CEOs buck law on CSR

EFFECTIVE corporate social responsibility programs must create a broader impact on the community, but laws must be in place to guide companies in the right direction, business heads and management experts said.

During the Asian Forum on Corporate Social Responsibility, Jaime Augusto Zobel de Ayala, Ayala Corp. chairman and chief executive, said the impact of CSR projects should be measured by their effects on the environment, society and the economy.

“We also have to [close the gap in trust] in the society. If not, the rise against capitalism will only intensify,” said Zobel de Ayala, referring to the Occupy Wall Street movement, a global protest against financial inequality and corporate greed.

While companies can help in terms of programs for the society, the government must provide the basic rules of the game to ensure order, safety and the smooth function of business, said Dato Timothy Ong, Asian Forum Inc. chairman.

“As to how businesses can help in that role, business should ensure they are governed well. In measuring their impact, they should have zero approach to corruption and they should govern themselves,” he said.

While advocating a CSR program is reflective of the commitment of a CEO, it is “very” vulnerable to turnover as well as mergers and acquisitions, said Catherine Coumans, research director of Mining Watch Canada.

Coumans added that existing CSR practices are usually weak on human rights and one of its “defect” is its failure to provide a means to provide access to sanction or remedy.

“Part of being a responsible business is obeying the law and by crafting sensible laws we nudge more
companies to behave responsibly,” said Prof. David Grayson, director of The Doughtry Centre for Corporate Responsibility, Cranfield School of Management.

Ramon del Rosario, Phinma Corp. president and chief executive, said CSR programs are best dictated by the corporate management and mandated CSR may also result in undue burden for companies, especially small and medium enterprises.

Regulating CSR may also stifle, rather than enhance, the development of the ever-evolving CSR.

“Any formula that pegs CSR involvement to a certain value or percentage of a company’s income or asset will be tantamount to a one-size-fits-all approach that is not suitable in an environment where capacity to do CSR and profitability and financial capability vary from industry to industry,” said del Rosario. –Krista Angela M. Montealegre, Reporter, Manila Times