Corporate Social Responsibility in Russia

David Steer
VP and Director General
Kraft Foods Russia

In my view, corporate social responsibility is a somewhat misunderstood concept. Often it is used a synonym for providing charity to worthy causes. In another extreme, some people try to hold enterprises accountable for curing all manner of social ills by talking about the company’s social responsibilities. To me, CSR is part of the social contract granting the right to do business. It is certainly much more than simple charity, and I see it as having four key components.

Firstly, every company has a responsibility to its customers and consumers to provide quality goods or services. This extends well beyond the point of sale. They must be truthful about their products. There is also a responsibility to act, and be able to react, if something goes wrong with the product, or the consumer legitimately needs help. All too often, companies spend a fortune convincing the consumer to buy their products, but then spend nothing on after sales service or support, or just make it too difficult to complain. Even worse, sometimes quality issues arise, and products need to be recalled or embargoed. Companies who do not have provision to react in these situations need to rethink their concepts of business and responsibility.

Secondly, a company has a responsibility to their people, their staff. This extends in a number of directions. Foremost is to ensure a safe, healthy and fair working environment. Protection from physical, emotional and psychological injury is a must. Company management also have a responsibility to ensure that they do not treat people as commodities, to be engaged or terminated on a whim. I’m certainly not advocating some sort of paternal or fraternal relationship. It certainly does not translate into a responsibility to provide a job by right to anyone, or to carry unproductive people on your books. However, all too often, the person at the bottom of an organization is the first one to feel the impact of poor management decisions or ineffective leadership when they lose their job. Companies should think about the implications of their actions (or inactions) on the people whom they employ.

The third responsibility for any company is to act with integrity. Obeying the spirit as well as the letter of the law must be a part of every company culture. Paying your taxes (not more than you have to, but certainly not less) is a key part of playing your part in society. Observing the rules is critical. If you don’t agree with the rules, seek to have them changed appropriately, rather than pay to shortcut the system. Companies, and the people who lead them in particular, need to be role models in these areas.

The fourth area of CSR is the most common understanding (or misunderstanding) of the term CSR. To make a contribution to the broader social good, through acts of charity and or providing other support for worthwhile causes. This involvement should be altruistic, nonpolitical and sincere. Importantly, this is the one area of CSR that should be voluntary. It should not be the responsibility a company to back stop government on social programs. That is why we pay taxes. However, companies can be an important catalyst to bring attention to issues which otherwise may struggle to get the support of government or the community at large.

For a society to work effectively, all members must be willing to make a contribution and to cooperate in return for the benefits society grants. So, if we want to talk social responsibility, then I also think it is fair to ensure that the people who benefit from responsible company behavior also adhere to some basic standards. Consumers need to avoid fraudulent, petty or malicious claims. Employees should ensure they don’t treat their employer as a charity. Governments have a responsibility to protect and facilitate good business practice, as simply as possible, and not just burden it with regulation.

In short, I believe corporate social responsibility has a much wider definition and relevance to all levels of business than may appear to be the case. As mentioned earlier, it is part of the social contact of doing business. Companies should be free to conduct business in an open, competitive and productive environment. However, companies must also respect the fact that their social responsibilities extend a little further than their shareholders, their profits, and a token amount of charity.