The business case for CSR

Interesting post this week from Billy Shore (the most visionary non-profit person I’ve ever met), “Where the rubber meets the road: CSR and shareholder value.”

Billy raises a question, which in turn invokes the subject of his recently-published book, The Imaginations of Unreasonable Men:  Where there is no market, what is the responsibility of for-profit businesses in solving the world’s problems? And if businesses don’t have an obligation toward those solutions, who does?

My rent is paid by a publicly-traded company with a vast array of stakeholders, each having expectations of the company.  My job is to be a liaison between the company and many of those stakeholders, including those people who have dedicated their lives to fighting hunger. 

I’ve spent a lot of time thinking about the role of corporations in solving serious societal issues.  What’s expected; demanded; rewarded? 

Obviously, the “license to do business” doesn’t necessarily mandate a company’s deep involvement in social responsibility.  While Tyson Foods has a respectable philanthropy/CSR profile, we have some very successful competitors who give little or nothing back.  They’re not penalized for not being involved. They would maintain their contribution to society consists of providing jobs for people, economic opportunities for communities, and good products for their customers.  But I’m not really looking to debate that issue here.

I do believe there are rewards for companies that give back. There’s a business case for doing it. I do know from my own experience that once the business case is put forward, it’s much easier to get resources allocated (especially when profits are slim).   So the question I would have, in follow-up to Billy’s post would be: Should companies maximize that business case by looking for ways to give the best reward to their shareholders for CSR?  In the end, is that a detriment or a service toward building a better world?

4 Replies to “The business case for CSR”

  1. ed

    This entire discussion seems to me to have some short sighted considerations, there seems to be an assumption that profits and “solving the world’s problems” are somehow mutually exclusive. Yet I would bet everyone reading this has heard of the concept that “necessity is the mother of invention”.
    Solving the worlds problems are exactly how sustainable profit should be [and are] derived.

    • Ed Nicholson Post author

      I’m inclined to agree with you. However, there are some cases (the one Billy outlines in his book’s a great example) where seeing the potential market takes a big, big vision and a very long view. Not one that lends itself to fiscal year results. No doubt there will eventually be some healthy profits for those who discover a solution to malaria. But getting to one is requiring a very big dose of “venture capital” unaccompanied by the expectation of a quick ROI.

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  3. David Jones

    Ed,

    Thoughtful organizations give back to society because of their culture. Some of the top philanthropical groups date back to families that were very appreciative of their successes and showed that via their charitable gifting. Many of today’s larger corporations are the byproduct of decades of mergers & acquisitions that dimennish that core culture?

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