CSR: The wolf in sheep’s clothing

Journal of Public Affairs
J. Publ. Aff. 6: 283–285 (2006)
Published online in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/pa.233
Commentary
CSR: The wolf in sheep’s clothing
As 1850 approached Bradford, England, was beset by Chartist
agitation, riots and hunger. It was a filthy, satanic place, ravaged by
cholera. The second mayor of the town decided to remove his five
mills and bring them together in the sweeter air three miles up the
valley. He erected a global monument to corporate social
responsibility, as it would now be described, in the form of the
mills at Saltaire, now an award-winning cultural, commercial and hitech
manufacturing centre where the works of David Hockney are
hung.
But that was not all Sir Titus Salt did. Over the next 25 years he also
erected in imposing Yorkshire sandstone an entire community—823
houses plus shops, schools and Sunday schools, baths, washhouses,
almshouses, a club and institute, a Wesleyan chapel, a magnificent
Congregational church and a park. They remain testimony to the
moral as well as financial substance of a manwhois estimated to have
given away £100m in his lifetime.
He was not the first capitalist by any means to build model villages
in my native industrial West Riding of Yorkshire but the scale of his
social conscience was unsurpassed. Saltaire is a remarkable example
of doing right by people, as they put it where I come from. It is,
however, difficult to argue from this that doing good is good business
since his company survived him by only 16 years, though it might
have been much longer had his son, also Titus, not died young.
Fast forward now 150 years and what do we discover? Why an
entire industry called corporate social responsibility (CSR), complete
with its own branch of PR, constructed on the back of and exploiting
human decency. It makes me inwardly groan and outwardly puce.
It is not just that there is nothing new under the sun. The good
Samaritan was an early example of CSR. Nor can I deny that, if Salt did
not exactly go in for conspicuous personal consumption, he
certainly went in for conspicuous communal investment. His
corporate logo, had he had one, would have been on all his works.
Rather it is that there would have been no Saltaire but for the
genius of oneman—Salt—in experimentingwith thewools of various
sheep and, frankly, gambling on 300 bales of alpaca wool which he
took off the hands of a grateful Liverpool merchant. Alpaca and his
Copyright # 2006 John Wiley & Sons, Ltd. Journal of Public Affairs, August–November 2006
DOI 10.1002/pa
sound business sense created the legend. It did not exactly die with
him but all too soon the well dried up.
For me, Salt raises awkward questions about the nature of CSR and
where it begins and ends. Let us leave aside whether his brand of
paternalism was good or bad and whether he might not have paid his
workers better instead of stacking up riches beyond the dreams even
of Victorian avarice. Instead, let us not judge him by the mores of
another age, but offer him credit for giving singular practical
expression in his own day to his Christianity.
But where did his prime responsibility lie? Surely, it was to
conduct his business in such a way as to ensure its continuing
viability, capable of generating the profits to renew and develop
itself. Without that, all else would have crumbled—as indeed it did
when his heir died.
Of course, industrialists live in a competitive environment. They
can be beaten to the financial or technological punch and, in modern
times, can be taken over by new management. But CSR must be
meaningless in any day and age if the top man’s prime concern is not
with the continuing, long-term health of the enterprise .
On this basis, there is not a lot of CSR around these days when
companies are fattened up for market and traded like cattle or assets
stripped, pension funds compromised and workpeople cast out, sometimes
by means of an internet message. In these circumstances, CSR
becomes a cynical pretence. So, for me, good, sound management—
responsible governance—with a long-term perspective is where CSR
begins. The rest is fluff, though it can be immensely valuable fluff.
It follows that I accept companies are not solely responsible to
their shareholders and cannot operate in a vacuum. But just how far
does—and should—this CSR fluff go? This is where I start to worry
when my 11-year-old grandson’s village soccer team turns out in
sponsored kit with a logo emblazoned across his chest.
Throughout my life I have seen—and covered as a journalist—
companies and businessmen opening, for example extensions to
hospitals, universities and schools, endowing chairs at universities
and offering scholarships and prizes of one kind or another. Their
CSR, if that is what it was rather than simple generosity, was
invariably recognised by attaching their name to it. And long may this
continue, providing the donors can afford it.
An enormous amount of personal wealth has been put back into
the community in a huge variety of ways for very little return by way
of recognition whether it is endowed seats in memorial gardens or
the provision of a memorial garden itself. Britain would be a bare,
impoverished place but for the desire of its people with a little
money at their disposal to devote it to the public good .
Nor does it become me to criticise the company sponsoring my
grandson’s soccer team when, thanks to technology, its logo can be
stamped, melted or pressed on to his jersey. If the team wants to
show its gratitude in this way—for there can be little or no advantage
to the sponsor—why not?
Copyright # 2006 John Wiley & Sons, Ltd. Journal of Public Affairs, August–November 2006
DOI 10.1002/pa
284 Sir Bernard Ingham
But that is not what CSR is really about, is it? It has become an
industry in itself with several aspects to it. The most visible is top
level sponsorship in which commercial advantage is everything.
Movements in the sponsorship market are the subject of regular
commentary in newspaper business pages. It may be social
responsibility of the highest order to sponsor Chelsea, Liverpool or
Manchester United, but it is not entirely altruistic, is it? It is big bucks
with perceived big rewards; otherwise sponsors would be in short
supply.
Another side of the CSR coin is the expectations aroused in those
seeking sugar daddies. It has become as rampant as what is called
‘planning gain’ in the building sector. Here the developer is
effectively required to throw in something for the community—a
village hall will do nicely—in return for planning permission. Any old
company is now fair game for tapping in return for some often
meaningless recognition designed to make the donor feel good.
Let us not kid ourselves, CSR can be corrupting as well as elevating.
The moral blackmail inherent in it has created its own fashion—
for pious and self-congratulatory reporting in annual accounts that
never, to my knowledge, distinguish between commercial and
philanthropic activity or put a precise value or price on it. Before we
know where we are these sections of annual reports will have been
colonised by every politically correct movement from fair trade to
environmentalism.
This takes me back to the prime responsibility of managers to the
community: to ensure continuing viability by earning the profits
required for renewal and development. Good corporate citizens are
not made out of bust companies.
Over and above that there are enough opportunities for
corporations to demonstrate their good citizenship to strip Fort
Knoxof its gold. If they have resources to spare, they would better do
it quietly by seeking to remedy deficiencies in society by, for
example encouraging and helping employees to stand for local
council office, to enrich our impoverished political life and to
support hard pressed organisations looking after the deprived.
It is by no means obvious to me that the prime need in our society
is for more and more cash dripping from the corporate well; it is for
leadership and example. CSR, even in its purest form, tends to be
measured in the wrong currency.
Sir Bernard Ingham is Visiting Professor at Middlesex University
Business School. He became, after a long career as a journalist and
government PR executive, Chief Press Secretary to British Prime
Minister Margaret Thatcher between 1979 and 1990. He is a
newspaper columnist and a regular broadcaster on current affairs.
Sir Bernard Ingham
30th March, 2006
E-mail: bernardinghamcom@aol.com
Copyright # 2006 John Wiley & Sons, Ltd. Journal of Public Affairs, August–November 2006
DOI 10.1002/pa
Commentary 285