A business group says it is ready to help businesses get more involved in the community - but it wants other business leaders to become involved in the project.
The Business Council for Sustainable Development, chaired by Toyota NZ chairman Bob Field, publishes a three-part report today saying businesses and communities need more help to find out how they can help each other.
The council proposes a new body, tentatively named Business and Community Engagement (BACE), to broker relationships, reduce duplication and “take a seat at the table” when Government and community groups discuss social policy.
“Business has a direct interest as an employer, taxpayer and as a citizen in how well society meets the needs of its members,” Field says in the report.
“Our parent, the World Business Council for Sustainable Development, has a saying, ‘Business can’t succeed in societies that fail’.”
The report re-ignites an old debate on the proper role of business. Business Roundtable director Roger Kerr says charity by individuals is commendable, but managers “shouldn’t be giving away shareholders’ money without their consent”.
“The job of a board or management is to act in shareholders’ interests,” he says.
“They should not be engaged in purely charitable activities of no benefit to the company without the agreement of the shareholders.”
Previous Roundtable publications have argued that competition for profits drives economic growth and that high profits indicate the best areas in which to invest, so, in Milton Friedman’s words, “the social responsibility of business is to increase its profits”.
But the new report says businesses need to be involved in their communities for two reasons - their own long-term interests, and through a moral obligation.
A business’s long-term value lies in its relationships with its suppliers, its staff, its customers and local and central governments, it says.
It thrives best in a society where everyone is skilled, prosperous and trustworthy. “Businesses can’t be indifferent to what happens in low-decile schools - they are their future workforce and customers,” says Business Council chief executive, Peter Neilson.
As well, businesses’ staff were part of society. “Progressive Enterprises says that when there was a cyclone in an island, our staff who had family connections said, ‘Can you do something?”’ Neilson says.
“A human employer is not going to say, ‘No, Milton Friedman tells us we can’t do that.’ They are going to say, ‘How can we help?”’
A Colmar Brunton survey last year found that 64 per cent of New Zealanders felt it was important for them to work for a socially and environmentally responsible business, and 88 per cent said they wanted to buy from such businesses.
But the report says that when chief executives are asked why they get involved in the community, they often reply simply: “Because it’s the right thing to do.”
Hubbard Foods founder Dick Hubbard, whose Businesses for Social Responsibility group was folded into the Sustainable Business Network in the late 1990s, rejects Friedman’s view, saying it widens the gap between rich and poor, leading to more crime and undermining the trust that business depends on.
“If businesses are rough and tough and only interested in maximising shareholder wealth, you will have a society that reflects those values,” he says.
“If you have a business that is ethical, the staff feel they are supporting a cause, not just a brand or shareholder wealth. They will work better, be more innovative, and ultimately the company will prosper more.”
In practice, business involvement in the community is widespread. A Business Council survey last August found half of NZ businesses donate to charities and community groups, and 40 per cent give employees time for volunteering or mentoring.
Three of the four big banks release their staff for volunteering for one or two days a year and the fourth, ASB, allows its staff to volunteer in paid time for its “community partners” such as St John.
A dozen companies partner low-decile schools in a programme run by the Committee for Auckland.
Papakura’s decile 1 Edmund Hillary School has had two accountants from KPMG’s Viaduct Harbour office on its board for three years and receives the firm’s cast-off computers. “There were no computers here before that,” says principal Kataraina Nock. “That will give you an idea of the level of high need.”
Young KPMG graduates volunteer time to do the school’s annual library stocktake.
Through a KPMG board member with a child at King’s College, senior King’s students ran after-school activities at the school twice a week for a year and senior staff from King’s School in Remuera have run professional seminars for the teachers.
KPMG board members have come up with initiatives such as a $500 scholarship for a year eight student each year. The firm donated the first $500.
“So having a business partnership for our school is like having access to a rainbow that we otherwise wouldn’t have, with a pot of gold at the end,” Nock says.
“They don’t give money, they give support.
“They are wonderful people and they bring a strategic level of thinking that is very beneficial in running a school.”
But the Business Council report says many businesses wanting to help have trouble obtaining the information they need to decide who to partner with and what is the best fit.
“There is reported and anecdotal evidence of a sense of fragmentation of knowledge and experience. Shared best practice [on] embedding corporate social responsibility within an organisation is missing.”
Some community foundations such as Acorn in Tauranga and the new Auckland Communities Foundation are filling the gap at a local level, connecting local donors with needy local causes.
The Auckland foundation plans to unveil two initial projects at the end of this month in youth health and affordable housing.
At a national level, the Robin Hood Foundation encourages businesses through the annual Prime Minister’s Social Heroes Awards, won last year by a collaboration of telcos and retailers which collected used cellphones for Starship Hospital.
But it has no paid staff and no longer brokers links between individual businesses and charities.
The report suggests that the new body, BACE, could pick up the brokering role as well as providing “leadership” for business/community collaborations, measuring results and sharing best practice.
The Business Council is talking to the Tindall Foundation about consulting other business groups to develop a “proof of concept” study.
“It’s a function we think is necessary. It could be us, but we haven’t decided who is best placed to do it,” Neilson says.
“The starting point is whether there is enough support for this.”
