CSR and Public Policy: New Forms of Engagement between Business and Government

Abstract

One of the least researched, yet strategically important issues in the emerging field of corporate social responsibility (CSR) is the relationship between CSR and the public policy frameworks or governance context within which companies are operating - locally, nationally and globally. This interface is likely to come under growing scrutiny in the coming years, both by the supporters and critics of business, and by companies and public policymakers themselves. As in other aspects of corporate responsibility, compliance with the law and efforts to be accountable and transparent and to do no harm' should be the starting point for leading companies. At the same time, as the public problems faced by individual nations and by the international community become increasingly complex and intractable, and pose ever greater risks and opportunities for business, there will be a growing need not only for product and process innovation on the part of companies, but also for institutional and policy innovation on the part of governments, non-governmental organizations, and the private sector. In 'discharging their responsibilities to their owners', business leaders will increasingly have to concern themselves with the public good - at least those public goods and issues that influence their business risks and opportunities and are likely to affect the success, security and sustainability of the countries and communities in which their companies operate. The ability to identify and prioritize these public goods and issues, and then determine the best strategies for addressing them, either individually or collectively, will be an increasingly important mark of good business leadership in the years ahead - not replacing, but complementing the ability to remain competitive, productive and profitable. The following paper looks at the challenge for companies operating in situations where there are governance gaps and institutional failures, ranging from repressive and corrupt regimes, to weak public administration, to lack of political will. It illustrates some of the public-private alliances and other institutional innovations that are starting to emerge as a response to these gaps and recommends five actions for companies to consider.