CSR: Mixing money and morals

Chen Guangbiao is in a generous mood. So generous, in fact, that the Chinese tycoon (assets: $735 million) seems to have infected other millionaire industrialists with the charity bug. Chen says 100 of them have agreed to bequeath their wealth to charity upon their demise.

Just the thing that billionaire buddies Bill Gates and Warren Buffett want to hear. The two richest Americans are hosting a dinner for Chinese philanthropists in Beijing on September 29 to spread their message and urge the hyper-rich to donate half their assets to good causes, as the pair had done years ago.

Well and good: may their tribe increase and include some of the people reading this column. But one thought gives pause: How many mega-millionaires fund laudable endeavors and endow charities and foundations after decades of less-than-pristine moneymaking? Does charity at death offset a lifetime of pollution, corruption, tax evasion, exploitation, manipulation and other social poisons?

The question recalls this writer’s remark at a dinner in Oxford’s New College for our class of 49 business people taking the university’s strategy and innovation course. Philosophy professor John Lennox had just expounded on morals for business, augmenting an earlier lecture at the Said Business School on firms going beyond the bounds of profitability and legality toward corporate social responsibility (CSR).

After thanking Prof. Lennox, this writer noted that morality is not something to be merely added on to a business after taking care of profits and legal obligations. CSR should not be just one more function of corporate activity, along with finance, production, marketing and PR, R&D, etc.

Instead, goodness, justice and progress should be the foundation and prime motivation of any enterprise, its be-all and end-all. Even profitability is part of value creation, which is the main contribution of business to society. An enterprise must make money to ensure that it conserves resources, provides needed goods or services and creates high-quality, sustainable jobs.

In sum, doing good should be the be-all and end-all of all human activity, businesses included. An enterprise is set up do to good things, which include generating value and honest profits. Prof. Lennox expressed thanks for the intervention and said it was a excellent point on which to end the evening.

So charity, CSR and other acts of goodness should not be done only after profitability is achieved by hook or by crook, or once the owner is nearing his own end and has no further personal use for his burgeoning wealth, having set up nest eggs for his family. Rather, goodness, morality and progress should be on the business agenda from day one.

In fact, good work is necessarily part of any enterprise, since it must serve some social need for it to make money. In starting any business, to quote the legendary American oil magnate John Paul Getty, we must “find a need and fill it.” As long as the need is not a pernicious one, like illicit drugs, gambling or sex, then providing for it in a profitable way is doing good. So is creating jobs with decent pay and work conditions.

So a profitable, well-run and law-abiding enterprise is doing good even without donating to charity or having a formal corporate social responsibility program. Giving employees their due under the law, ensuring safe working conditions, paying the correct taxes, repairing any environmental damage because of business operations—all these are part of CSR even without that label.

Sadly, many tycoons and firms violate rights, laws and nature, and try to make up for their sins by generous donations. No amount of charity work can justify cheating workers, evading taxes, corrupting officials and polluting the earth. Stop such criminal acts before doing other kinds of CSR.

In sum, a responsible, upright enterprise not only aims to do good, but also avoids causing harm and repairs any ill it may have done. It must make sure to fulfill those basic duties even as it undertakes other good works.

Ideally, a company does not separate external CSR with the internal kind directly related to its business. Indeed, a firm can also plug CSR right into its operations. San Miguel Properties has partnered with Couples for Christ to provide housing for the poor, with the sale of each house or apartment funding one low-cost dwelling. CFC will also undertake Christian living programs in San Miguel’s new communities.

The Yupangco group, which markets Yamaha music equipment, is providing loudspeaker systems to churches. It will be working with the Bahay ng Diyos Foundation, which repairs houses of worship to bring clearer homilies and better-sounding mass hymns to more congregations nationwide.

The Philippine Business for Social Progress (PBSP) harnesses funds from some 400 corporations for countless projects nationwide, including its very successful microcredit and countryside enterprise programs. Many companies also use their ample resources for livelihood and community projects. Bridge builder Winace Holdings, a consultancy client of this writer, set up Kasangga to fund and support street entrepreneurs.

For Ayala Corporation, serving nation and nature is not just an adjunct to its business activities, but the very standard by which they will be measured. Its annual report presents not only profitability but also sustainability. Activities, investments and initiatives of the conglomerate are evaluated based not only on the corporate bottom line, but also the advancement of the country and the planet.

If more companies enthroned CSR at the heart and soul of their businesses, making sure to do good and avoid ill in everything they do, then there would be no need for dinners enticing tycoons to bankroll good causes or urging business people to inject morality in their profitability. And the money lenders would be welcome at the temple. –Ricardo Saludo, Manila Times

Ricardo Saludo heads the Center for Strategy, Enterprise & Intelligence ( rs@censei.co This e-mail address is being protected from spambots. You need JavaScript enabled to view it ), which packages corporate social responsibility projects and advises businesses on building CSR into their core activities.

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