Taking CSR to the Next Level
From corporate giving to doing good as a core business strategy
By Jose L. Cuisia Jr.
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| Philamlife president Jose Cuisia participates in a community meeting in Bulalacao, Oriental Mindoro, where Philamlife partnered with Gawad Kalinga and local residents in a housing project for the area’s poor families |
Following are excerpts from a speech delivered by Philamlife president and CEO Jose L. Cuisia Jr. on 5 July 2006 during the Corporate Social Responsibility Expo 2006.
In a 2005 interview, CNN’s Christian Amanpour was asked whether she felt that the role of a journalist was merely to tell a story. Christian said that the politically correct answer would be that it is not a journalist’s role to be an advocate, to have an agenda, [or] to agitate on behalf of any political position. But she continued, saying, “. . . I can’t do that because it means being neutral in the face of unspeakable horror. When you’re neutral, you’re an accessory.”
In the Philippines, our people are confronted by so many hardships, and the challenges everywhere scream for attention. To be blind to the hardships, and to be deaf to the appeals for help is, in the words of Christiane Amanpour, to be neutral. And to be neutral is to be an accessory.
Well, the screams for help cannot be silenced, and I have no desire to be an accessory to so many people’s pain and heartache. This is why in 1997, as the president and CEO of Philamlife, I initiated the establishment of what is now known as the Philam Foundation. It started with a small idea that as the largest and most trusted insurer in the country, Philamlife had an obligation to do more than just share financially relevant and meaningful products and services for Filipinos.
I wanted to share the details of some of our projects, but I think I will use our time together wisely and focus instead on my vision to transform Philamlife into a true CSR company.
Levels of Involvement
Businesses today may find themselves in one of these levels of CSR involvement:
- Level 1 is resource transfer, where activities include corporate giving.
- Level 2 is community relations, where there is direct involvement in community based programs.
- Level 3 is CSR at the business practice level, where values are incorporated through a code of conduct and other performance measures.
- Level 4 involvement incorporates CSR as a core business strategy. This level is the most effective, where businesses develop products and
services that are solutions to public needs and problems.
The question for businesses today is how to make the transition from a Level 1 and 2 involvement to a level that merges social goals or values into the everyday business environment.
It seems nothing but common sense to merge company objectives with doing good. It is nothing more than realizing that our companies work in a market place but live in a society, and that in addition to minimizing the negative consequences of business activities to society, our companies must do more to solve the problems of the public. CSR involvement at Level 4 epitomizes the cutting edge of common sense. Businesses are supposed to bring market solutions to public needs and problems. Businesses are supposed to create meaningful products for people that also happen to provide solutions to the problems of society.
If CSR at its best is nothing but common sense, then why aren’t we seeing any more of it in today’s businesses? It’s simple. Businesses still believe that CSR is the wrong way to generate wealth and create profit.
But someone believes that it is the right way. C. K. Prahalad is a strategy guru and professor at the University of Michigan. Dr. Prahalad says, “I have nothing against corporate social responsibility. But unfortunately, that doesn’t get the attention of top management. When you turn these issues into a major piece of the business, it does get the attention, it does get the resources, and it does get the best people to work on it.”
It is clear that only when CSR is part of business strategy does it get all the resources it needs, and consequently, makes it effective. If I may quote Dr. Prahalad again, “When you have good times and profitable times, you can put money into corporate social responsibility, and then in bad times, you can cut it off. But if that is your business, if 60% of your business is selling shampoo to the bottom of the pyramid in India, what do you cut off?”
Of course, you don’t have to make shampoo and be a company like Unilever to make a difference by absorbing CSR values into business strategy. The financial services industry, to which Philamlife belongs can do the same thing. One example is for banks to deliver check-cashing services to the poor who don’t use bank accounts or ATMs because they are too expensive.
Developing a Social Conscience
Everyone knows that support at the top doesn’t ensure total support throughout the organization. The success of corporate social responsibility lies with the development of a socially responsible conscience, and no mandate or order can develop this overnight. I believe that the following action steps are essential to develop this:
First is to create awareness of principles and regulations that affect corporate behavior to ensure full understanding and total compliance.
Second is to review, enhance, and align company values. This involves asking difficult questions, such as, What kind of company do we want to be? What values will our organization champion? If our values are in order, we ask if the organization thinks and acts according to these values. The company will most likely introduce an evaluation and rewards program to incent good behavior and dissuade the bad.
The third step to develop a socially responsible business conscience is to align business processes, such as the budget exercise, training and development programs, product development, and other activities, to reflect the values chosen.
By changing the behavior of employees through rewards and punishment and institutionalizing widespread information and training campaigns, businesses create a change in employee mindset and culture. This is essential because culture determines which tasks get prioritized. If top management is able to communicate a compelling reason to adopt new values and to align its actions and strategies to social responsibility, then the change in culture has a greater chance of succeeding.
benefits of CSR
Even the most unemotional of employees cannot deny the benefits of CSR. CSR promotes practices that create financial, legal, and operational benefits, and help manage related risks. CSR policies promote cost savings from efficiencies that in turn promote profitability. In addition, companies that clearly demonstrate social responsibility create strong reputations and relationships with stakeholders that lead to the upgrading of its brand value. This also sends employees an important message: that the company’s interest in them goes beyond the bottom line. If the company cares enough about other people and the environment and creating sustainable living for the rest of the planet, it will no doubt care well for them. CSR therefore draws the best out of each employee while it helps attract and retain the best staff available.
Management must engage in discussion with the employee and other partners to get the message of CSR across and to align business practices to new corporate values. After this, it becomes natural for CSR to form part of the business’s core strategies. Here, businesses begin to look into the products and services it provides to see if it can enhance current solutions to a target market’s needs and problems. Companies begin to expand its definition of its target market and the people it serves. It also begins to expand its definition of other things—what kind of products and services are meaningful, what kind of business models are acceptable, what costs are now considered investments, what innovations are worth the risk.
At Level 4 involvement, it is as if the business has been freed of its prejudices and uses a new-found insight to view the myriad of opportunities only seen through CSR lenses. Companies begin to inject its psyche with strategic CSR intent and, in doing so, reflect the best of humanity—our desire to feel connected and to commit ourselves to action to bring about a better world. We will not need Christiane Amanpour to remind us that we are a generous and giving people who can cure the ills of society by doing good today.
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