Round Table - Irkutsk, Russia
April 15, 2003

Remarks by Stuart Money

We have heard presentations today by representatives of both Business and Government Administration on the topic of Corporate Social Responsibility. It is hardly surprising that their perspectives differ and the comments made by them reflect the divergent approaches they take toward the subject. Nor is it surprising that each has very different expectations as to the respective roles of the private and public sectors in the provision of social benefits. Furthermore, it is often the case that the perspectives and expectations of government and business interests may differ from those of other non-governmental community groups and organizations.

It is important to remember that it is a fundamental, and essential, element of business that companies will act in their own best interest. This is obviously true when they are conducting their business affairs, but it is equally true when they are trying to be "socially responsible". It is important that we remember that Corporate Social Responsibility is expensive, and that the primary obligation of the management and directors of companies is to enhance shareholder value. We have heard today from a number of companies about their activities in providing social benefits, in some cases primarily to their own employees, in other cases to the community at large. The range of benefits provided is broad, including the sponsorship of sports teams and charity works, the subsidizing of employee vacations and housing, and the construction and/or financing of medical and educational facilities. Clearly, in the case of benefits provided by companies to their employees, there is a benefit to the employer in doing so. It is obvious that it is in the best interest of the company to ensure that its workforce has access to at least a minimum standard of social benefits, otherwise it may not be able to attract workers (and their families), in the numbers and quality that it requires. If, as is the case in many communities in Russia today, the civil authorities are unable to provide a satisfactory level of social services, often primarily for fiscal reasons, then clearly the employer must incur the expense of doing so:it is simply a cost of doing business in that community.

We have also heard today from companies such as Phillip Morris and BP, both of which make a great effort, and incur a great expense, to be "good corporate citizens". It has been commented that it seems that in the case of companies such as these, which are part of industries that suffer from a significant amount of negative public opinion, the real motivation for being socially responsible is an exercise in Public Relations. This is almost certainly true. Similarly, when we hear about Apple Computers providing 10,000 computers to schools free of charge, it is hard to believe that the true motivation of the company is not to be socially responsible, but rather is to "invest" in creating hundreds of thousands of future Apple computer users, and customers.

I am not sure it is useful to question or criticize the motives of companies when analyzing their approach to Corporate Social Responsibility. The fact is that, regardless of motive, thousands of people enjoy social benefits to which they might not otherwise have access. It is not necessarily a bad thing if companies receive some benefit from their "good works", or that they publicize the fact that they perform them.

When discussing Corporate Social Responsibility, the viewpoints of the public and private sectors will always differ. It seems to me that it is far more important, and useful, to find processes and structures which will acknowledge, and allow for, the different perspectives and needs of companies and the communities in which they exist, and enable them to work together despite their disagreement. This can only happen with effective relationship-building and communication. Effective Corporate Social Responsibility does not necessarily require conformity to the point of view of another, however having an understanding of that point of view is essential. This is a challenge, which is faced by communities and corporations around the world in varying degrees. I hope that the discussions we have had today will be only the beginning of continuing interaction and education which will lead to effective relationships and understanding between corporations and their communities in Russia, and in turn will result in a culture of Corporate Social Responsibility which is not only increased, but is effective and responsive to the needs of both companies and society at large.