations - are supportive, challenging and give us the opportunity to get many companies adopting responsible business frameworks for the first time, which we believe to be better than leaving them to get on with it, without a critical friend to advise and challenge them. 

During a recession, when business’ and wider society’s focus will rightly shift to determine how we minimise the risk of similar corporate and market failures in future, it is more important than ever to remain engaged with companies whose path to corporate responsibility is more complex.

Sadly, there is no quick fix for the failures and mismanagement that have led us thus far; culturally, adopting responsible business frameworks that sit at the heart of a business’ ethos takes time to integrate, unless a business has always operated that way.

But it is not impossible. Solid leadership, governance and communications are vital if a company is to truly embed responsible business practice into decision-making processes, the mentality and culture – its DNA – so deeply that in time ‘CSR’ is no longer seen as a separate function of the business, but fundamental to its success or failure.

The belief that financial incentives associated with remuneration are the only way to motivate employees needs to be coupled with a renewed focus on those factors which motivate behaviour: recognition, status, career progression, disciplinary sanctions and the intrinsic satisfaction of a job well done.

As Stephen Howard states in his response to Stefan Stern, “Business in the Community has always advocated that wealth creation is an essential element of being a responsible business.” What we also advocate is that wealth creation cannot be the only essential element of running a successful business – as much value must also be place on staff morale and wellbeing, environmental impact, social and community cohesion and marketplace responsibility. Ignore one or more of these areas and there is likely to be an impact on overall performance and competitive advantage.