CEO EXECUTIVE SERIES!
27 APRIL 2012
CORPORATE SOCIAL RESPONSIBILITY MAGIC OR MYTH?
It was President John Kennedy who said, “A rising tide li!s a" boats.” but is Corporate Social Responsibility a" it’s cracked up to be? writes Darryl Judd, COO for Logistics Executive Group.
NEWS & EVENTS Upcoming Events 5th Global Logistics and SCM Summit on 30th May 2012 Attended by 250 plus professionals from 30 plus countries, the summit is an intense discussion on strategies for supply chain and logistics management and brings together many global thought and industry leaders. This is a must attend summit by all engaged in supply chain and logistics industry. Held in Dubai, UAE, May 30, 2012.
(click here to find out more) Global Logistics and Cargo Symposium 2012 - Malaysia The theme of the symposium “Economic Transformation, Leadership success and Integrity” and it highlights the challenges and opportunities for supply chain, stakeholders in the region as well as showcasing its homegrown best practices in supply chain and logistics management. Held in Kuala Lumper, Malaysia, June 27-28, 2012.
It has been bandied around as yet another corporate “feel good”
that is “trending” at the moment. Corporate Social Responsibility (CSR) is fast becoming an industry in itself, interspersed in corporate frameworks globally, and infused universally in standard business practices. Human Resources units are lavishing large budgets on CSR initiatives in the quest for their holy grail, which is envisioning an engaged employee workforce but does this work? Is CSR good for business on a wider framework? The Logistics Executive Employment Market Survey 2012 explored these questions and the perception of CSR in the market place. The survey found that whilst CSR was a focus for 74.2% of organizations, the respondents in leadership roles revealed that there were barriers to the wider adoption of CSR in the following areas: Cost, Unclear Benefits and lack of Senior Management Support. This suggests that there is still some confusion at executive level about the commercial benefits of CSR initiatives. Defenders claim that CSR increases the virtue of the company and employee brand. For example Human Resources professionals © 2012 LRS Group Pty. Ltd. All rights reserved!
(click here to find out more)
Logistics Executive Global News Logistics Executive’s LINKED IN Group hits 10,000 members Already with a candidate database of 80,000 plus Supply Chain and Logistics professionals globally, L o g i s t i c s E x e c u t i v e ’s i n d u s t r y networking group on LINKED IN recorded a key milestone in April by becoming one of the few specialist groups to exceed 10,000 members. The Logistics Executive LinkedIn Group is quickly becoming the hub for global supply chain and logistics experts and is free to join.
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CEO EXECUTIVE SERIES! argue that CSR enhances employee engagement and the employee brand. It therefore increases employee retention and enhances talent acquisition strategies. The counter argument however is that most companies have yet to put clear measures in place that can articulate these benefits and the link to CSR. The reality is that shareholders a r e m o r e l i ke l y t o l e a n o n executives to deliver clear metrics relating to profits rather than these soft targets. The truth is that without hard metrics, CSR becomes largely ineffective. According to political scientist Brendan Nyan, it could be argue that CSR is an easil y manipulated medium. “Much of what passes for CSR is just stroking the egos of senior m a n a g e m e n t . Ha v i n g t h e corporation make contributions to causes fa vored by senior management is, from their point of view, the best kind of charity, because they get to spend other people's money rather than their own. (They still get all the glory, of course, at those nice Man of the Year dinners and at the country club bar.) That's not in the interest of the corporation, it's just a form of non-monetary
27 APRIL 2012 compensation. And doing it is a breach of their fiduciary duty to shareholders, ever y bit as objectionable as using the corporate jet for their own pleasure trips”. Of course there is the risk or some more cynically would say scandal avoidance - side of CSR. Consumer activists have used their new-found media clout to bully corporates into action against social injustice. Business leaders have become painfully aware that consumers don’t just buy goods these days. No, these days they like to “interact” with their favorite brands. They are educated, market sa vvy and demanding. They belong to a modern global workforce that has toppled governments with Facebook during the spring uprisings and brought major Corporates shamed over poor business practices. The only way forward for CSR it would seem is through a better understanding of this concept. Companies need to carefully prepare the way before implementing their CSR programs. Executive decision m a ke r s n e e d t o b e b e t t e r educated on what a true CSR program involves. Employee involvement needs to be a driver
Above: Findings #om Logistics Executive’s 2011-2012 Global Employment Market Report
© 2012 LRS Group Pty. Ltd. All rights reserved!
of the concept from the outset and companies acting as the enablers. Clearly defined processes and transparent metrics put in place. The concept of “social accounting/ auditing” practices need to be implemented so that CSR responsibilities can be linked to outcomes in meeting the agendas of their corporate and community s t a ke h o l d e r s . Transparency, accountability and ownership by all stakeholders are the underlying principles here and the key to success. It isn’t surprising therefore that Executives are a bit resistance to embark on a CSR program considering that they invest their company profits on a process that they have little control over – as this is largely handed over to their staff – and are often being dictated to on who and how they can do business by consumer activists. It is therefore worth asking, what can CSR offer if it is done well? Wejuan Yao, Director for China of Verite last year at the Supply CHIaNA 2011 Business Summit in Shanghai gave an impassioned presentation on “Trends in China Labor Relations and the Implications on Supply Chain CSR Issues”. Wenjuan is an example of modern China. She personifies in many ways the human challenges faced by a workforce in an emerging e c o n o m y. He r r e c e n t assignments have seen her consulting to foreign company’s who are trying to m a n a g e t h e i r co r p o r a te image by ensuring the labor conditions of their Chinese suppliers meet requirements. Workers’ conditions are highly topical all over the world and have become a subject of open debate, even in China. Wenjuan provided a new perspective and a voice to what was already a
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CEO EXECUTIVE SERIES!
27 APRIL 2012
ner vous murmur at the Conference from many large corporates in attendance. That is, the dramatic improvements in the Chinese economy that have led to the emergence of a new kind of Chinese worker who is educated and a lot more aware and demanding than previously. This is an issue about dealing with change more than anything. In Wenjung’s words “China’s e co n o m y, t h e i n te r n a t i o n a l community, as well as all factories have been benefiting from the unlimited and well-disciplined cheap labor supplies in China over the past 30 year and we are now facing the turning point. When the tide goes down, the competition for sur vival will become fierce. Meeting CSR requirements may – finally -become a real competitive advantage for them in the near future.” In this ca se, Wenjung is acting as the conduit, she is using CSR policy to build a bridge, which is creating a new era in China’s economic history by and bringing cohesion through a process of radical change in employment conditions. Of course we don’t all belong to large corporate entities. Successfully implemented CSR can also be found in smaller entities that have the advantage of easier to
access staff and more egalitarian teams. “There are some basic commonsense r ules that can be applied to al l companies f rom small to large who wish to ensure their CSR meets the rigors and changing demands of t h e m a r ke t p l a c e ” according to Kim Wi n t e r, C E O o f Logistics Executive. Of course Kim would know all about this subject as he is not only the founder of Logistics Executive but also the co-founder and Making New Friends. Sponsor Kim Andrews visits Oasis Africa in Kibera CEO of Oasis Africa, a leading charity organization which prevent the company from supports the orphaned children making errors of judgment in of the Kibera slums in Africa. At their suppl y chain that will Logistics Executive there is a expose them to undue risk. strong voluntary involvement by These risks may include sourcing staff. “Often it’s the giving facet from disreputable suppliers who of the CSR experience that is the employing workers under poor most personally rewarding,” says conditions or who are not using Kim. “It can act as a culturally environmentally sound practices. defining facet for your staff. It This is part of the corporate risk gives all of us a sense of purpose management strategy, a defensive and great pride to tell our story,” a p p r o a c h t o p r o t e c t t h e he continues. The extent of company’s reputation. Logistics E x e c u t i v e ’s 2.Employer and Corporate commitment to Oasis Africa also Brand enhancer - An active acts as a brand differentiator with community initiative that is charity fundraising initiatives and based on philanthropy and aligns events offering with the corporate brand. This a fun and p r o m o t e s t h e c u s t o m e r ’s rewarding part experience of your brand and ties of their client in with their values but it is only experience. effective if employees drive it. In simple terms We n j u a n b r o u g h t i t a l l if Corporate together for ever yone in her Responsibility presentation, by quoting is implemented President John Kennedy who effectively it said, “A rising tide lifts all boats.” acts as a This resonates more than ever b u s i n e s s today as global market growth enabler that a n d n e w te c h n o l o g i e s ke e p can serve two proving that we are all in this main purposes: together. 1.R i s k Above: New Zealand artist Gabrie"e Pool paints a co"ection A v o i d a n c e to be later auctioned at a fundraiser for Oasis Africa s t r a te g y - To
© 2012 LRS Group Pty. Ltd. All rights reserved!
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CEO EXECUTIVE SERIES!
27 APRIL 2012
Logistics Executive www.logisticsexecutive.com
Oasis Africa Australia www.oasisafrica.net is a not for profit Australia Government registered and audited humanitarian organization established in 2005 to support a small group of homeless orphaned children found in East Africa’s largest slum, Kibera, located in Nairobi Kenya. Kibera slum is home to over 1,000,000 people with 50,000 orphans and vulnerable children, has little or no infrastructure, electricity, running water or sewerage facilities, security is poor with no formal policing, government hospitals or clinics, disease is rampant with prevalence of AIDS being more than double the already high average for Sub Saharan Africa. Oasis Africa was originally initiated to provide schooling access to 50 children and currently provides ongoing education (primary and secondary), education, food and security to over 1000 young people based on the premise that education offers a genuine road to freedom from poverty.
What are we doing about it? Logistics Executive’s involvement in this project is aligned to its corporate social responsibility mandate and since this time it has maintained sustainable engagement through fundraising events involving many international supply chain and logistics partners that share similar CSR values. The project continues to build a self-help model where the local community takes increasing responsibility for the end to end supply chain upon which the school operates. Oasis Africa Australia’s low cost operating model is based on a platform of skilled logistics and supply chain industry volunteers contributing time to run the organization efficiently and engage with industry partners who engage in fundraising events and onsite project development and initiation activity in Kibera. Well-planned, high activity and output supporter trips are made to Kenya annually in coordination with resource requirement and deployment plans generated by the local community. © 2012 LRS Group Pty. Ltd. All rights reserved!
Australia Sydney Phone: +61 2 8262 9800 Melbourne Phone: +61 3 9863 9488 Asia Shanghai Phone: +86 21 6427 6697 Singapore Phone: +65 6818 9745 Hong Kong Phone +852 3125 7654 India Phone +91 22 4090 7053 Middle East United Arab Emirates - Dubai Phone: +971 4 361 6275 New Zealand Wellington Phone: +64 4 496 6730
For a copy of the 2012 Logistics Executive Global Employment Report email: darrylj@logisticsexecutive.com or kimw@logisticsexecutive.com
Darryl Judd Chief Operating Officer Logistics Executive Group With more than 20 years of executive experience in Aviation, Supply Chain and Logistics Transport Industry, Darryl has held executive positions within the airline & aircraft leasing/charter industry and major logistics organizations. He is regularly called upon to manage key human resources consulting projects and supporting business to drive changes, particularly around M&A activity and international executive management.
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