RESOURCES - INTRO TO CR

The purpose of this section is to give a brief introduction of Corporate Responsibility (CR). To download a list of organisations that work in the area of CR please click here.

Introduction to Corporate Responsibility

At the core of the concept of corporate responsibility (also referred to as Corporate Social Responsibility) is the recognition of the need to balance the interests of those who provide investment in an organisation for a return, and all other stakeholders (including employees, customers, suppliers, the community in which they operate) as well as the environment. For commercial organisations, this means considering how corporate behaviour affects the short term return to shareholders and the longer term shareholder value that is created.

Not all organisations recognise the term corporate responsibility. There are a number of other expressions used to describe the same or similar things, which reflects the fact that while the issues surrounding responsibility are not new, the more formal aspects of managing and communicating them are. Examples are business ethics, sustainable development, social responsibility, or corporate citizenship.

Engaging in corporate responsibility is often made to sound lofty and idealistic and is sometimes portrayed as being detrimental to the return to shareholders. However, there is increasing recognition that responsible management should enhance profit by, for example, lowering staff turnover, reducing waste, making relationships with suppliers more effective, creating greater customer loyalty, and so on. It can also have an important role in managing risk, which can consequently reduce the likelihood of harm to reputation, cost of disputes or litigation or other situations that can damage the prospects of the company. Some companies have been able to measure this benefit, and others have counted the cost of failure to manage responsibly.

In practice, many companies already do more than legislation requires and pure shareholder interest would demand. Some large organisations have structured Corporate Social Responsibility (CSR) programmes with dedicated staff and board level responsibility. These tend to be most successful when they come about through strong leadership and when corresponding values are embedded within the organisation. Smaller firms may not do things so formally, but often can have a much bigger impact proportionate to their size.

An important aspect of corporate responsibility is to ensure that it is genuine and not undertaken in a cynical or superficial way. This has been a key driver for companies to seek external and independent assessment. The GoodCorporation Standard was established to provide not only a robust assessment process but a global set of criteria against which organisations could measure their own practices.