- Look through a selection of corporate social responsibility/sustainability reports from Egyptian Listed Companies. What reasons do the companies give for producing the report? Do their reasons coincide with a business case or a pure ethics motive for corporate social responsibility?
There are two kinds of business or corporation. The first type goes after profits and the second one does not, hence the names for-profit and not-for-profit organizations. The former exists to make profits and it can be asserted that the main priority of such organizations is to generate profits above anything else. On the other hand, the latter exists not to make profits but rather to advocate things (as in the case of environmental and political advocates). There can be cases wherein not-for-profit organizations are pushed to create profits because of the nature and the resource requirements of their activities. Corporate Social Responsibility is a concept in business and organizational management whereby organizations (regardless of what type) integrate society’s latest concerns (e.g. environmental and social issues) in the operations, processes, and interactions of the organization with its suppliers, down-lines, and other stakeholders . By implementing a Corporate Social Responsibility or CSR strategy, companies can integrate and achieve balance between the economic, social, and environmental goals of their company as what is indicated in the Triple Bottom Line approach. In most cases, business organizations, including those that are based in Egypt and in other international markets, implement a CSR strategy to boost their image to the public and show that the company does not only care about the profit but is also interested to take part in the process of solving primary issues in society that presumably affect the lives of a lot of people . However, Egyptian organizations should not make the mistake of focusing all of the company’s efforts and resources for CSR initiatives because their main goal should still be to meet and address the expectations of the company’s stakeholders and shareholders, above anything else. Besides, the company would not be able to make their CSR initiatives effective without the necessary funds and human resources (which by the way can only be acquired if there is proper funding).
Bae, J. and S. Park. "Corporate Social Responsibility as a Crisis Communication Strategy." International Communication Association (2007): 1.
Jacques, A. "Socially Conscious: Companies Share CRS Best Practices." Public Relations Tactics (2010): 12-13.
- Do you agree that stakeholder responsibility is taking precedence in businesses in recent years? Do you think that the global financial crisis is focusing greater attention on corporate governance? Explain your answer.
If an organization’s goals would be divided into two general classifications, those goals can either be classified as primary and secondary goals. The main goal of a for-profit organization is to generate profits above anything else. The process of participating in corporate social responsibility initiatives therefore falls on the secondary classification of goals. I agree that as stakeholder and corporate social responsibility is taking precedence in business in recent years. One of the major reasons behind this phenomenon is the increase in the literacy and awareness of the members of society. They know that aside from making profits, corporations, especially conglomerates, can afford to contribute to the efforts of ordinary groups of citizens in making society a greater place to live . However, I’d have to disagree on the idea that the global financial crisis has caused organizations to focus greater attention on the corporate social responsibility aspect of corporate governance. This is because above anything else, organizations would go after profits over CSR initiatives first even if it means a good thing for the company’s image . After all, Egyptian organizations would not be able to initiate their own corporate social responsibility programs or even participate in other organization’s CSR initiatives without shelling out a significant amount of funds—funds which they can only generate by doing their business’ forte.
Killian, S. "Corporate Social Responsibility: A Guide with Irish Experiences." Accountancy Ireland Business Source Complete (2012).
Weyzig, F. "Local and Global Dimensions of Corporate Social Responsibility in Mexico." Journal of Corporate Citizenship (2006).
- Do you think the role of non-executive directors, auditors, the internal audit committee and the board of directors are all equally important as mechanisms of good corporate governance? If not, which mechanism do you consider is the most important?
When it comes to the corporate social responsibility aspect of governing a corporation, the groups of people that can participate depends on the nature and or focus of the CSR initiatives of the company . However, it often starts from the decision and mindset of the members of the executive board . Once the members of the executive board committee approves a plan to participate in an existing or initiate a new CSR effort, non-executive members of the organizations, auditors, including the internal audit committee are all expected to follow. However, the internal auditing committee usually operates autonomously from the corporation’s original chain of command. Members of the internal auditing committee are just practically there to do their job to audit but they are not in any way liable to follow any instructions related to the implementation of a CSR initiative. I believe that the decisions of the groups of people in a corporation are not equally important in corporate governance. Usually, it is the role of the individuals who are assigned in the planning process of any aspect of corporate governance that matters more because everything starts from those planning roles. Once everything has been planned, other groups or divisions in the organization will just have to follow so that the planned CSR program for example would be successfully executed. The role of the internal auditing committee in auditing the corporation’s every process can also be considered important because from there, the members of the executive board committee can check if there are still ways how they can improve the current processes.
Wyatt, C. "Conference Line Rebrands in Response to New CSR Focus." Conference and Incentive Travel (2009): 6.
Irwin, R. "Corporate Social Investment and Branding in New South Africa." Journal of Brand Management (2003).
- How important do you think it is that the UK institutional investment community supports the agenda for corporate governance reforms?
I believe that both government and non-government organizations such as the UK Institutional Investment Community in this case play significant roles in empowering organizations, especially the ones that are still in the startup stage of their development, to participate in corporate governance reforms and various not-for-profit agendas such as corporate social responsibility programs. The idea of initiating corporate governance reforms do not always start internally or from the organization itself . There can be cases wherein those ideas and perhaps even other types of ideas that do not relate to corporate governance reforms are only derived from different groups in society such as the U.K. Institutional Investment Community in this case. The role that these organizations play lies more on the influencing part. By merely launching programs that aim to educate and increase the awareness of corporations (especially small-scale organizations) about the importance of good corporate governance, they can already help address the different problems that exist in our society. These organizations that they aim to educate, in the future, can reap financial benefits from the good corporate governance education they got from organizations such as the UK Institutional Investment Community. A corporation with full coffers is a generous corporation. That generosity can be channeled to the solving of the different social and or environmental problems of society. The role of organizations such as the U.K. Institutional Investors Community is to somehow create a cycle that ends up in a scenario wherein corporations end up more financially free and in a position that allows them to shift some of their focus towards corporate social responsibility, which may well be considered a part of good corporate governance .
Amaeshi, K., et al. "Corporate Social Responsibility in Nigeria." Business Source Complete (2006).
Crittenden, V., et al. "Market Oriented Sustainability: A Conceptual Framework of Propositions." Journal of the Academy of Marketing Science (2011): 71-85.