On 1 July 2016 the Cabinet Office, in association with Legal & General, hosted an all-day open conversation on the future of ‘mission-led business’ in which Tom participated. Tom facilitated a discussion on What can ‘Mission-Led Business’ learn from the world of CSR? and this is the first of two notes on the issue which he wrote as a result and submitted to the review.
In 1955 the phrase ‘Corporate Social Responsibility’ first appeared in academic literature and the mid 1970s saw the first despairing claim that the acronym ‘CSR’ had lost its meaning and authenticity.
It’s true, as the CEO of Dollar UK wrote for the CBI’s ‘Great Business Debate’ blog in June 2016 that ‘some cynics still insist that CSR is at best an act of empty corporate philanthropy, and at worst a smokescreen used to hide a multitude of corporate sins’. Mr Howard says that Dollar ‘see CSR as a central function that underpins the ethos of the whole company’ — but surely that should be much more than just encouraging employees to undertake ‘bake sales and sponsored runs’ and allowing them half a day per year of paid volunteering time, as he does? It’s also about being a responsible trader. Dollar is a finance company whose major subsidiary, Money Shop, was last year ordered to return to low income customers £15M which it had not been entitled to take from them. That’s not responsible lending or responsible business. But I know a ‘smokescreen’ when I see one.
Whilst the idea of mission-led business may be relatively new, the concept of designing a business around a social purpose in a way that complements, rather than undermines, conventional ideas of business success is not. The Quaker giants of the 19th century did it and Unilever is doing it now. Society needs the power of responsible business to complement the public and third sectors in their work. But whilst a host of social enterprises, B Corps and others are being created the real challenge is to learn from 60 years of CSR in mainstream business and distil what is good about it; in order to inform the process of retrofitting mainstream business with broad social and environmental missions.
A company’s mission can be wide ranging, encompassing both strict business terms such as ’to provide supportive, non-exploitative personal loans at affordable prices’ (Dollar UK please note); to the eradication of collateral damage, like ’to operate in a carbon-neutral way’. Such a company will come to have ‘responsibility’ running through it like Blackpool Rock in respect of engagement with its employees, customers, environment, neighbours, supply chain and the law. The benefit that accrues from this is ‘purpose’.
When a company has mission and purpose it can create value in qualitative as well as monetary terms. A sense of purpose from engagement with the company mission is known to be linked to greater employee productivity, loyalty and length of service; to reduced sickness time lost and greater informal ambassadorial activity; and to enhancing the company’s reputation.
The person with conscience should not ‘give up’ on business being a force for good, led by its mission. It has to become such, for we will struggle to survive if it isn’t. But the business person should not decline a broader degree of responsibility either: there is a very good, even conventional case which argues that being a business for good makes good business, whilst there is little long term reason to stick with the superficial and optional conventions of rudderless CSR activity alone.