Responsible Leadership is the Foundation for Corporate Social Responsibility
Ongoing financial crises and institutional scandals have highlighted the role (and in some cases, absence) of ethical behaviour in leadership. Some telling examples from the last year include the BBC, Barclays Bank and (closer to home) the Health Services Union.
As an academic, business consultant and entrepreneur, Professor David Allen has strong views on how these two issues can inform contemporary business practice.
“Broadly speaking, responsible leadership rests on taking decisions only after you have looked carefully at the impact on all stakeholders and feel that you have done the best you can to assure that sustainable value is created and that the outcomes are fair.”
The Dean of the Business, Economics and Law faculty at the University of Surrey in the United Kingdom is a leading thinker on corporate social strategy. His book, Corporate Social Strategy: Stakeholder Engagement & Competitive Advantage
(2010) co-authored with Bryan Husted, examines corporate social action through the lens of economic and social value creation. It debunks the commonly held view that social action and profit are mutually exclusive, providing insights for how practitioners can implement corporate social responsibility programs (CSR).
“Responsible leadership is central to unlocking value from CSR initiatives – just as it is in all corporate activities,” he says.
“Creating value through social initiatives was the focus of my decade of work with Bryan Husted…One of our key messages was that strategic CSR must be managed with the same rigour and commitment given to all vital corporate activities.”
Appearing in Melbourne next month for ACCSR’s Annual Conference, Allen will deliver the keynote address about the tough challenges of responsible leadership that confront business leaders and practitioners.
“Responsible leadership begins with a clear commitment to tell your own direct reports the truth about the firm’s performance and their performance. When business is profitable and growing, we tend to paper over failings and concentrate on the upside,” he says.
“But when the business environment weakens and profits lag, we suddenly have to look closely at who we are and what we do well and not so well. This is hard work, and sometimes painful. We have close relationships with the people who work with us; we like them. Providing them with support and guidance in hard times is a challenge. It is only then we see that we didn’t do the job we needed to do in the good times. Responsible leadership is about commitment to truth and fairness and working at it – in good times and hard times.”
Ultimately, Allen is optimistic about the ability of CSR to deliver positive social impacts and drive greater performance.
“There are no specific barriers to using CSR strategies to create value,” he explains, going on to distinguish between two alternative forms of CSR.
“Again, in my research with Bryan, we found that firms were more likely to seek competitive advantage and value creation via CSR when more traditional strategies were less likely to differentiate the firm. Firms with strong, sustainable profits were more likely to engage in philanthropic CSR. Both approaches are absolutely legitimate, and firms may decide to do both kinds of CSR.”
However, he does have a warning for those involved in strategic community partnerships – undertake thorough exit planning.
“Once a firm has launched a strategic CSR program linked to competitive advantage and value creation, deciding to end the program requires additional work. When a product or service is not profitable, a firm can just stop offering it. Ending a product or service tied to a social good entails having a very good explanation why.”
Professor David Allen will present at ACCSR’s Annual Conference on Responsible Leadership. He will deliver the keynote address, “If everyone is doing CSR, why are we doing so badly?” on February 13th 2013 in Melbourne.
With a decade of experience assisting private firms, non-profits and government agencies to plan and advance their sustainable development agendas, Sara's career is committed to creating shared value for communities and companies through evidence-based decision-making, risk management and strong stakeholder engagement.
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