Corporate Social Responsibility (“CSR”) is becoming an increasingly important aspect of boardroom discussion. CSR as defined by the European Commission as:
“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.
Company Secretary - A Significant Player In CSR
An effective CSR program is implemented and supported by corporate levels, oversight mechanisms, training programs and accountability measures. A company secretary, being a vital employee, holds office based on the concept of trust, reflecting the confidentiality of the role. At the same time, the company secretary is the direct nexus to the board of directors, and therefore is suited to playing a significant role in CSR formulation and implementation.
ICSA guidelines state that:
“The company secretary should share responsibility with relevant specialist functions for ensuring that the board is aware of current guidelines in this area and that it identifies and takes account of the significance of corporate responsibility issues in its stewardship and oversight of the company”.
CSR programs help companies ensure that they take note and are responsive to stakeholder concerns. A company secretary is a key figure in the application of best practice in corporate governance, which is increasingly critical to an organisation's reputation and success. It is the role of the company secretary to ensure close review of all legislative, regulatory and corporate governance developments. The application of best practice includes best practice towards the interests of all important stakeholders.
Stakeholders include; shareholders, employees, communities and public officials, who all expect companies to manage, mitigate or prevent social and environmental impacts that may be associated with the company’s activities. CSR is about managing these relationships to produce an overall positive impact on society, whilst still having a successful enterprise.
Many Irish companies acknowledge responsibility for the social impact they have on communities and this is reflected by “giving something back”. These companies can be seen supporting a variety of charitable and social organisations each year.
Unethical Behaviour In Companies
The company secretary is often described as the ‘conscience of the company’. Shareholders expect the board of directors to manage the board in their best interests as a primary responsibility. The company secretary has a duty to act on behalf of the stakeholders for any unethical behaviour.
Failure to address stakeholder concerns effectively can expose companies to a range of risks, resulting in both short-term and long-term consequences. These risks can include loss off access to finance, low employee morale, community opposition and heightened exposure to regulatory fines. Ineffective CSR programs can result in ultimate damage to the reputation of a company, a long-term consequence which is not easily mended.
Identifying Trends & Preferences
The company secretary can play a significant role in CSR formulation and implementation by taking an independent view in identifying trends and preferences from stakeholders and consumers. In addition they can identify future stakeholder expectations with regard to social and environmental performance. Understanding these key elements can help ensure that companies have the capacity to respond to stakeholder concerns they arise. This emphasises the need for companies to have a proactive rather than reactive approach.
Successfully Integrating CSR Strategies
CSR experts stress that the most important underlying principle is to understand how to successfully integrate CSR strategies. Companies need to take a strategic approach that is clearly communicated both internally and externally. Companies are continuing to implement CSR strategies; they are focused on building a long-term commitment to CSR and are learning new ways of implementing these values through the company secretary.