Business Case Studies, Executive Interviews, Michael Hopkins on Corporate Social Responsibility

Help
Bookmark
Tell A Friend

Executive Interviews: Interview with Michael Hopkins on Corporate Social Responsibility
September 2007 - By Dr. Nagendra V Chowdary


Dr. Michael Hopkins
CEO and Chairman of MHC International Ltd. (London & Geneva).
He is a part-time Professor of Corporate Responsibilty
Business Performance (VRBP) at Middlesex University Business School
Visitng Professor at Brunel and Geneva Universities.


Download this interview
  • What is the role of regulation in ensuring high standards in Corporate Social Responsibility? Should they be made mandatory? For instance, mandating the companies to devote a certain percentage of their revenue to CSR initiatives?
    The issue of regulation for CSR was, at one time, one of the hottest topics on the CSR agenda. However, the flight from the US for some companies who feared the heavy costs from Sarbanes Oxley has weakened enthusiasm for any new legislation.Yet another argument cited as a common reason given for why new legislation would set CSR back is the lowest common denominator argument.

    This suggests that if there were legislation on CSR, then companies would deliver what the law requires, but never more.

    There are, clearly, both pluses and minuses for CSR regulation:

    Some pluses from legislation:

  1. Would help companies avoid the excessive exploitation of labor, bribery, and corruption
  2. Enable companies to know what is expected of them thereby promoting a level playing field
  3. Since many aspects of CSR behavior are good for business (reputation, human resources, branding, easier to locate in new communities etc.), legislation could help to improve profitability, growth and sustainability
  4. Rogue companies would find it more difficult to compete through lower standards.

   Some minuses:

  1. Additional bureaucracy, with rising costs of observance
  2. Costs of operation could rise above those required for continued profitability and sustainability
  3. Critics already argue that the CSR of companies is simply to make a profit, and legislation would increase the vocalization of these concerns
  4. Reporting criteria vary so much by company, sector, country and they are in constant evolution.

    More and more companies are already focusing voluntarily on CSR issues, but it is clear in the light of the poor corporate governance that resulted in both the Enron and World Com debacles, that some further form of legislation is necessary. I now believe that no regulation is out of the question as is full regulation there is ground somewhere between the two.

    But, the key question remains, who will be the regulator?

    Government? In the USA the Security and Exchange Commission is to play an enhanced role at least as far as something called "corporate responsibility" is concerned. In Europe the EU has already stated its position as being on the side of voluntary which will relieve many anti-EU lobbyists. Only a few nations will in all probability embed CSR principles into national legislation.

    The UN? In emerging economies, we would normally look toward the UN but we know that the UN is not a regulatory body and can only suggest changes to national legislation.

    The Corporate Sector? Like it or not voluntary will be the status quo for the foreseeable future with only a few companies interested in legislation to create a level playing field. Which means that CSR advocates/consultancies, such as our own (MHCi) will more and more become the "unacknowledged legislators of mankind" (with apologies to Coleridge who was referring to poets) in helping companies and governments find their way. And, as The Economist once noted:

    If the market comes to admire honesty, transparency and good corporate governance, executives will rush to acquire those characteristics. Even in morality, the market rules in the end.

  • What is the role of leadership in ensuring high standards in Corporate Social Responsibility? Should he lead from the front? How should a CEO balance shareholders interests and stakeholders interests?
    Over 70% of CEOs surveyed by the World Economic Forum in January 2004 believed that mainstream investors would have an increased interest in corporate citizenship issues (a related, although unclear, concept to CSR). Clearly, if the CEO of a company is not behind CSR, then it will not go very far nor, perhaps, will the CEO!

    A key component of any CEO's contract is, of course, the responsibility that his/her company must perform well on profits. To promote CSR it would be very useful to include in their contract a clear commitment to social and environmental objectives. Given that most CEOs have, on average, four years in their job, such a suggestion will not be popular. The first year is normally spent learning the ropes, the second and third years are when something can actually be done and the fourth year is spent working out a compensation package for his/her untimely removal!

1. Corporate Social Responsibility Case Study
2. ICMR Case Collection
3. Case Study Volumes

Previous 1 2 3 4 5 6 7  8  9  Next

Contact us: IBS Case Development Centre (IBSCDC), IFHE Campus, Donthanapally, Sankarapally Road, Hyderabad-501203, Telangana, INDIA.
Mob: +91- 9640901313,
E-mail: casehelpdesk@ibsindia.org

©2020-2025 IBS Case Development Centre. All rights reserved. | Careers | Privacy Policy | Terms of Use | Disclosure | Site Map xml sitemap