There are good business reasons why companies should work on improving their social performance.
In June 1769 the potter Josiah Wedgewood opened a new factory, which he called Etruria, near Stoke-on-Trent. Mr Wedgewood’s enterprise brought together the latest technology, classical cultural ideas and a radical view of social responsibility towards his workforce: alongside the factory, he built a village where his workers could live in decent conditions. More than a century later, George Cadbury developed social housing for his chocolate factory workers and their families in the village of Bourneville.
Both men believed that the provision of social welfare was good not only for the workforce and the community, but ultimately good for business.
In the modern age, the principle is based not on paternalism, but on partnership and responsibility. It is not simply a question of looking after our own employees, but about managing the effects of our business on the communities and societies in which we operate. And a fundamental element of sustainable development is to manage them both in the immediate and the longer term.
While many of those impacts are positive, there are potential negatives, especially at the local level where communities can be directly affected by our operations. So it is important to get it right.
Meeting the needs and demands of all our stakeholders can be tricky in a climate where society’s expectations of where corporate responsibility begins and ends are constantly evolving. Add to this the fact that all communities are essentially unique. There is, however, one principle that holds true in all cases and which guides our approach: that being a good neighbour is good for business.
So, how to be a good neighbour? If we think of neighbouring communities in the same way we think of our domestic neighbours, then a rational approach emerges. You would not presume to paint your neighbour’s front door blue as a gesture of friendship while he was out at work. And equally, you might ask your neighbour what colour to paint your own front door before making your final choice.
This exercise in door painting exemplifies the best approach. First, finding out what neighbours think and want before presuming to act in their best interests. Second, listening to what they think about how we run our business and factoring that into our decisions. To put it simply: listen and respond.
We have learnt from experience that this rule translates into better business decisions and better project design.
Creating economic opportunity for the local population and, at the same time, providing a trained workforce for company operations aligns both interests. It is a 21st century partnership, rather than the paternalism of the industrial age. But initiatives do not have to be on a large scale to be of value. Face to face meetings, dialogue and providing clearer information formally and informally works well and reduces costs
Getting it right is not always straightforward and sometimes seems impossible. And those cases where industry has not got it right have been well documented. But acting out of mutual self-interest can deliver real value to companies as well as to communities–reducing costs, increasing operational efficiency and reducing wear and tear on corporate reputation.
Creating a workforce that mirrors the communities in which companies operate helps to better understand and build relationships within the communities, reducing the negative and optimising the positive economic and social impact of the company’s presence.
The whole tenor of the recent debate around corporate social responsibility has been focused on the obligations and responsibilities of companies, which is how it should be in a world where commercial enterprise has such significant effects on communities. But there is another conversation to be had, which I think for many companies will ultimately prove more persuasive. And that is that being a good neighbour is good for business.