Socially responsible business people now talk of a Balance Sheet which shows how their Company performs with regard to people, planet and profit. This is usually known as 3BL (Triple Bottom Line) accounting, but the question needs to be asked whether this is an equal balance where people and the planet are of as much importance as profit. This article sets out to question some of the assumptions behind the current discussions in Bangladesh about implementing CSR.
It appears that in some sectors of Bangladesh CSR is only a marketing strategy - short term environmental 'clean up' projects or company products donated to community projects by the Company's PR Department. Sometimes it is limited to the photographing and reporting of the presentation of a cheque or is only keeping rules imposed by others - the social compliance intended to enable the business to earn cash from foreign investors.
CSR however requires a full commitment to human rights and the protection of our own environment - now particularly important in order that Bangladesh should be ready to adapt for the effects of climate change. On occasion it seems that our business people are driven only by the profit motive and a desire to become personally wealthier. CSR however needs to begin with people who have an inclination towards altruism or who desire to put their faith into action - this might be an enlightened self interest but it certainly goes beyond the primary motivation to accumulate personal wealth.
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Personal values lead to personal motivation, leading to commitment and practical action. This is something for all sectors of society not just the corporate sector. The practical action coming out of personal beliefs requires more than a donation of a small proportion of the company's profits or a small amount of personal wealth. The commitment to practical action needs to be by Government both Law Makers and Bureaucrats - and it needs practical action by the business community from the small street workshop to the largest international Corporate. Commitment to act is also with NGO's in their service delivery and in their lobbying. Social Responsibility is for Trade Unions and Staff Associations and in fact is a responsibility for all citizens. This 'macro level CSR' has wide ranging effects.
This social responsibility at the broadest level is more than simply encouraging companies to donate cash to good causes in the community. It involves:
l Improvements to the environment e.g. protecting or recovering river banks from encroachment
l Preventing and then cleaning up river pollution
l Removing air pollution caused by factory production processes and vehicle exhaust fumes - removing both congestion and pollution
l Removing noise pollution as well as dust and fumes and smoke
l Protecting the land from unauthorised and unregulated dumping of hazardous and other waste material
l Going beyond minimal protection of the people living around factories
l Paying workers a wage on which they can live and provide their families with sufficient food and appropriate health care - a full commitment to Human Rights in Bangladesh.
l Companies and individuals paying rather than avoiding tax in order that the Government will have money for infrastructure including hospitals, education facilities, roads, bridges, railways and power generation.
l Willingness to comply with international norms and international standards for labour, safety and environment.
Social Responsibility principles:
l Accountability - A factory should put right anything that it has done wrong regarding the society and environment and take action to prevent these things from being repeated.
l Transparency - Decisions and activities that have an effect on the community and the environment are made clear and accurate and available to all interested stakeholders
l Ethical behaviour - A factory should operate in a way that is honest including developing good governance structures. Taxes should be paid, bribes should not be paid and regular communication should take place with stakeholders.
l Respect for stakeholder interests - Good communication should take place with buyers, suppliers and representatives of the local community. A regular stakeholders meeting allows different organisations to engage and influence the factory.
l Respect for the law - By following international Norms and Declarations and the Environmental Regulations and other Bangladesh Government Laws and Labour Regulations and doing more than simply abiding by the Rules and Regulations.
l Respect for international norms of behaviour and standards and not just those compliance requirements laid down by buyers and suppliers for example the UN and ILO Norms and Conventions.
l Respect for human rights - Freedom of Association and free collective bargaining should be recognised. Prohibition of forced labour, equal opportunities and non-discrimination and no employment of child labour are some of the ways in which respect for human rights can be demonstrated.
Seven Core Subjects of ISO 26000 the international guidance for Social Responsibility that is expected to be issued in 2010:
Organisational Governance is part of the way in which a factory makes and implements decisions. The decision making process will vary depending on the size and type of the factory. These 'processes' are managed by a person or a group of persons who have authority and responsibility to make sure the activities and targets of the company are achieved.
Human Rights includes many aspects and those listed below are given emphasis in ISO 26000
l Freedom of association and effective recognition of the right to collective bargaining
l The elimination of all forms of forced or compulsory labour
l The effective abolition of child labour
l The elimination of discrimination of employment and bargaining
Labour Practices includes staff recruitment and promotion, termination of employment and training. Occupational health and safety and working hours and pay are also included.
The Environment includes the improvement of a factory's environmental performance by preventing pollution to air, water and land including the careful use and disposal of toxic and hazardous chemicals.
Fair Operating Practices covers relationships between factories and their suppliers and contractors and the various associations of which they are members. This includes ethical conduct in a factory's dealings with other businesses and Government agencies.
Consumer Issues includes the provision of accurate information, using fair and transparent contractual processes. Factories that collect or handle information should protect the security of the information and the privacy of their customers. When producing goods risks from the use of those goods should be reduced.
Community Involvement and Development is aimed at preventing and solving problems and communicating to the community in a positive way. Improved profit and health and education for the local community can be benefits for the factory and the local community.
Integrating Social Responsibility into a company
All these core subjects are relevant for each factory but not all the issues may be relevant for each factory. The degree of relevance of the core subjects and associated issues depends on the nature, size and location of the organisation. Many factories can build on existing systems, policies, structures and networks to put social responsibility into practice. Once a business has identified the broad range of issues relevant to its factory environment it should look carefully at the issues identified and decide which core subjects and issues have the greatest relevance and are most important to the business.
Some suggestions for the development of CSR in Bangladesh
A national standard for social responsibility could be devised which might be a 'Bangladesh SR 26000' based from the guidance provided by ISO26000 which will be international guidance for social responsibility in 2010. A unified standard for social compliance would avoid much of the present duplication of effort in standard setting and inspection by buyers and manufacturers (similar to the International Labour Organisation ILO led social compliance project in the Cambodian garments sector) and in Bangladesh not simply for the textile sector. The Government of Bangladesh and a specific Ministry needs to take the lead in developing and implementing a national standard for social responsibility and in devising a unified standard for social compliance and perhaps this could be by the Bangladesh Standards and Testing Institution (BSTI) working on behalf of the Ministry of Industries. The Government of Bangladesh could lead by example and demonstrate its commitment to be socially responsible by ensuring all the State Owned Industries SOEs show good labour practice e.g. in democratic union activity and in environmental protection by making sure all these factories have effluent treatment plants and measures to prevent air pollution from factory chimneys and exhausts.
A Senior Columnist and a regular contributor to The Executive Times Rodney J Reed M.Soc.Sc (Birmingham) is the Company Chairman and MD of Reed Consulting (BD) Ltd. The author and his wife Mrs Ann Reed, who is the Development Director of the Company, are residents of Dhaka. Reed Consulting Bangladesh Ltd www.reedconsultingbd.com is Incorporated in Bangladesh. Rodney Reed is a Member of the DCCI 2009-2010 CSR and Social Compliance Standing Committee and the FICCI CSR Sub Committee. Reed Consulting (BD) Ltd is a Strategic Partner of CSR Asia and specialises in developing the policy and practice of Social Responsibility in Bangladesh and in neighbouring countries. The Reed Consulting (BD) Ltd 'mission statement' is 'Enabling businesses in Bangladesh to be socially responsible sustainable and profitable'.
l The elimination of all forms of forced or compulsory labour
l The effective abolition of child labour
l The elimination of discrimination of employment and bargaining
Labour Practices includes staff recruitment and promotion, termination of employment and training. Occupational health and safety and working hours and pay are also included.
The Environment includes the improvement of a factory's environmental performance by preventing pollution to air, water and land including the careful use and disposal of toxic and hazardous chemicals.
Fair Operating Practices covers relationships between factories and their suppliers and contractors and the various associations of which they are members. This includes ethical conduct in a factory's dealings with other businesses and Government agencies.
Consumer Issues includes the provision of accurate information, using fair and transparent contractual processes. Factories that collect or handle information should protect the security of the information and the privacy of their customers. When producing goods risks from the use of those goods should be reduced.
Community Involvement and Development is aimed at preventing and solving problems and communicating to the community in a positive way. Improved profit and health and education for the local community can be benefits for the factory and the local community.
Integrating Social Responsibility into a company
All these core subjects are relevant for each factory but not all the issues may be relevant for each factory. The degree of relevance of the core subjects and associated issues depends on the nature, size and location of the organisation. Many factories can build on existing systems, policies, structures and networks to put social responsibility into practice. Once a business has identified the broad range of issues relevant to its factory environment it should look carefully at the issues identified and decide which core subjects and issues have the greatest relevance and are most important to the business.
Some suggestions for the development of CSR in Bangladesh
A national standard for social responsibility could be devised which might be a 'Bangladesh SR 26000' based from the guidance provided by ISO26000 which will be international guidance for social responsibility in 2010. A unified standard for social compliance would avoid much of the present duplication of effort in standard setting and inspection by buyers and manufacturers (similar to the International Labour Organisation ILO led social compliance project in the Cambodian garments sector) and in Bangladesh not simply for the textile sector. The Government of Bangladesh and a specific Ministry needs to take the lead in developing and implementing a national standard for social responsibility and in devising a unified standard for social compliance and perhaps this could be by the Bangladesh Standards and Testing Institution (BSTI) working on behalf of the Ministry of Industries. The Government of Bangladesh could lead by example and demonstrate its commitment to be socially responsible by ensuring all the State Owned Industries SOEs show good labour practice e.g. in democratic union activity and in environmental protection by making sure all these factories have effluent treatment plants and measures to prevent air pollution from factory chimneys and exhausts.
A Senior Columnist and a regular contributor to The Executive Times Rodney J Reed M.Soc.Sc (Birmingham) is the Company Chairman and MD of Reed Consulting (BD) Ltd. The author and his wife Mrs Ann Reed, who is the Development Director of the Company, are residents of Dhaka. Reed Consulting Bangladesh Ltd www.reedconsultingbd.com is Incorporated in Bangladesh. Rodney Reed is a Member of the DCCI 2009-2010 CSR and Social Compliance Standing Committee and the FICCI CSR Sub Committee. Reed Consulting (BD) Ltd is a Strategic Partner of CSR Asia and specialises in developing the policy and practice of Social Responsibility in Bangladesh and in neighbouring countries. The Reed Consulting (BD) Ltd 'mission statement' is 'Enabling businesses in Bangladesh to be socially responsible sustainable and profitable'.
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The global downturn has forced most organizations to downsize leading to the management taking a tough stand on the job tasks of each surviving employee. HR supervisors employ different strategies to ease the effects of the layoff on the redundant/laid off employees but do not fully adjudge its effect on the 'survivors' - the ones who have not been laid off. It is a modern day malady that almost all organizations face but have not yet fully acknowledged.
When colleagues get sacked because of downsizing and workforce reductions, the 'survivors' often suffer from a lack of motivation, engagement and productivity, a syndrome which can have serious implications for a company's operations and ultimately its productivity. The most common perception that employees gather after workforce reductions is that workloads on the existing workers will increase and they must do more with less. Their loyalty to the company gets shaken and rumours spread faster where employees wonder 'Am I next?' to get fired. At this stage, management needs to re-engage 'survivors' with the company. Management needs to implement strategies that will target their low morale, reduced commitment and lack of loyalty and trust, thus working towards remaining competitive today and leading through the economic upturn.
Possible strategies that the management can proactively implement to combat the survivor syndrome are as follows:
First and foremost, it has to enact a well-developed crisis communication plan. Secondly, management needs to look into increasing the extrinsic rewards (social acceptance, increased self-esteem, self-realization) from their job. Begin with an open dialogue with the employees, recognising and appreciating their efforts to work in teams and achieving high performance and addressing the fear and pressure they feel while working. Bring the necessary improvements in company policies and culture. Make necessary design changes to the job by improving the variety, challenges and the strategic impact it has on the company, balancing the work/life flexibility for each employee's job. At the same time employees need to realize that they can be laid off if their position is considered less strategic to the company. Internal communications such as blogs, staff meetings and brown bag lunches can be used. Opportunities for additional training and/or professional qualifications for staff development can be provided to help change jobs or help in career progression.
In short, management needs to take steps that are well-communicated, transparent and trustworthy for the survivor to perceive the downsizing as fair and strategic, rather than as an impulsive act of the management.
While working for Gemcon Group as their Marketing Manager for Meena Bazar, we in the management team, had to take a sad but tough decision on how to manage 100 retail employees currently under employment while several of our retail outlets closed during the tenure of the caretaker government in 2007. There was rumour around that everyone would lose their jobs and the once thriving institution Meena Bazar would close down all together. The way that we, the management, dealt with it was looking into each employee on a case by case basis, and establishing each person's strategic role in the future of the company. Few had to be given the golden handshake while 90% of the employees were given new designations and promotions and all of them sent off to training, while new outlets were being built. The whole management team along with the CEO had constant interactions with the employees during these difficult times to ensure there was trust and good feelings on both sides. Out of the whole exercise, the most effective take-out had been that employees now had greater confidence in their role in the company and were focused on constantly developing and placing themselves in strategic positions.
Sonia Shahid works for Orange Phones and is based in UK.
