My post on public support for education of every citizen at differing magnitudes referred to individual citizens. The argument can be extended to organizations both private and public. At the level of organizations (companies, voluntary agencies such as churches; schools, hospitals, government agencies and others, giving something for the good of the commonwealth is so important that it is sometimes part of management philosophy and an aspect of strategic planning. Corporate social responsibility (CSR) which is the applicable concept, in this case, refers to the manner organizations operate to meet societal expectations by way of giving back and keeping to laws and guidelines. It is not expected to be ad hoc; it should be deliberate and sustained.
Rationale for CSR:
Justifying a position such as zero contribution of society to the establishment, growth, and survival of any organization should be seen as an exercise in futility. The commonwealth or society provides facilities and services used by organizations of which if the actual per-unit cost is determined, few organizations would be in operation. Businesses benefit at differing levels, for example in locations where electricity is free or uniform tariffs are charged (in villages all businesses pay same amount irrespective of size), a restaurant consumes what one office in a manufacturing company uses yet both are benefiting from the society and so should put something back for the common good in line with their means. A church that uses air conditioners during worship cannot be compared with a church without light bulbs yet the micro church owes something because the government provides other facilities and services ( e.g. security, sanitation, roads, among other things) to all organizations irrespective of size. A pastor running a 20-person parish has to communicate with the flock just as the pastor with a parish of two thousand.
CSR comes in various forms ranging from environmental management to human development to the provision of expensive infrastructure and facilities. Responsible crude oil exploiting, mining, and refining companies train youths on skills, build roads, schools, hospitals, and provide electricity and potable water. When valued, several of such philanthropic and developmental activities may have minor impact on the bottom line but they change lives and in some cases the socio-economy of an entire community.
Organizations involved in articulated rather than ad hoc CSR benefit in several ways including good corporate image; development and retention of loyal customer base; and can one discount the direct impact such as existential issues? If irate youths go on rampage and destroy machinery and buildings worth $100 million, is it not better to regularly put in just $1million in local equivalent to improve individual lives and facilities at the company’s location? That to me is good business sense instead of arguing that company tax is being paid to the government of which ordinary citizens of Nigeria (OCN) have no access. In general, organizations that are regularly involved in CSR do well – it should be so because giving back has physical and metaphysical implications.
One of the several ways of implementing CSR is specified by the United Nations Industrial Development Organization (UNIDO) and termed the Triple-Bottom-Line approach. It recommends that businesses make an effort to achieve a balance of economic, environmental, and social imperatives (UNIDO, 2020). UNIDO also notes that CSR goes beyond charity, sponsorships, corporate image, and development of brand loyalty. It is a comprehensive and long term package that does not neglect the interest of shareholders and other stakeholders. The International Organization for Standardization (ISO) the agency that comprises all standards-setting organizations in the world assigns ISO 26000 to CSR. All business organizations irrespective of size are expected to incorporate activities in their business strategy to reflect concerns about the environment; use of local resources in a sustainable manner; attention to social issues (such as health and education); while keeping business economics active in the mix.
A Variant of CSR:
A common tendency is to regard philanthropy or contributions to society as the baseline or essence of the concept of CSR. This is not true. A key aspect of CSR involves keeping laws and following public policy. All business entities, as well as non-business organizations in Nigeria, are expected to be registered with the Corporate Affairs Commission (CAC). Once registered they become legal persons with rights and responsibilities. Some of the rights include benefiting from public programmes such as loans, grants, and protection at different levels in line with the group each belongs. Some of the responsibilities include keeping laws and generally operating in line with extant and evolving public policies. An organization is regarded as a “good corporate citizen” if it operates within the laws, policies, codes, and local customs of its location. This does not respect the organizational type. This was why it was distressing during the national lockdown (a response to COVID-19) that some churches held Sunday worship services between 6am to 8.30 am before government Task Forces commenced operations. Well, run churches that had persons with initiative and technical capacity went online rather than operate in the dark and against government directives. The Holy Bible encourages obedience to authorities because leaders are made by God (THB, Romans 13:1-2). It is just to keep rules and whichever public policy is not repugnant to morality and good conscience. Selective or skewed interpretation of religious texts to suit emerging situations for the convenience of few is wrong.
A Giant CSR in the Nigerian Education Sector:
There is no dispute that Tertiary Education Trust Fund (TETFund) from its conceptualization was not a child of voluntary giving, but it is a product of law. The Commission on the Review of Higher Education in Nigeria was set up by General I B Babangida in 1990 as a successor to the Eric Ashby Commission of 1959. The Gray Longe Commission as it became known suggested among other things that certain categories of businesses should remit 2% of their pre-tax profits to the Federal Government for improvement of the education sector (the funds are collected by the Federal Inland Revenue Service – FIRS). Act No. 40 of 1998 amended the Education Tax Fund Act No. 7 of 1993 which itself was replaced by a 2011 Act to enable the agency to focus on tertiary education. I insist that without TETFund there would be no tertiary education in Nigeria today; it would be post-secondary education with ragtag infrastructure and poorly motivated staff of public higher educational institutions. TETFund supports several operations including post-graduate studies locally and abroad; conference attendance abroad; library development; research; publication of journals, textbooks, and Minimum Standards/Benchmark for Academic Standards; accreditation; teaching practice and entrepreneurship administration; equipment purchase; and development of buildings and academic-related infrastructure (notice that buildings and other physical infrastructure are listed last because real academics has to do with the first set of activities). To cap it, funds allocated do not lapse until after five years.
CSR as a Categorical Imperative (CI):
In 1788 German philosopher Immanuel Kant published three books that explicated his moral philosophy. In the “Critique of Practical Reason,” he discussed a concept which in summary canvassed that all human actions should be seen from the moral perspective of universal applicability. Can a proposed action be seen to be right and beneficial to everyone in the society if not mankind in general irrespective of the motivations of the doer? Can the expected usefulness of a plan be absolute or categorical rather than desirable; should actions not be compelling (imperative) rather than optional; and applicable to all? (CI reminds one of Rotary International’s 4-Way Test of the things human beings should think, say or do). Spewing waste into open drainage with the stench and health hazards solves a problem for a manufacturer or fast foods/restaurant; is it universally appropriate? Human trafficking may take the burden of upbringing off the shoulders of poor parents or an economically disabled society but is it morally acceptable without question? And exploiting natural resources without consideration for future generations and the environment with no action to replenish, can these be regarded as compelling and universal moral actions? Is it good for society to host an organization that operates with the principle of impunity as a standard?
Whether at an individual or corporate (managed by human beings) level CI recommends that as sentient or rational beings whatever is done should be global even if the action is localized. The two arms of CSR – good legal citizenship and putting something back into the society need to be seen as categorical (prescriptive) rather than hypothetical (optional) imperatives.
The Spur for this post:
I went to the location of one of the most successful businesses in Akwa Ibom State at present (a transport company). The access road to the site off Ikot Ekpene Road is perilous; that, in my opinion, takes the shine away from the company. It can be guessed that the operators expect the government to repair that road. Still, on community roads, two high brow schools, several big churches and a popular health care company operate along Ikot Ntuen Road parallel to the University of Uyo Teaching Hospital gate. Which among the organizations will save that road? It is a surprise that none of those thriving enterprises has considered the possibility of losing some customers because of the bad road. And it is possible that new customers desirous of starting relationships can be turned off given the poor access road(recently I asked a friend Mr Sam Antai why he maintains a classy office in spite of the present low level of business; he told me his clients get turned off by businesses operating in kiosks, make-shift offices, and unattractive business locations). Then, once upon a time, a Local Government Chair thoughtless of his pocket and more of the community. The man, Mr Ekpe James built a road from Obot Idim through two villages to his village of Ikot Udo Ekop in Ibesikpo Asutan Ekpe LGA. The road, once a delight to drive through is now used by tippers only. Reason? Some Village Heads working with a handful of unconscionable human beings collect toll from tipper drivers (at least 80% of the tippers are owned by people from neighbouring states). The tippers buy sharp and plastering sand from sand miners at village streams. Neither the toll collectors nor the tipper owners thought of filling emerging potholes till the road became closed for regular traffic. If indigenes who are now the losers carry placards they will be dubbed militants! What has happened to that road is close to the economists’ concept of immersing growth propounded by Jagdish Baghawti. Business is going on with marginal growth but there is net decline in the welfare of society.
Every for-profit and not-for-profit organization must wake up to two facts: first, that the society makes helpful inputs into their operations of which none of them pays actual cost(most don’t pay anything, not even LG tariffs); second, that putting something back is an imperative even for their good (the tippers mining sand and destroying community roads must be making marginal profits because of mounting costs of repairs). Giving back makes business sense; it enhances business operations and is socially and morally salutary and responsible. Can t a micro business adopt the street it is located and keep it clean? Can a church clear bushes and eliminate stagnant water where is located so as to reduce the incidence of malaria? Those are small but significant CSR engagements.
Environmental degradation ultimately impacts negatively on the organizations that cause it. Who knows how many persons develop ear problems arising from high decibels generated by religious organizations aside from excessive indulgence in the plethora of religious programmes? Crude oil companies appear not to realize the impact of acid rain (from gas flaring) on their facilities and even the future of their business with respect to exploitation and sales of natural gas currently being flared. Expatriates may believe the local communities bear the brunt of carelessness and neglect. Antiquated pipelines gave way in Ogba/Egbema/Ndoni Local Government Area of Rivers State recently. Oil spills have condemned hundreds of hectares of farmland and kilometres of waterways. Apart from the millions of dollars that will be spent on clean up, compensation, replacement of the pipes at current prices, and lost sales, Nigeria Agip Oil Company (NAOC) established in Nigeria in 1962 evidently and conveniently forgot about the concept of environmental commons – oil spill at Omoku may show up on the shores of Italy (birthplace of NAOC), USA, and Australia for Planet Earth is one and networked!
I rest my case.