Available
evidence from both developed and emerging economies indicates an
increase in corporate support for community involvement from employees.
Although there is as yet little conclusive indication of the reasons for
this, factors such as worsening economic circumstances because of the
international financial crisis have been cited.
An associated factor is the global demand for more ethical and accountable business practices, enshrined in such initiatives as the United Nations Global Compact, the Global Reporting Initiative and, in South Africa, the third King Report on Corporate Governance (King III) and the Social Responsibility Index of the JSE.
Corporations
are under unpre-cedented public scrutiny as a result of recent exposure
of corporate greed and mismanagement following the financial meltdown.
Astute companies therefore aspire to build their reputations as good
corporate citizens, demonstrated through corporate social responsibility
action. Under the sustainability banner, this mode of doing business
involves accountability to relevant stakeholders and strategic
management of practices affecting society and the environment.
Until recently, contributions such as corporate social investment and employee involvement were not always considered part of the social responsibility and sustainability agenda. However, innovative business strategists are now advocating for all social responsibility and sustainability-related activities to be planned and managed as aspects of core business strategy.
For example, strategist Michael Porter and colleagues at Harvard University believe the route to accountable and economically successful business lies in the principle of “shared value”. By this they mean that businesses should reconnect company success to social progress. Porter and colleagues believe that companies must take the lead in bringing business and society back together and that this approach will create shared value for all stakeholders. They emphasise that shared value is not a redistribution approach that requires “sharing” the value already created by firms. Instead, it is about co-operating across sectors to expand the total pool of economic and social value.
The European Commission’s latest guidelines (2011) on corporate social responsibility explicitly include employee community involvement as a key aspect. Business in the Community, an international business-led association that promotes responsible business practice, states that “employee community involvement is a key aspect of CSR”. And the Committee Encouraging Corporate Philanthropy, a global network of chief executives, is documenting efforts by their chief executive members towards corporate engagement in entrenched societal issues. This includes leading and empowering their employees to get involved in communities.
What does all this mean for South Africa? In the first place, it is necessary to consider the overarching socioeconomic environment. The 2011 National Development Report makes sobering reading. Despite one of the most progressive constitutions in the world, significant improvement in service and housing delivery and relative survival through the global economic downturn, inequality in South Africa is greater than ever, characterised by an ever-widening gap between rich and poor. It is now obvious that the government alone will not achieve the necessary social change. Indeed, the National Development Report lists “collaboration between the public and private sectors” as one of the key factors to enable success of the report’s recommendations.
The business sector already partners with the government on infrastructure and other development projects, and broad-based black economic empowerment legislation ensures contributions to enterprise development. South African businesses also make substantial contributions to social investment. The 2011 edition of the CSI Handbook reports an estimated R6.2-billion spent on social investment in the 2010-2011 financial year.
The handbook further estimates that 76% of South African corporates support some form of employee involvement. The best companies are linking the volunteer work of their employees to overarching developmental goals. Company leaders are visible participants in these efforts, which then characterise and inspire company culture. Some companies now include social responsibility involvement as one of the items measured in annual performance reviews. At the same time, investment in impact assessment is made with non-profit partners and other stakeholders, including government.
Despite the growing interest, there is much work to be done in South Africa if the latent developmental potential of employee involvement is to be unlocked. For example, in spite of the guidance provided by King III and associated integrated sustainability reporting standards, many corporate social investment managers, usually also responsible for the promotion and management of employee involvement, are institutionally isolated and unable to access the requisite levels of authority and business intelligence. Too many corporations still regard volunteering as simply a convenient vehicle for team building and staff recreation, rather than planning sustainable programmes that align with business strategy.
There is a slow but discernable shift towards a more strategic approach however. For example, a number of the corporate clients of the Charities Aid Foundation Southern Africa are implementing comprehensive employee involvement programmes that are planned to align with business strategies, at the same time as making sustained social contributions that include mentoring and skills transfer. The most successful South African employee-engagement programmes have visible and substantive support by company leadership.
Potentially, the most significant social responsibility leverage through employee involvement lies in payroll giving, though currently only an estimated 22% of South African companies offer this benefit. This collective resource, so far largely untapped, has the most likely potential to swell development resources while also enhancing corporate citizenship profiles.
Statistics on Australian payroll giving show that 100 000 employees donated $28-million through 2850 employers during 2010. Unfortunately, the South African Revenue Service does not yet collect similar statistics. But if only 10% of South Africa’s 13-million employed people—1.3-million individuals—each contributed R50 a month of their salaries, it would amount to an additional R780-million every year invested in development or charitable programmes.
Several companies supporting payroll giving also offer to match employee contributions rand for rand. This is regarded as an aspect of spending on social investment and doubles the value received by the beneficiary while in turn building a reputation of corporate citizenship.
Although a majority of large companies do now have formal employee-involvement programmes, few of these are strategised and planned in a way that enables alignment with other business imperatives, efficient management and effective monitoring and evaluation of results. In the Charities Aid Foundation Southern Africa’s experience, the application of strategic management principles improves all aspects of employee-engagement programmes.
The first step in planning an efficient and effective employee-engagement programme is agreeing on a policy that will be aligned with business and social goals and will form the foundation of the programme. The values underpinning the employee-engagement policy should reflect those of the company and the management framework must include a code of ethical practice to ensure, in particular, appropriate behaviour when employees are volunteering in communities.
Ethics and integrity must be the cornerstones of effective social responsibility initiatives. This is particularly true in the area of employee involvement, where the real needs of potential “beneficiaries” must be negotiated rather than corporate agendas imposed.
King III roots the moral and ethical dimensions of good corporate governance in the African concept of ubuntu, which holds that “a person is a person through other people”.
This concept has been adopted by progressive business thinkers in South Africa because ubuntu recognises the importance of inter-dependent relationships between an enterprise and the community in which it exists. It is widely used to invoke relationships of mutual care and is thus completely appropriate as a founding value of employee community involvement.
Colleen du Toit is chief executive of the Charities Aid Foundation Southern Africa
An associated factor is the global demand for more ethical and accountable business practices, enshrined in such initiatives as the United Nations Global Compact, the Global Reporting Initiative and, in South Africa, the third King Report on Corporate Governance (King III) and the Social Responsibility Index of the JSE.
Until recently, contributions such as corporate social investment and employee involvement were not always considered part of the social responsibility and sustainability agenda. However, innovative business strategists are now advocating for all social responsibility and sustainability-related activities to be planned and managed as aspects of core business strategy.
For example, strategist Michael Porter and colleagues at Harvard University believe the route to accountable and economically successful business lies in the principle of “shared value”. By this they mean that businesses should reconnect company success to social progress. Porter and colleagues believe that companies must take the lead in bringing business and society back together and that this approach will create shared value for all stakeholders. They emphasise that shared value is not a redistribution approach that requires “sharing” the value already created by firms. Instead, it is about co-operating across sectors to expand the total pool of economic and social value.
The European Commission’s latest guidelines (2011) on corporate social responsibility explicitly include employee community involvement as a key aspect. Business in the Community, an international business-led association that promotes responsible business practice, states that “employee community involvement is a key aspect of CSR”. And the Committee Encouraging Corporate Philanthropy, a global network of chief executives, is documenting efforts by their chief executive members towards corporate engagement in entrenched societal issues. This includes leading and empowering their employees to get involved in communities.
What does all this mean for South Africa? In the first place, it is necessary to consider the overarching socioeconomic environment. The 2011 National Development Report makes sobering reading. Despite one of the most progressive constitutions in the world, significant improvement in service and housing delivery and relative survival through the global economic downturn, inequality in South Africa is greater than ever, characterised by an ever-widening gap between rich and poor. It is now obvious that the government alone will not achieve the necessary social change. Indeed, the National Development Report lists “collaboration between the public and private sectors” as one of the key factors to enable success of the report’s recommendations.
The business sector already partners with the government on infrastructure and other development projects, and broad-based black economic empowerment legislation ensures contributions to enterprise development. South African businesses also make substantial contributions to social investment. The 2011 edition of the CSI Handbook reports an estimated R6.2-billion spent on social investment in the 2010-2011 financial year.
The handbook further estimates that 76% of South African corporates support some form of employee involvement. The best companies are linking the volunteer work of their employees to overarching developmental goals. Company leaders are visible participants in these efforts, which then characterise and inspire company culture. Some companies now include social responsibility involvement as one of the items measured in annual performance reviews. At the same time, investment in impact assessment is made with non-profit partners and other stakeholders, including government.
Despite the growing interest, there is much work to be done in South Africa if the latent developmental potential of employee involvement is to be unlocked. For example, in spite of the guidance provided by King III and associated integrated sustainability reporting standards, many corporate social investment managers, usually also responsible for the promotion and management of employee involvement, are institutionally isolated and unable to access the requisite levels of authority and business intelligence. Too many corporations still regard volunteering as simply a convenient vehicle for team building and staff recreation, rather than planning sustainable programmes that align with business strategy.
There is a slow but discernable shift towards a more strategic approach however. For example, a number of the corporate clients of the Charities Aid Foundation Southern Africa are implementing comprehensive employee involvement programmes that are planned to align with business strategies, at the same time as making sustained social contributions that include mentoring and skills transfer. The most successful South African employee-engagement programmes have visible and substantive support by company leadership.
Potentially, the most significant social responsibility leverage through employee involvement lies in payroll giving, though currently only an estimated 22% of South African companies offer this benefit. This collective resource, so far largely untapped, has the most likely potential to swell development resources while also enhancing corporate citizenship profiles.
Statistics on Australian payroll giving show that 100 000 employees donated $28-million through 2850 employers during 2010. Unfortunately, the South African Revenue Service does not yet collect similar statistics. But if only 10% of South Africa’s 13-million employed people—1.3-million individuals—each contributed R50 a month of their salaries, it would amount to an additional R780-million every year invested in development or charitable programmes.
Several companies supporting payroll giving also offer to match employee contributions rand for rand. This is regarded as an aspect of spending on social investment and doubles the value received by the beneficiary while in turn building a reputation of corporate citizenship.
Although a majority of large companies do now have formal employee-involvement programmes, few of these are strategised and planned in a way that enables alignment with other business imperatives, efficient management and effective monitoring and evaluation of results. In the Charities Aid Foundation Southern Africa’s experience, the application of strategic management principles improves all aspects of employee-engagement programmes.
The first step in planning an efficient and effective employee-engagement programme is agreeing on a policy that will be aligned with business and social goals and will form the foundation of the programme. The values underpinning the employee-engagement policy should reflect those of the company and the management framework must include a code of ethical practice to ensure, in particular, appropriate behaviour when employees are volunteering in communities.
Ethics and integrity must be the cornerstones of effective social responsibility initiatives. This is particularly true in the area of employee involvement, where the real needs of potential “beneficiaries” must be negotiated rather than corporate agendas imposed.
King III roots the moral and ethical dimensions of good corporate governance in the African concept of ubuntu, which holds that “a person is a person through other people”.
This concept has been adopted by progressive business thinkers in South Africa because ubuntu recognises the importance of inter-dependent relationships between an enterprise and the community in which it exists. It is widely used to invoke relationships of mutual care and is thus completely appropriate as a founding value of employee community involvement.
Colleen du Toit is chief executive of the Charities Aid Foundation Southern Africa
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