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Dr. Eva Latham

Sunday, January 27th, 2013
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Dr Latham, CEO at the Institute for Contemporary Studies and speaker at many conferences, has had extensive experience as consultant to governments and organizations on different issues. She gives BT her view on Corporate Social Responsibility.

 

Q: In our contemporary world people are expecting much of corporations and corporations do understand that. CSR is one of the ways in which corporations are reacting to the new obligations expected of them in the context in which they operate. How do you see this phenomenon?

A: I think it is a very interesting phenomenon which is a result of an increased level of awareness of our collective responsibility as human beings coupled with the fact that the world has become a global village. Fundamentally contributing to this is of course modern technology. The IT Revolution has made the world more connected than ever before, making information available at the click of a mouse or fingertip. We now not only can hear about situations, we can also see situations on our TVs and mobile phones all day long; anyone can produce information and send images the world round, and as the saying goes, “One image is thousand times stronger than words”. Secondly, the continuous development of social media as a consequence of the IT revolution has brought with it exposure of everyone to everyone. Though in itself a positive development, it has its downsides: one is no longer master over one’s situation. Not only individuals but also corporations have become vulnerable in this sense. Many countries are therefore putting privacy laws in place. As a result of being able to see and hear everything in the world and to connect, to speak out, via social media and participating on Youtube and Facebook, etc., the level of consciousness of what is happening around the globe has taken a leap forward and thus also one’s conscience; the call to be responsible and accountable for one’s action as a corporation cannot be denied and corporations do understand that. So they are responding, some even pro-actively to this “revolution of exposure”.

So what are the consequences of this new revolution of exposure for corporations?

Well, it means that corporations have to profile themselves as “good guys” by complying with moral demands from the context in which they operate. A carefully built company profile could be shattered in the blink of an eye via social media if one is not in line with the moral expectations and the ethical standards of the global village. Corporations do understand that and are making great efforts to the cause of human dignity. As a matter of fact it is nothing new for them.

You said that CSR is nothing new for corporations. Could you explain?

Yes. If we see corporations as entities producing a product, then we could compare them with entities which were producing products way before the industrial revolution. In those days the entities were a community of people who not only produced a product and taught their workers to make the product, but it was also the life style of the entity to take care of everyone in the community, to look at the needs of the community and give help where it was needed; it was a people-centered entity for the good of all. Let me put it this way...the focus was not so much primarily on making “profit”, but more on the well being of the community, the inclusiveness, without which the entity could not exist. Think for instance how the guilds operated. So in this sense the predecessors of our modern corporations were always rooted in society and did the good for the benefit of all.

How did this disappear?

This sense of inclusiveness disappeared with the industrial revolution when profit became more important than people and their well being. The contributing factor was the mobility of people and the development of cities, which made face to face contact decrease. Relationships became more anonymous. With that change, the responsibility of the producing entity for its workers, and the community in which it operated, also disappeared. As the entities of production became more complex and more anonymous, there was an almost complete negligence of responsibility for workers by corporations. Labour Unions took over this responsibility for the well being of the workforce. I would call it (on a conceptual level) a sort of compulsory “outsourcing” of responsibility. And as time passed, the focus of corporations not only changed from people to profit, or to product for only profit, but as the raw face of capitalism took front seat, greed became more the focus than even the product. An example we have recently experienced is the bank products introduced to the mortgage market, which were actually just junk products intentionally developed on the basis of greed and not with the intention of making a good product for the well being of the people and the reputation of the corporation. So on the roadmap entering our modern times, some entities, now called corporations, changed from people-centred to product-centred to only profit-centred to greed-centred. Owing to the awareness of human dignity in our modern times, there is no acceptance of corporate behaviour based on greed. Corporations are exposed - more and more by social media - and their reputations are damaged by this behaviour. Society did not always hold corporations responsible for their actions, simply because one does not know what one does not know. Now that information on what is happening in corporations can easily be accessed, people can get to know what they did not know. The information of despicable behaviour by corporations, exposed especially by the social media, has grown exponentially since the IT revolution. Not only governments but also corporations are held to the high standard of human dignity. There has been an increasing demand in society – after WWll - for human dignity for all in the global village. For corporations it means there is a call for them to go back to their roots.

What do you mean by the increasing demand for human dignity after WWll?

It would take some time to explain this thoroughly and give an in-depth analysis with examples worldwide that underpin my view. But let me try to be short and clear in the context of this interview. After WWll certain mechanisms were put in place which were in themselves huge steps for humanity. Implementation of these mechanisms created a new world order and a new civilization: the world went from exclusive thinking to inclusive thinking. The United Nations was established as a platform and the Universal Declaration of Human Rights, the values and norms upon which it functions, was proclaimed. The aim was to make this world a better place by having a frame of reference for inclusive thinking, and a platform to debate issues and interest in that regard. The United Nations came into existence in October 1945 and the Universal Declaration of Human Rights in December 1948. Since then the world has been becoming more and more aware of its obligation to these set of values. Call them moral or ethical values if you will. These values are people-centred and are grounded in the dignity of the human race, the people. The Charter of the UN starts with the sentence: “We the people...” not we the Catholics, or the Buddhists or the Europeans ... These 3 words express the turning point of thinking namely from exclusion to inclusion: we are one people, one humankind. Grounded in the belief in the inherent value of the human person, the message is that all that contributes to enhance human dignity must be done and all that destroys human dignity must be eliminated or avoided. This message has ever since been implemented with growing success. It is a project developing steadily, but there is also resistance the world over, because of ignorance, ethnocentrism, power hunger, greed, etc. The UDHR could be seen as a moral contract between the people and their government requesting governments to honour the dignity of the people. This contract, though all countries are signatories to it, is not binding; it is a strong moral appeal. The decolonization of Africa, for instance, is a direct result of this message where people at last had in the UDHR a weapon to demand their equal rights from the colonizing powers. A more recent massive movement of people demanding their human dignity could be seen in what is called the “Arab Spring”. But also in the field of gender issues, child rights, environmental issues, etc., there is an increasing awareness of the dignity factor. All over the world one can see people standing up for their dignity. equal rights from the colonizing powers. A more recent massive movement of people demanding their human dignity could be seen in what is called the “Arab Spring”. But also in the field of gender issues, child rights, environmental issues, etc., there is an increasing awareness of the dignity factor. All over the world one can see people standing up for their dignity. a mouse (literally a fingertip!), connecting people primarily on issues, irrespective of the traditional borders, beliefs, or national identity, and thus transnational organizations should have the same values in any country they are operating; d) the labour force that enter the organization comes with a sense of expectation that human dignity will also be respected in the organization and even with the expectation that the organization they work for does not do what governments are forbidden to do, thus they are expecting a continuation of the values of the society in the organization. As corporations operate in societies there should be a balance between the pursuit of values in society and in corporations. It is a continuum. After WWll civilization took a turning point, as I mentioned before, and the world community accepted the UDHR as its common frame of reference for behaviour of governments towards its people. Corporations function in a society, so there can be no logical reason to exempt them from being held to the same standards of human dignity the leadership of the country is held to. The UDHR, being that common standard for governing society, could be the same common standard for corporations operating in a society. It is the most perfect Private Public Partnership! Therefore the CSR of corporations should be based on the UDHR

Did you implement your vision in organizations?

Yes, I did. Of course one can only implement that aspect that is relevant to the organization. Nevertheless, the organization can make the UDHR their vision and consequently formulate their mission statement based on that. Grounding the CSR vision of the Corporation in Human Rights means that the organization’s mission is the pursuit of human dignity. All behaviour that does not contribute to that mission should not be undertaken or should be corrected. It is fantastic to see how motivated corporations become when they put their responsibility in the framework of the UDHR.

How did you go about writing your book?

I have written it on the request of CEOs and after debating issues with organizations who I worked for as consultant. I wrote the book long before CSR became a household word. After researching several situations in corporations and analyzing the issues on the table at that time, I came to the conclusion that the solution for many problems is a very simple one and at the same time, as it was so simple, no one thought of it, I suppose. The issues at hand in the organization were all in essence, on the conceptual level, a lack of human dignity in the organization culture. Inside the organizations there were issues of leadership, relationships, conflicts of interest, gender, diversity, environmental is sues and issues of earth resources, but also issues of corruption and integrity. Outside the organizations there were issues related to how the society perceived the organization and the reputation of the organization in the community. After analyzing the situation I brought it all together with the solution in a little less than 80 pages. The solution for CSR is UDHR as the vision for corporations. The rest is common sense. Everyone knows that profit is good, but greed and destroying the environment are wrong. For the diehards that do not comply, rules and regulations need to be in place. I have seen corporations with a huge amount of text declaring their CSR vision, but their practice was not there. Besides, nobody knows in the end what it is about when a vision has to be that many pages. It becomes too complicated, which means it is not an invitation to action. Too much talk!! Too little common sense! I worked for a CEO who was Catholic and he told me after a coaching session: “I got it, my mission statement will be the 10 commandments! Yes, that is short and clear!! But, not everyone in his corporation is Catholic, so he created another problem! Luckily he had a sense of humour and did not see himself as an evangelist to covert the organization, but a CEO for all, regardless of creed. I am of the opinion that in order to get all corporations joining in - not only talking the talk of CSR, but also walking the walk – CSR must be kept inclusive, simple and transparent. So my standpoint is that all corporations should become signatories to the UDHR, make it their vision – the pursuit of Human Dignity - and base their mission statement on that. In doing so corporations Keep it short and simple: KISS!

Now there are many developments in the field of CSR. What could you say about this?

I am aware that the developments in CSR are overwhelming in the sense that there are many definitions, even mutually excluding views, many regulations, many methodologies, many questions as to what constitutes CSR and even more question marks than answers. There is also an increasing awareness of governments towards CSR which is a positive development. Denmark, for instance, has recently introduced a law compelling corporations to add a paragraph on CSR to their annual report stating what the corporation is doing and why, and if the corporation is doing nothing, well then why not. Many corporations are doing that without being compelled by law. What I notice is that some corporations confuse donations to charities or sports with CSR. That is not the same. CSR goes deeper than donations. I would say to make a comparison, CSR is the oxygen of the corporation, a condition sine qua non in order for the corporation to function in a modern society and fulfil the call for dignity...donations are not that compelling! It is nice to do, but not a need to do!!CSR is a need! The European Commission in October 2011 published a new policy on CSR, an action agenda for 2011-2014. The agenda covers eight areas. A report recently published (September 2012) calls for a “European multi-stakeholder (not only shareholder) platform on CSR in relevant business sectors. In 2006 there was the start of a “European Alliance for CSR. Kofi Annan, former Secretary General of the United Nations, founded the Global Compact just before he left the UN. The Global Compact, based on 11 principles - of which some come from the UDHR - encourages corporations to take their CSR. Global compact has many members and it is a good initiative. Asia also has organised itself on this issue and has its own network on CSR. The growing demand of society that corporations fulfil their CSR has also triggered lawmakers to introduced new laws. In the USA, the Dodd- Frank Wall Street Reform and Consumers Protection Act (Financial Reform Act) of July 2010 oblige companies to disclose to the SEC, the source of minerals used in their products such as tin ore (casserite), coltan, wolframite and gold. The reason is, rightfully so, to avoid companies buying these minerals from rebel groups in the Congo. There are many developments which are very encouraging and which show the good will of some corporations.

Do you have hope that CSR will be reached by all corporations?

Of course the world cannot be changed between sunrise and sunset, but the will to go to a new dawn has to be made concrete and measurable. The greed has to be reversed where it is present and corporations have to not only look at their short term goals, but also at their long term needs. I am confident that one day in the near future we will say that “morning has broken like the first morning” and like centuries ago inclusiveness will become a lifestyle for corporations, where CSR is as normal as grandma’s apple pie. Until then there is much innovative work to be done to get everyone, not only corporations, to think out of the traditional box.

Dr Latham can be reached by email: nwives@telfort.nl

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