There are lots of things government can do to encourage corporate
social responsibility without resort to regulation, says David Grayson
The underlying drivers for corporate social responsibility are market
forces: vigilant consumers, institutional investors concerned with
reducing risk, and talented employees. I am, therefore, cautious about
how far policymakers can encourage a company to become more socially
responsible, as opposed to their negative power to discourage it.
As an important stakeholder for business and an important voice in
society, it is good that government is encouraging CSR – politicians
possess what the Americans call the ‘bully pulpit’, which can be used
to great effect in this area. Personally, though, I would prefer
government to name and fame rather than name and shame. Responsible
businesses should be highlighted in ministerial speeches and given
priority when society honours business.
Governments should
also ease regulatory burdens on businesses that can demonstrate their
environmental and social responsibility – as is now beginning to happen
in the United States.
Where governments might particularly
help is in developing the capacity of small business organizations to
help their members understand the business case and how to become more
socially responsible.
Government can also make a
difference by being more open to engagement with business. It can
develop a public-private-community partnership ethos that blends the
best of the public service ethos, the entrepreneurial, problem-solving
culture of business, and the best of community empowerment. But it is
not enough just to develop such an ethos – it then has to be
aggressively promoted and rewarded within the civil service.
Furthermore, there is an opportunity for creative new intersectoral
compacts at the level of international development – for example, more
CSR and more active, generous public support from the North and the
West for development in, say, Africa.
On the other hand,
there must be greater freedom for community-based organizations and
non-governmental organizations, and better governance – including a
willingness to improve public governance by learning from the private
and voluntary sectors. Travelling in Africa and India this year, I have
heard committed business leaders complain of rebuffs from politicians
whom they offered to help improve public governance.
These
are harder things for politicians to do – but if they are serious about
getting the best out of corporate social responsibility, then this kind
of agenda will have more enduring positive outcomes than a simple
resort to regulation that requires companies to measure and report on
CSR at a time when reporting is still in its infancy.
