Finding the link to excellence

What’s the relationship between excellence in business and corporate social responsibility? This is the question I’m looking forward to exploring this week in Dalian, where the presence of so many corporate leaders from ‘emerging economies’ makes it a particularly compelling issue.  

Participants in the World Economic Forum include some of the world’s best-run companies, as well as some which are among the most socially active.  But those two designations don’t always overlap.

Corporate social responsibility as currently practiced by many companies is often a collection of (at best) semi-related activities rather than a coherent, outcome-oriented program.  Companies do not often measure their social responsibility in terms of its outcomes, preferring to let activities speak for themselves.  For example, companies often have substantial ‘social compliance’ programs to ensure that human rights are respected in the contracted factories and farms that make up their supply chains.

At the same time, they retain the typical way of sourcing which incentive procurement officers to demand ever-cheaper prices and ever-quicker turnaround times.  With such a contradictory structure, it is little wonder that progress towards ethical sourcing is halting at best.  On issues of gender equity, companies have a similar disconnect.  Many support schooling for underprivileged girls, for example, but don’t translate their concern into equitable hiring and promotion for women. As a result their overall impact is blunted. 

What would be different if the achievement of social impact was one criterion for being considered an excellent company? I think that businesses would contribute more effectively to social change if they applied to social responsibility the management frameworks that they use to solve business problems.   Companies obsessively measure the quality of their products. They can measure the proportion of workers in their supply chains whose income met legal standards.  Companies incentivize efficient sourcing.  They can incentivize gender equity.  Companies listen to customers.  They can listen to the voices of vulnerable people in their supply chains.  Companies focus resources on the most strategic interventions.  They can identify the most material social issues and act on them, rather than reacting to the topics their loudest critics force on them. 

The World Economic Forum offers an unusual opportunity to test questions like these.  All the right stakeholders will be here.  And the attitude of honest sharing and collaborative problem solving the Forum embraces is just what businesses need to adopt to find the link between excellence in all its manifestations.

Dan Viederman

 

Editors Note
Dan Viederman, Chief Executive Officer, Verité, USA; Social Entrepreneur of the Year, USA, 2011

Verité is a US-based NGO operating globally to help people worldwide work under safe, fair and legal conditions. Its programmes leverage the power of multinationals to deliver positive change for vulnerable factory and farm workers in company supply chains. The organization's partnerships with Fortune 500 companies, global NGOs, trade unions and governments reduce child labour and forced labour, eliminate unsafe working conditions, increase incomes for workers, and decrease inequality and discrimination.