What is the duty of a corporation, and is CSR a necessary and effective part of it?
If you’re Milton Friedman, it’s to make as much money as possible for the shareholders within legal limits.
If you’re Kenneth Arrow, it’s to provide CSR to address externalities on 3rd parties, but still with a preponderant emphasis on profits for shareholders, with some concern for stakeholders.
There’s also the newer view that we’ve discussed in class, that CSR for many companies is largely ineffective, and even more problematically, mostly window dressing. It’s a tacked on program that has no real goals, no real results, and mostly exists because businesses feel that it HAS to exist. However, does this mean it can never be a positive force for good?
Not at all, argues Patrick Moorhead in his recent article on Cisco and their CSR program. In the article, he discusses how the CSR program has been a massive pillar in the tenure of their current CEO, Chuck Robbins. He points out their clear goals and progress, and talks about how it’s run like a real business with actual metrics and actual accountability. Their investments and partnerships with non-profits point towards an actual desire to provide genuine responsibility for all their stakeholders is a key argument he makes.
So, is it THAT perfect? Is Cisco’s model the exact type that companies should be working towards?
Well, not quite exactly. Cisco’s model is excellent, and it has some of the things that any sustainable model within a company needs. It has the clear leadership and support from someone at the top of the chain. It also possesses clear goals, target dates, and perhaps most importantly of all, it possesses transparency. Cisco releases reports on their CSR progress every year and is honest about the places they still need to go. Great, right?
But it’s still lacking the thing I feel separates CSR from what a company should strive to be, and that’s a company-wide sustainability drive that is present everywhere, in every department. The CSR initiative at Cisco is still one small area, one that’s hidden away on their website. While their progress is real, there’s no guarantees that it will stay when the CEO leaves. The philosophy and company-wide acknowledgement of the needs and importance of sustainability. While Cisco’s program may be what CSR needs to be, it’s not what business should strive to be. There’s always progress to be made, but making sure that the philosophy and push for the stakeholder is present through every member of the company, top to bottom, is a necessary but tough step.
Still, I can’t fault Cisco too much. Don’t get me wrong, their CSR program is extremely effective, FOR a CSR program. But CSR is no longer the optimal way forward, and business needs to look ahead to having corporations be just as much about sustainability as they are profits. There’s a ways to go, but Cisco is well on the way.
I would have to agree to the fact that it’s time to incorporate CSR practices all over the company and not just in some segments. It is also very important to create this culture within de departments in such a way that they get so attached and motivated to incur in these practices that, even when the actual CEO leaves and the new one doesn’t put that much attention to this area, they would try to push it forward and include it in the company’s goals. You’re right by saying not only the CEO should be responsible for this and be the main motivator for this, but also all of the employees. As for the fact that their CSR practices and commitments are hidden on their website, I assume they will not be fully willing to show it that much because they might not want to position themselves as that and drag too much attention to that area; I guess they’d rather like to keep their market position as the worldwide leader in IT and, without speaking that much about it, be engaged in social practices. They don’t need to brag about it to everyone out there. As long as people and shareholders involved in this know that they can always count on Cisco for this kind of projects, I think it’s okey to keep that department less exposed to the general public.