CSR vital to the future of business

Nov 26 2002 by Brian Amble Print This Article

Corporate Social Responsibility is vital to the future of business CBI President Sir John Egan has told the organisation’s annual conference in Manchester. “A socially responsible approach to business is not inconsistent with profitable business.” he said. “Good corporate behaviour is good for business. And what's good for business is good for Britain."

In a speech calling for a 21st century vision of business as both self-rewarding and socially vital, Sir John called on companies to change their attitudes to both the community as a whole and to their own employees.

“Repairing the reputation of business must become our over-riding cause, a prerequisite for achieving other goals," he said.

"Reputation matters. Reputation for reliable performance attracts investors. Reputation for fairness guarantees good industrial relations. Reputation for quality and value for money wins customers.

"Without public trust we'll be vulnerable to even more heavy-handed regulation, to even greater political interference and to even higher taxation," he warned

“I embrace the principles of corporate social responsibility because I've experienced their practical value. I've learned from experience that a stakeholder approach encourages loyalty from all the players who can influence a company's success,” he said.

He warned that the public are now more likely to believe pressure groups or the media than business and pointed out that large numbers of some of the UK’s brightest graduates now choose careers unrelated to business, trends that he wants to reverse.

”Without public trust…we'll find it difficult to get top quality young people - there's no point in the CBI campaigning for high quality education if the educated young turn their backs on business.”

The toughest challenge the UK faced is productivity, he said. And a “significant part of the answer” is in business trusting its employees and working together: “It’s when we motivate our employees to contribute their ideas and their experience as well as their energy that we perform at our best,” he said.

Sir John attributed much of the blame for the lack of public trust in business to recent financial scandals in the United States.

“It may be unfair that US problems have damaged business everywhere, but they have. We cherish our relationship with US business but we also want to urge upon them more effective corporate governance."

He said that business should make clear that the CBI expects executives to be open and transparent, non-executive directors to challenge and auditors to audit in the cause of the shareholder, not the management.

“I know from practical experience that corporate social responsibility and attention to the concerns of a company's stakeholders really works for the company as well as society. That's why this cannot be seen as a passing trend. Or a public relations gimmick. Least of all, yet another burden on business.

“The CSR movement is for us not a threat but an opportunity - it offers a course to follow that can help to establish a new relationship between business and society based on trust and shared values, leading to greater freedom for business and a more enlightened public attitude to profit.”