‘Corporate Social Responsibility’ is one of those areas in business that gets a mixed reaction. To some hard-nosed business executives it is all fluff with no tangible bottom line benefit. As Milton Friedman put it in 1970: “The social responsibility of business is to increase its profits.”
To others, CSR is actually smart business and essential in an era of free-trade coffee and environmental and human rights concerns. Arguably, the test of the sustainability of CSR, will not be known until the next economic downturn arrives and companies start wondering if having a highly paid CSR team makes financial sense.
There is also a difficult balance to walk in CSR. For instance, if a bank is closing branches but supporting community development programs, to what degree is it simply a PR sham. Or, if a miner is providing jobs for an indigenous community but strip-mining the land, is it really a case of robbing Peter to pay Paul?
There is also a question mark over whether CSR is turning Australia’s top business executives into modern-day corporate Pontius Pilates, able to wash their hands of getting out their own chequebooks by highlighting that their company’s are out.
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Let’s face it, with some notable exceptions, the rich in Australia are cheap compared with their American peers when it comes to shelling out for good causes.
By good causes, I’m not talking about a new mahogany bar at a rugby club or saving some pooches at their local RSPCA. When I spent time in African AIDS clinics and orphanages last year, it highlighted to me what a good cause really is. There are plenty of opportunities for corporates to do good.
If Australian business executives are seriously committed to making a difference, then perhaps less use of shareholders funds to promote what great guys they are and more withdrawals from their own bank accounts are the order of the day. That is something of which Milton Friedman would have approved.