While there is no agreed-upon definition, the World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR as the business commitment and contribution to the quality of life of employees, their families and the local community and society overall to support sustainable economic development.
In the developing countries (CSR) has become a touchstone of corporate trust and a predictor of business longevity. In Pakistan, CSR is still a buzzword for most of the organisations and individuals and the state of CSR is still in its infancy. Unfortunately, the local industry is either unaware of the benefits brought by CSR or they feel that even if they do not adopt such policies, they are not in any state of danger.
This stems from either misunderstanding the true philosophy of CSR or ignoring it. With changing times, it has now become inevitable for the businesses to attain the internationally accepted norms of corporate social responsibility.
ROLE OF HR'S LEADERSHIP IN CSR: In recent years, intangible assets company values, human and intellectual capital, reputation and brand equity have become increasingly important to organisations. Companies that exhibit good corporate citizenship are likely to gain a competitive edge.
At home and abroad, HR plays a critical role that of leading and educating their firms regarding the importance of CSR while at the same time strategically implementing sound HR management practices that support the company's business and CSR goals. Some of the aspects of business dimensions where HR leaders can bolster the performance of the Companies provided these are success fully implemented in their organisations are:
REPUTATION AND BRAND ENHANCERNENT Company reputation and brand are greatly influenced by public perception. Today more and more people want companies to go beyond making money and contribute to broader society goals.
ACCOUNTABILITY AND TRANSPARENCY: Open, reliable and regular reporting of a company's performance known as accountability and transparency in CSR terminology is quickly becoming a public issue. As a sign of the times, large companies are beginning to publish company information, once deemed as too sensitive to release, with expectations for their suppliers and their internal human resources practices.
THE TALENT WAR: With the anticipated labour shortage in the next 10 to 25 years, attracting, developing, motivating and retaining talent is, and will continue to be, very important. Correspondingly, CSR influences a company's competitive advantage today through two key value drivers, company reputation and brand and human capital. HR leaders have begun to assume leadership roles to address both areas. In addition, the talent war is evidenced by an influx of "best places to work" awards.
HR'S LEADERSHIP ROLE: With company reputation, viability and sometimes survival at stake, one of the critical roles of HR leadership today is to spearhead the development and strategic implementation of CSR throughout the organisation and promote sound corporate citizenship.
Attracting and retaining competent people is one of the primary business reasons for CSR. While strategically including CSR in the organisation can begin from different points (eg, product safety, the board of directors, business development), it makes good business sense for HR to head the process and partner with strategic leaders in the firm because human capital is arguably the number one intangible value driver.
THE STATUS OF CSR IN THE ORGANIZATION: HR leaders can influence three primary standards of CSR ethics, employment practices and community involvement-that relate either directly or indirectly to employees, customers and the local community, as outlined below (16). By considering these three CSR standards, HR leaders can then identify the CSR stage of their organisation before making decisions to develop and implement CSR initiatives.
Focusing on company values, HR leaders set the tone for an organisational culture that is open to and understands CSR. HR's role as a change agent grounded in mutual respect, and open and honest communication is essential to educate management and employees about including CSR when setting business goals and objectives.
HR AND COMMUNITY RELATIONS: One of the most visible CSR initiatives is community relations. Strong community relations can have a positive impact on company reputation and brand. Through community programs that highlight the company doing good work, HR can link critical issues--decreasing turnover, savings on cost per hire and attracting talented individuals--to CSR and the bottom line. There are many other possibilities that HR leaders could explore to match both company and community needs (eg, cultural facilities for the community an educational project to help prepare tomorrow's workforce, recreational facilities for employees and their families).
WHAT DOES THE FUTURE HOLD?Over the next five to 10 years, one of the primary tests of how society will judge companies will be based on where corporations place their facilities, how they source goods and services and what economic impact they have on poor and disadvantaged communities. Companies will increasingly adopt a comprehensive view of corporate citizenship that includes the environment and community engagement.
Not surprisingly evidence suggests that companies have a long way to go to clearly demonstrate substantive CSR performance. For example, a global ranking report notes that the world's 100 largest companies have a poor record of accounting for their impact on society and the environment. Consequently since the CSR initiatives of most organisations tend to be peripheral and isolated from their core businesses and the initial momentum gained in the past few years appears too disjointed to make a significant impact in the world.
In conclusion, with the growing importance of human capital as a success factor for today's organisations, the role of HR leadership will become evermore critical in leading and educating organisations on the value of CSR and how best to strategically implement CSR policies and programs domestically and abroad.