Business must take hard look at 'soft' social responsibility issues

Businesses can now face catastrophe if they fail to manage critical issues once regarded as "soft", such as health, the environment, diversity in the workplace, and corporate values and responsibility.

Mr David Grayson, regarded as one of the most respected voices on business social responsibility, told The Irish Times: "There are now a series of issues that, for a long time, many managers have thought of as being 'soft' for business - things like environment, human rights, diversity, work-life balance, health and well-being, and communities. Those soft issues are now hard for business. They're hard to ignore, very hard to manage and very hard if you get them wrong."

If managed successfully, they can be a source of competitive advantage. But if they are ignored, they can lead to business catastrophe. For example: "If you don't know about some of the key components going into your manufacturing business, you could be at risk of being criticised for needlessly polluting.

"Or if you're trying to supply bigger business customers, which themselves now make very strong environmental statements about their own business, those big business customers will require you to be able to prove that you conform to their environmental standards. If you don't, you could be cut off their tender list, lose orders and lose key customers."

If a company fails to articulate its values, or through its behaviour manifests reprehensible values, high-calibre staff can decide to move on. Equally, if a company is discovered to source goods from a disreputable factory overseas where workers are exploited, it can lead to an advertising or public relations disaster.

Mr Grayson is co-founder and director of Project North East - a non-governmental organisation and the longest-established local enterprise agency in Britain. He has been managing director of three charities: the Prince's Youth Business Trust, the Prince of Wales Innovation Trust and Business in the Community. He was appointed by the British government to be the first chairman of its National Disability Council and was awarded the OBE for services to industry in 1994 and the CBE for services to disability in 1999.

His book Everybody's Business: Managing Risks and Opportunities in Today's Global Society, co-authored with Mr Adrian Hodges of the Prince of Wales Business Leaders Forum, was published yesterday by Dorling Kindersley and the Financial Times, costing £20 sterling (€32).

IBEC and Business in the Community Ireland have invited Mr Grayson to present business leaders with the latest thinking on corporate social responsibility. He will address a business after-hours meeting on Wednesday, November 14th at IBEC headquarters in Dublin.

IBEC is a founding member of Business in the Community Ireland, which aims to develop business excellence in the environment, workplace, marketplace and the community. It also provides a channel for companies to donate to worthwhile causes.

The book presents a seven-step model that aims to empower managers to minimise risks and maximise opportunities in today's global society.

A company often starts addressing these important issues after some kind of "trigger", such as a product recall or a customer boycott of products.

Step two involves "marshalling the business arguments for addressing these issues", while the third step charts current critical issues, such as reducing excessive packaging, polluting, human rights, diversity, health and wellbeing, childcare, eldercare or employability.

"You can't, by and large, now in the public or private sector, find employers who can guarantee security of employment for life but what you ought to be able to do is to help people with security of employability by helping them to continue to learn and to continue to acquire new skills, so they are more likely to find alternative work if that is necessary," he says.

Step four involves committing oneself or one's company to action, which could involve implementing UN initiatives on corporate responsibility or working with Business in the Community in Ireland.

Step five concerns developing the strategies to make it all happen. He believes that management systems such as total quality management can be stretched to incorporate more of these emerging management issues.

Step six is about engaging with stakeholders such as workers, customers, local communities or non-governmental organisation to implement the issues.

Step seven is about understanding the impact the business is having, positive and negative, measuring those impacts, reporting on them and using that reporting to trigger off another seven-step cycle.

jmarms@irish-times.ie