Magazine article New Zealand Management

Thought Leaders : Playing CSR Catch-Up

Magazine article New Zealand Management

Thought Leaders : Playing CSR Catch-Up

Article excerpt

Byline: Leeora Black

New Zealand companies are still grappling with corporate social responsibility issues and have yet to come to grips with the concept and what it means to them. They are well behind Australian companies which have a stronger culture of valuing and investing in CSR.

But they are not alone. The challenges faced by companies in, first of all, defining and understanding corporate social responsibility, getting management buy-in and then implementing and embedding a commitment to social and environmental issues throughout the organisation, are challenges faced by many companies in countries all around the world.

Which might lead to the question that if CSR presents so many challenges, why should companies in New Zealand be interested? The answer: because businesses have huge impacts on the communities and environments in which they operate so in order to reduce risks and maximise opportunities, they must take the initiative and act on corporate social responsibility matters.

Social risk arises when stakeholders see a gap between what they expect a company to do, and what it actually does. They can then take action, as we saw in the case of the Australian company, James Hardie. Hardie faced a coalition of government, medical and union stakeholders and was ultimately forced to a big compensation deal for asbestos sufferers.

So what can New Zealand companies learn about CSR from their further-

advanced counterparts across the Tasman?

The CSR agenda in Australia has been helped by a number of factors. Firstly, while CSR has not been driven in Australia by legislation, there have been two governmental inquiries into the role of CSR within Australia's legal framework in the past few years: the Parliamentary Joint Committee on Corporations and Financial Services and the Corporations and Markets Advisory Committee.

While both inquiry reports supported a voluntary, rather than mandatory, approach to corporate social responsibility, the reports marked a milestone for CSR in Australia: they legitimised corporate social responsibility as an important and commercially sensible path for business to follow. They debunked a primary argument traditionally made against CSR by affirming that company directors can legitimately have regard for a wider set of stakeholder interests than shareholders. …

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