Floods and the business of responsibility

Published: September 14, 2010

Companies are responsible for providing consistent support to flood survivors

These days Pakistan is going through the worst flooding in its history. Even before the floods, most people living in rural areas that have been affected were living in abject poverty. It is the responsibility of companies to participate in and finance projects that address the long term needs and social welfare of the flood victims. Occasional distribution of cheques and commodities is good but much more has to be done – and on a regular basis.

The concept of Corporate Social Responsibility (CSR) is not new in Pakistan. Companies across the country participate in and arrange welfare activities to help the needy by providing them with access to better education, health and shelter.

However, for some companies the CSR programmes are merely  publicity campaigns. This means they organize one event but there is no follow up of any kind. We cannot generalize and say that the same is true for all companies in Pakistan but it is a valid concern.  I think that CSR should not be based solely as a profit venture in the annual report of a company. This is an activity that should be considered completely charitable in nature and not be measured in terms of profit or loss.

What companies need to do

Companies should establish schools, healthcare centers, women empowerment centers and provide entrepreneurship promotion soft loans schemes to assist the people – the consumer base of Pakistan. In the long run this will help promote and strengthen various businesses across Pakistan.

I recommend the following key measures with regards to CSR:

  • Establish a proper CSR-SU (strategic unit). This unit needs to have professionals that must be dedicated to the task of designing projects and implementing them.  This unit must be formed in a way that funding will be recognized as a regular cost of the company and run it as their regular operation.
  • Companies must assign their employees on CSR assignments on a rotation policy of 15 to 30 days on a an annual basis. This will help develop a sense of responsibility in management. This will also enable every employee to be aware of how the company is involved and employees can connect with their consumer base directly.
  • Sometime large funds cannot be generated by a single company. With a CSR Union, the corporate sector can start a fund that needs to be managed by various fund managers. This is how they can multiply their allocation by investing the fund’s money in different profitable and moderately risky businesses. This can be turned as a smart investment and financial solution for CSR budgets to have monies always ready to address any big disaster or an opportunity for social welfare.
  • It has been observed that during national disasters companies provide large funds but they are wasted because NGOs are not equipped to efficiently provide relief since they don’t have easy access to a transportation network, audit of funds supplied and distribution of relief goods etc. In this regard CSR-SU can pool in their top engineering, management, audit and supply chain professionals from various companies to work for rescue, relief and rehabilitation efforts. They need to organize training sessions of their employers to manage this with the national rescue and defense authorities.
  • Companies have to take an aggressive part in education, healthcare and antipoverty efforts. They can run schools, hospitals and research activities for the welfare of society as an integral part of their business. They have to consider this the same cost as the running their factory, mill or workplace otherwise consistency is not be possible.

All of the above suggestions cater to a new mindset for corporate units whereby they consider CSR as an integral part of their business plan rather than merely a substance for corporate social responsibility statement or publicity measure. This shall be beneficial for everyone including companies because a growing population base and social progress leads to a greater consumer base with spending power which in turn is good for businesses.

This article has been revised to reflect the following correction:

Correction: October 11, 2010

An earlier illustration by artist Paul Fitzgerald used in this post has been removed.

saqib.omer.saeed

Saqib Omer Saeed

A financial researcher, analyst and adjunct faculty in CBM, SZABIST, BIZTEK & University of Karachi and blogs at www.bizomer.com

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • Amar Khan

    Excellently put n a serious article. Saqib better email it to companies as they need to be aware on this. CSRSU is a great suggestion, this tends to involvement n a status of formal management activity.Recommend

  • R. Khanzada

    Awesome piece Recommend

  • parvez

    This is what I call a worth while read.
    While reading the article the first thing that came to my mind was ‘that as a business why should I do the above as it effects my bottom line’. You have answered this very well in the last sentence. I wish you had laid more emphasis on explaining this point. Recommend

  • http://www.alphaza.blogspot.com Murtaza Ali Jafri

    Pakistani Companies are adverse to change. But you already knew that. If they can’t get the most basic things in order, why would they focus their resources on stuff like this?

    In Katrina, the fastest most active organization was Walmart; They did it not because they merely cared, but that they could and that the company reflected those values. I doubt our Seth run enterprises care that much. Recommend

  • http://www.bizomer.com Saqib Omer Saeed

    Thanks Mr.Amar, Mr.R Khanzada, Mr.Parvez & Mr. Murtza for your comments.

    Yes I know that companies in Pakistan have some practices that need to be rectified or improved. If folks are not doing what they have to, so we don’t need to worry. Social and business practices will change for positive by consistent efforts and idea development. Change is on move and I am sure that the Pakistan of tomorrow shall be of good values InshaAllah. Our effort and zeal are highly essential. We can not leave thinking, desiring, demanding and working for anything good that people are not convinces to do today. We have to convince them, it is a better way then frustration and hopelessness. We need to show how it is beneficial for them. The way Mr. Parvez has said that we need to focus a point that how it is beneficial for them. Thanks Mr. Parvez. I shall surely elaborate the point in future writings.

    Companies shall also care because the awareness of population is rapidly growing and they shall have no other way then becoming truly socially responsible. I again thank you all because your comments are really valuable for me.Recommend

  • Arshad Khan

    rightly said @Saqib Omer Saeed: Recommend