COMMENTS: Doing the right thing

BURSA Malaysia chief executive officer Datuk Yusli Yusoff notes that
local public-listed companies are not doing too well on the corporate
social responsibility index set up by his organisation 18 months ago.
Two-thirds of the companies monitored were not up to scratch, and but a
handful came close to international best standards -- and most of those
were multinationals. Yusli was sanguine about this, observing that "we
are a developing nation" and there was still a need to improve
awareness of CSR.

This would seem contradictory to the rising
public profile of CSR as a measure of a company's value. Hardly a week
goes by without some new CSR initiative being announced. Northport
organises a gotong-royong to clean up Port Klang. Canon Malaysia
donates top-flight equipment to a hospital. Celcom organises a
breaking-of-fast event for KL traffic police. From educational outreach
programmes to helping in the search for missing children, companies are
recognising how CSR activities offer potential dividends in branding
while simultaneously positioning themselves in a more positive light in
the public eye.

This
is useful enough an attitude, but Bursa Malaysia's findings indicate
that most PLCs in this country would be innately more sympathetic with
Milton Friedman's take on the matter, which is essentially that a
company's business is doing business, full stop. Free-market mavens
would always insist that market forces alone eventually take down
deleterious activities and reward sound business practices. They're
probably right, but the invisible hand may take decades, even
generations, to get a beneficial grip on corporate policy. It is
therefore much for the best that the government and business-sector
monitors such as the stock exchange play a proactive role in promoting
CSR, for the benefits this will bring to both the corporate sector as
well as the communities they serve and in which they exist.

In
essence, however, Friedman shouldn't be forgotten. Companies should
recognise that CSR is ultimately measured not in what they do or "give
back" to society, but how they run their businesses, generate their
revenue and utilise their profits. The notion that CSR is a fancy new
moniker for charitable acts and the occasional mock cheque is
erroneous. The operative principle here is the development of business
practices that include community service and social development on a
company's bottom line. The profit motive should remain upheld in these
activities, not held in abeyance. In business, misplaced altruism is
often short-lived.