Although at present Belarus is facing a deep economic crisis, Belarusian managers are actively learning to implement Corporate Responsibility (CR) in business, due to the positive benefits such practice yields. Dwayne Baraka, a British CR expert from Business in the Community believes that Belarusian managers will soon develop very intriguing corporate responsibility concepts in their domestic markets. It is hoped that such initiatives will assist in steering Belarus through the economic crisis it is facing.
The training on Corporate Responsibility for MBA teachers at the School of Business and Management Technology (SBMT), Belarusian State University, took place in January 2012 and was led by Dwayne Baraka. The training series for MBA teachers in the area of corporate responsibility takes place within the project Slovak Experience in Corporate Responsibility for Belarus, implemented by the Pontis Foundation. This will run until December 2012 and is funded by the Slovak Official Development Assistance programme – Slovak Aid.The concept of corporate responsibility is becoming more and more popular. A number of governments have also come out in favour of businesses adopting CR strategies.
What is the reason that makes corporate responsibility so popular and important?
I think there are many reasons. From a purely business perspective, CR can help companies reduce costs and open new business opportunities. This comes as a surprise to various executives, but our research identifies several ways in which businesses can, and do, benefit from corporate responsibility. From a civil society perspective, the additional skills and resources that businesses gain can boost social structures and, concurrently, strengthen the business environment. One only has to look at the business response to the London riots recently in order to tackle skills and jobs shortages in areas affected to understand how business actions on social issues can drive radical change. UK businesses have responded in this way because they know that in order to remain profitable and find new revenue streams, they need strong civil societies.
Consumers have also increased their demand for companies to be more transparent about their operations. This includes the positive aspects that they are responsible for, and to also admit to the things that they do not do so well. The recent focus on Banker’s bonuses in the UK is one example, but it can also be seen in Puma’s recent profit and loss report which is focused entirely on disclosing an economic valuation of the environmental impacts caused by GHG emissions and water consumption along its value chain. That report is almost solely aimed at building trust in the Puma brand and also on managing environmental impacts. From a governmental perspective, the business community has a very important role in creating strong civil societies. We have seen some great examples of CR happening when governments work with alongside the business community to meet social needs. I think that the regulation of CR; such as what we have seen in South Africa and Denmark are profound, and this leads to the recognition of the roles that each of the three parts of society play in making society better.
What are the latest trends in corporate responsibility in Great Britain?
There is a lot of interest in the idea of Integrated Reporting. As the name implies, it’s trying to integrate CR reporting within usual business reporting mechanisms. It means that companies report metrics on things like carbon usage, employee engagement, customer service and community support as part of their Annual report. We think it’s an exciting development that will mean clearer links between the business case for CR and business performance. There is also a lot of interest in understanding which aspects of CR are most significant to businesses. That’s being looked at across organisations, across sectors and even at the global level. Companies are becoming increasingly sophisticated in their reporting of CR and helping investors to understand how CR is connected to business activity is something which will assist investors and regulatory bodies. Certain investors (shareholders and prospective shareholders) are also showing interest in which CR metrics businesses are considering most significant.
Do you see any difference between CR strategies pursued in companies in Western democracies and CR strategies promoted by managers from countries such as Belarus?
That’s a difficult question for me to answer. I guess the only way I can answer it is to say that the people I spoke to in Belarus have many of the same issues that we see in the UK; such as attracting and retaining staff, productivity, cost pressures, opportunities to innovate and brand value. All of those things can be supported by CR, so I imagine CR will have similar benefits. Of course there are cultural differences that will have some impact, and we need to be sensitive to those differences. The exciting thing is that the cultural differences will mean that Belarusian CR will be unique and distinctive. I look forward to seeing how Belarus creates its own version of CR! Russia is a very big business partner for Belarus, and Russian companies are increasingly looking at CR as a way to create business value. Companies such as LUKOIL, Norilsk Nickel, Sakhalin Energy, Transaero and Severstal are all very interested in CR. It also seems that Vladimir Putin is increasingly advocating sustainable thinking as the way forward for the Russian economy. As Alexey Kostin puts it: “All companies, Russian or otherwise, face a difficult global climate. Understandably, it is tempting to delay the implementation of innovative policies like corporate social responsibility when survival itself is a concern. However, (…) Russian businesses can help position themselves as stable and trustworthy institutions worthy of significant investment, and even become leaders in the international business community.”
Although Belarus is gradually opening up to foreign trade, 70% of companies in the country are still managed by the state. Is it possible to promote CR strategies in countries with high levels of state ownership?
State ownership is not globally unique. In many ways common ownership makes CR more important and easier to achieve. Belarus can look to countries such as Indonesia, Spain, Sweden and Venezuela for positive examples of state owned enterprises embracing CR as a creator of value. Within those countries, sometimes CR has been led by state-owned companies and in other countries by privately owned companies. I imagine that the best implementations of CR involve both types of companies targeting CR. State ownership probably makes governance and transparency of enterprises arguably more important, but even that shouldn’t be seen as a limiting factor on CR. CSR Europe is leading a research project on the issue of CR in state-owned enterprises, and it will be interesting to have a look at their findings.
What is your view on the sentiment that CR is only valid for wealthy, first world countries?
That’s possibly right, but not in the way you might be imagining. Most companies that we work with tell us that CR makes them more profitable and more focused on long-term performance, which results in a positive outlook for their revenue streams. We think that CR is directly connected to making profit, and so we think that CR leads to increased wealth, especially over longer periods of time. So countries that don’t embrace CR are leaving profit opportunities on the table. Of course there are many countries and regions not considered wealthy, that are doing remarkable things in relation to CR. Some of the CR initiatives in Brazil and Africa are ground breaking and world leading. We believe that this is increasing their social stability and likelihood of increasing their national wealth. There are various examples such as GrameenPhone (providing affordable telephony to the entire population of Bangladesh) which could only have happened in one of the world’s poorest nations, and which are clearly examples of CR in action. Also, China’s commitment to CR is growing at an astounding rate. They already have projects like the largest solar energy field in the world and the world’s largest hybrid car plant. Of course there are aspects of CR that are being partly or wholly ignored there, but they certainly see the value and opportunities that CR offers.
Do you see any differences between Belarusian and British managers who are trying to promote CR?
The two countries are at very different stages in relation to CR. Some of the more recent thinking on responsible marketing, supply chain and wide-scale business model change that we are seeing in the UK possibly needs a more solid foundation than we have observed at present in Belarus. But that’s not to say that the journey of CR will be entirely different. Some companies that we work with in the UK have very similar questions to those I heard from Belarusian companies. In many ways CR is a radical new way of thinking about and doing business. Just like any radical change, it takes time to build the skills necessary to do CR well. Our research into the skills needed to manage CR tells us that there are some distinctive things about CR Managers. Our CR Practitioner Competency Map is a fairly detailed look at the behaviours needed to achieve successful outcomes from CR.
You had the chance to meet with Belarusian managers and teachers. How effective do you think they will with integrating CR practices in to their work?
I was really impressed by the Belarusians that I met. The managers really want to play their part in building a strong and responsible Belarus and the lecturers are very focused on the benefits that CSR can bring to Belarus, and more importantly, to managers of Belarusian businesses. I also believe that these managers and lecturers are uniquely placed to achieve some good things for Belarusian society. It is remarkable how quickly they have gone from knowing very little about CSR to being very knowledgeable. They were quick and eager to learn, it was a pleasure to have worked with them.