BizWeek, The Star, November 17, 2007

THE corporate social responsibility movement has gained traction in Malaysia, particularly, over the last couple of years. That Prime Minister Datuk Seri Abdullah Ahmad Badawi has given these initiatives his full backing is evident in the fact that he is the patron of the Prime Minister’s CSR Awards.

The inaugural award held last week was organised by the Women, Family and Community Development Ministry. Here, its Minister Datuk Seri Shahrizat Abdul Jalil talks about the importance of corporate responsibility and why companies should not view CSR efforts and profits as a trade-off but an integral part of doing business.

The PM’s CSR Awards is essentially an appeal to the corporate sector to channel part of their profits to the community. Is the Women, Family and Community Development Ministry striking out in a completely different direction in terms of its traditional partnership with the NGO sector?

Welfare and social work, all over the world, have almost always been a shared responsibility between government and civil society. The beauty of it is that the stakeholders have derived both great joy and fulfilment and at the same time been able to promote their companies whilst discharging their social calling on a voluntary basis.
There are no laws to compel anyone
or any establishment to do charity and welfare work. The first priority is for companies to prosper so that they can employ more of our people, give the employees great incentives whether financial or otherwise and, be part and parcel of nation-building. To me that is welfare work too. The government will not shirk in its duties to provide for those in need. Last year, the government spent in welfare aid as much as RM400.6mil and this year almost up to RM437.4mil. Next year we have been allocated RM457.3mil for welfare aid. The Prime Minister has always reminded us about the importance of striking a balance between economic and social development. With our GDP for the year 2006 registering some RM474.4bil, I don’t see why we cannot share this social responsibility with the corporate sector.

Businesses are owned by their shareholders and so any money companies spend on corporate social responsibility programmes are effectively shareholders’ dividends. Shouldn’t they therefore decide for themselves if they want to give to charity?

CSR initiatives do impact on a company’s bottom line and in a very positive way. It does help companies form alliances with its influential stakeholders, like clients and customers, which are part of the community. It also helps in a company’s branding efforts because today heartware is as powerful as a company’s hardware and software.

It is worth investing in CSR projects because businesses and enterprises can grow only if communities are healthy and thriving. Truly, the sharing of one’s corporate wealth, profitability, time, compassion and creativity with the marginalised and those in need, brings with it a sense of fulfilment and “berkat” second to none. So I would say there is indeed a strong business case for CSR.

American Nobel Laureate and economist Milton Friedman once said this about CSR: ‘The social responsibility of business is to increase its profits’. Please comment

Yes, I agree that the first social responsibility of business is to increase its profits for obvious reasons. But it should not stop there.

CSR to me is a win-win situation. Which is why with this prestigious award we hope to encourage more companies to strategise their CSR initiatives. Important as it is, I must emphasise that CSR initiatives is not only about money. You must want to make a difference to the lives of others who are in need.

After 50 years of independence, what do you think the CSR scorecard is looking like for Malaysian companies?

To me, the scoreboard looks very exciting. We know that the corporate sector is already involved in the business of caring. This award is to further encourage a partnership between Community and Corporate Malaysia to harness Heartware for Community Action.
I am confident that companies will rise to the occasion and give honestly and compassionately and with dignity to those in need and make that difference. At the same time, I am certain they themselves will derive great joy and fulfilment from it.

From this year’s list of entries and winners, what can we conclude about the level of CSR in the country?

The response to the award in its first year has been just fantastic and we had some really big companies taking part. We expect next year to be even better now that more companies are aware about what the awards are about and how serious the ministry is about promoting CSR initiatives in the country. On the ministry’s part, we will continue to fine-tune the process and set up more stringent guidelines.

Many government-linked companies in Malaysia have taken on the role of promoting CSR quite actively in recent years. Yet, there appears to be quite a large portion of local companies that are still solely profit-motivated. Do you agree?

That is not entirely true. You’ll find that many small businesses are involved in CSR work, but it’s just that they do not refer to it as such. They call it voluntary work of charity work but they do give back to society in their own way.

The common belief among hard-nosed businessmen is that companies who report on their social responsibility and who undertake comprehensive CSR programmes are losing sight of their core competencies and are becoming too ‘soft’ to be effective as profit-making entities. What view do you hold on this?

I’m afraid I have very strong views on this. It is so passé, outdated and not smart at all to ignore corporate social responsibility. Today the community is the most influential and discerning customer. They don’t like hard-nosed business people who are a slave to profitability only. Unless you own a monopoly, the world is spoilt for choices. Everything else being equal, customers will patronise companies whose branding is strong on corporate social responsibility.

What are the plans for next year? Will PM’s CSR Awards once again bring companies into the spotlight for their community efforts?

This will be an annual event of the ministry. The response for this inaugural award has been very encouraging. I understand from the panel of judges that it was tough for them to do the scoring because the 316 project submissions were all interesting and had something good to tell. It was exciting because the award was primus inter pares – first among equals. I would like to thank all concerned for having made this CSR award meaningful and special. Next year should be an even a better year for everyone concerned.

Like this year, we will work closely with the Economic Planning Unit, which is developing enabling CSR policies that will make the corporate sector-community interface more closely and therefore more meaningfully.