An assessment of CSR and COVID-19

One of the key indicators of how our government will successfully manage and combat the COVID 19 could be the level of corporate support. In short, Ghanaians will be observing and assessing which companies or brands will invest some money and time in helping government and its agencies to educate the public and combat COVID-19.

The corporate environment in Ghana is varied. There are Limited Liability Companies; Companies Limited by Guarantee; non-Ghanaian companies registered as External Companies; and State-Owned Corporations created by statute. There are other forms of associations such as Partnerships and Co-operatives that are corporate entities by law. Further, there are unincorporated businesses, such as Sole Proprietorships that act like corporations. In a way some, if not all, of these corporate and quasi-corporate forms are enjoined by CSR principles.

Given growing public concerns about the economic, social and environmental impact of corporate operations, there is growing pressure on businesses to promote corporate social responsibility (CSR). Among these are three key multilateral initiatives aimed at encouraging corporations to make a positive contribution to economic and social progress.

These initiatives are the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, the International Labour Organisation (ILO) Tripartite Declaration on Principles Concerning Multinational Enterprises and Social Policy, and the United Nations Global Compact.  Under international legal systems, states are under obligation to regulate or encourage good corporate practices. Hence, the demands on CSR can be derived not only in the context of local laws and regulations of Ghana, but also within the context of international law.

According to Atuguba and Dowuona-Hammond (2006), there is no comprehensive document on CSR in Ghana. Nonetheless, there are a variety of policies, laws, practices and initiatives which provide the CSR framework in Ghana. In the absence of a clear CSR policy, individuals, advocacy groups and public agencies seeking to hold corporations responsible to their social responsibilities usually encounter difficulties in doing so because of the absence of a source document on CSR for reference. Also, companies seeking to meet their corporate social responsibilities are not sure that they are doing what they should be doing, and are unclear about the exact parameters of CSR.

Definitions of CSR

Several authorities have argued that there is no universal definition of CSR, since the concept is always being redefined to serve changing needs and times. While the fundamentals of CSR remain the same everywhere, different emphases are found in different parts of the world because CSR issues vary in nature and importance from industry to industry and from location to location. However, whichever way one looks at it, CSR is about the relationship between corporations and their stakeholders and society.

Milton Friedman was the first to start debate on the social responsibility of corporations. In his article of 1970, Friedman argued that the actual business of businesses is to make profit.  He wondered why business should have responsibility, arguing that only people should have responsibility. The basis of his argument is that a corporation is an artificial person and, in that sense, may have artificial responsibility, no matter how vague. Over time, the view of Friedman that business organisations should focus on maximising profits for their investors, leaving social issues as a concern for corporate social responsibility (CSR), no longer holds water.

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Essentially, there is a need for corporations to align their values with societal expectations in order to reap tangible benefits. Over the years, a new mindset on CSR has developed – one that goes beyond corporate philanthropy to building processes which require that businesses be responsive and responsible to the different levels of environments in which they operate. One trend that is emerging in CSR debate is that in times of global pandemics like the COVID 19, governments alone cannot handle the issues.

CSR has increasingly become an important element in business strategy and has the potential to radically alter the focus of businesses to take more account of the external impact of their operations for the broader society.  CSR encompasses a more universal view of the responsibility that a business has to the society in which it operates.

The intrinsic argument of Friedman’s argument is that the wishes of stakeholders are the overriding consideration for management. As stated above, the stakeholder model over time emerged as an influential theory from the perspective of business ethics. The stakeholder theory is based on the premise that organisations do not just exist for the benefit of its investors alone, but represent the hopes, objectives and ambitions of a wide variety of stakeholders.  Key stakeholders are increasingly agreeing that corporations are critical actors in the political, economic, social and cultural development of all countries.

Besides providing goods and services, corporations are a source of livelihood for many; paying taxes and having an impact on the physical and social environment. In this context, I am unsure whether to categorise churches as corporations or civil society. Whatever the classification of churches, I personally think they owe society, at least their members, some type of social responsibility if Ghana is to overcome the COVID-19 pandemic.

CSR is a helpful framework for exploring the corporate attitude of companies toward stakeholders. It is about balancing the corporate need to make profit with the diverse demands of communities and nations to engage in sustainable development. Today, corporations must recognise the needs and demands of many stakeholders including communities, governments, CSOs and other stakeholders. Thus, CSR is a vehicle by which companies can frame their attitudes and strategies toward stakeholders within a legitimate, popular and acceptable concept.

Drivers of CSR

Various scholars have proposed several drivers or motives for firms’ social engagement; key among them being to develop a reputation and legitimacy and build brand identity. Brand identity has been defined in several ways. The identity of a brand is usually based on its distinctive and durable core attributes. Brand identity is generally defined as “a unique set of brand associations that the brand strategist aspires to create or maintain”.

A brand’s reputation is defined as a collective representation of its past actions and results which describe the brand’s ability to deliver value outcomes to multiple stakeholders. This definition highlights the importance of considering the impact of an orgnaisation’s activities on its various stakeholders and recognizing what matters to them. Using the above definitions of brands, it can be argued that Ghanaian companies have not taken advantage of COVID-19 to discharge their CSR obligations and make their brands more visible.

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In the typical sense of CSR, I had expected that businesses like those listed on the Ghana Stock Exchange, the Ghana Club 100, the Ghana Chamber of Mines and the Association of Ghana Industries would have responded positively by way of supporting government’s intervention. This is because, every business, big or small, depends on the health and wealth of the population. In times like these, it is not just companies striving to restore their bad reputations that attempt to demonstrate their ethical credentials. It is best practice for successful companies to be proud of supporting good causes like the fight against COVID-19.

So far, corporate response to COVID-19 campaign has been luke-warm. Some of the mobile telephone companies have used educational jingles as ring-tones. But that is not enough – given the amount of profit they make and how their success largely depends on effective branding. Kudos however, to two churches – the Church of Pentecost and Presbyterian Church of Ghana – for demonstrating good corporate citizenship. At the time of writing, the two churches had donated vehicles and other logistics to augment government’s public education campaign.

This is not the time to be denominationally driven. The church was intentionally established by God to solve problems of the world. In the unlikely event of a total lockdown of the economy, it is expected that more churches will support government efforts with food relief and health interventions etc. All said, Mr. Kennedy Agyapong, MP for Assin Central, and his media group also deserve commendation for donating health items worth millions of cedis to hospitals and para-hospitals across the country to combat COVID-19. Ghana will not come down.

References

Aaker, A (1996). Building strong brands. New York: The Free Press.

Atuguba, R and Dowuona-Hammond, C (2006). Corporate Social Responsibility in Ghana. FES. Accra. 

Friedman, M (1970). ‘The Social Responsibility of Business is to Increase its Profits’. New York Times Magazine, 13 Sept.: 32–3 and 122–6.

(***The writer is a Development Communications Specialist, and a Social Justice Advocate.  All views expressed in this article are my personal views and do not represent those of any organization(s). (Email: safoamos@gmail.com: Mobile: 0202642504 0243327586/0264327586

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