The scope of responsible business

KARACHI: Responsible business is something we are coming to grips with in developing countries. It has evolved from something that ‘should’ be done to something that ‘must’ be done.

The change is in response to the shifting corporate climate where evolving regulatory and market conditions translate into dealing with the demands of business and consumers, and consequently: investors.

Companies are learning that it is smart to do business responsibly. They are learning that in today’s world, their success depends not just on business practices and models but also on being seen as responsible members of the community.

They have found that adopting proven practices in these regards has accelerated growth and improved performance.

The ‘Responsible Business Guide’ being launched by the Centre for International Private Enterprise (Cipe) in collaboration with the Association of Chartered Certified Accountants (ACCA) provides some guidelines for companies in the country looking to be responsible.

Although firms in Pakistan are eager to donate, and this is no doubt a good thing, spending haphazardly on communities and then issuing press releases does not constitute responsible behaviour. It is not even smart. Companies need to engage themselves and their employees in the community, so that they influence and direct the change themselves.

For example, instead of distributing bars of soap in different communities, a much better idea is a campaign where the community is coached and made to understand why soap is important and experiences are shared. Then maybe they would be convinced to use it.

Next, companies think they can hide their dirty laundry and believe that they can get away with it. The trouble is that sooner or later someone does find out. And sometimes, if the problem is big enough, media outlets will publish it despite the leverage corporations have over them with advertisement promises.

Disclosing information before anyone else highlights maturity and a willingness to take responsibility for the deed. It makes people trust companies and it makes them more willing to give up their faults.

Moreover, most Pakistani firms hire public relations companies that keep telling everyone about how their employers have made a difference to the community by doing something nice. However, in most cases there is absolutely no documented evidence. The Citizens Foundation, for example, does not have to resort to such tactics – their internal reports and memos which document the progress they have made are enough.

Agreed that the business of ‘responsibility’ is not so cut and dry that everyone would understand it by reading a report or an essay on it, but the Responsible Business Guide points out that companies need to understand that being a corporation entails being a part of the community, just like a person.

And communities thrive on people helping each other. No one doubts how profoundly the evolution of empathy has shaped human development and society in profound ways. Responsible business is all about understanding the community, empathising with it and understanding the roles that a corporation needs to play as a part of the said community.

Published in The Express Tribune, November 15^th, 2010.