This blog post was produced by Scott Schaffer, who is a professor of sociology and a specialist in social ethics. Having worked on problems ranging from the ethics of large-scale social change to cosmopolitanism and multiculturalism and the ethics of development, Scott now brings his fifteen years of expertise to bear on issues of social responsibility, social terrain mapping, CSR assessment, and stakeholder engagement. He holds firm to the idea that value for all stakeholders derives from starting from a values-driven organisational strategy.
Making the primary starting point of corporate policy development values instead of value, just like any other social actor or “citizen,” seems the most logical starting point for this rethinking of CSR.
At the Prospectors and Developers Association of Canada (PDAC) conference (which Michelle discussed in the preceding blog entry), I took a particular interest in the ways in which the mining industry has recently come to conceive of CSR. What I found got me thinking about a basic problem that crosses between my “day job” and my work here – namely, the problem of value.
As I sat in a workshop dedicated to the extraction of “corporate value” from social responsibility, I was puzzled. Everyone else in the room seemed to have a pretty good conception of “corporate value,” but not me. As I thought about it through the rest of PDAC 2013, a slew of definitions of value ran through my head: Marx’s tripartite notion of use-value, exchange value, and surplus value was the first, with the latter the clearest synonym for “corporate value” that I could discern; Georg Simmel’s concept of value being the common conception of the basis for a social relationship; Jean-Paul Sartre’s idea of le valeur, the characteristic that we imbue a thing, person, or relationship with in order to make it worthy of our efforts and action… The list could go on. Suffice it to say, I spent a great deal of time trying to figure out what made everyone nod their head when they heard “corporate value.”
It was only later that I realised that I was thinking about the problem backwards. In my day job, value – or rather, values – come first, and some kind of “valued result” comes about as a result of the action that one takes based on those values. At PDAC, though, “corporate value,” the valued result, was being privileged. And in that panel that got me thinking about the problem of value in the first place, where corporate value was something to be extracted from social responsibility projects, the issue for me was that the corporation was the Alpha and Omega of social responsibility; in other words, it begins with the corporation and ends with corporate value.
To my mind, there is an entirely different, and I think potentially more beneficial for all involved, model for thinking about CSR: to turn it completely on its head. If one begins with values, and follows the logic of social action mentioned above, then the valued results – the value will flow. The standard CSR model, which is generally based on the philanthropic model with an inflection of rational self-interest, is one that seeks value and identifies the values that will yield the result (profits, dividends for shareholders, relatively peaceful labour relations that do not get in the way of production). But this is also a model of the relationship between corporations and their local stakeholders (employees, local communities, governments) that has led to a great deal of mistrust on the part of local stakeholders, who know that the corporation’s “values” are really the search for “corporate value.”
Michael Porter’s recent efforts at formulating what he calls “shared value” face this same issue. In that model – which the most radical of companies we heard from at PDAC held to in the development of their CSR policy – the focus is on the identification of ways to deliver “profitable business strategies that deliver tangible social benefits.” What is this “shared value”? “[P]olicies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in which it operates.” As Porter and Kramer put it, “value is defined as benefits relative to costs, not just benefits alone.” This, though, maintains the primacy of the corporation’s definition of “value.” As the framework Porter, et al., develop for measuring shared value indicates, all of the business results are in many ways standard-issue business results that would be measured anyway: revenue, market share, productivity, logistical costs, supply security, etc. The social benefits, though, are much less measurable, and the pertinence of these benefits for local stakeholders is much less clearly constructed. They are also “social benefits” that are really corporate benefits – healthier employees, reductions in energy, water, and raw materials expenditures, improved job skills, and so on. Do communities share these values? Some of them, yes. Of course communities want to be healthier, better fed, better educated, and have higher incomes. Is this driven by the communities themselves? No. This model is yet another iteration of the development of the philanthropic CSR model.
This CSR model is falling, and I think must necessarily fall, out of favour with everyone – except, it seems, those who should most attuned to the damage to the social licence to operate that has been so damaged by past practices. Local communities and potential employees do not want a company who is only going to take what they want and then abandon them as the proverbial “mining town”; they want a partner who will help them develop themselves, in their vision and on their time scale. Current employees want a company that views them as partners in the productive process, not as expendable cogs in a machine. Customers prefer to purchase from companies that “stand for something” – even if their purchase is downstream from the companies that reflect values. Governments are increasingly turning to the Human Development Index as a guide for how they manage companies seeking to set up shop in their countries. And investors are increasingly paying attention to the social aspects of where their money goes – recent changes in the Jantzi Social Index and recent debates about ethical investment in light of the recent massacre in Newtown, Connecticut both indicate that the ethics of investment is increasingly becoming as an important a factor as productivity and profitability.
As these processes continue, as NGOs and civil society organisations draw attention to social responsibility issues around the world, and as ongoing global economic boom-and-bust cycles seem to be turning more to the bust side of the equation, it seems like an appropriate time for companies to begin thinking out of the box when it comes to their ethical responsibilities to the various stakeholders in their operations. Making the primary starting point of corporate policy development values instead of value, just like any other social actor or “citizen,” seems the most logical starting point for this rethinking of CSR.