Logistics Executive - CEO Executive Series - April 2012

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CORPORATE SOCIAL RESPONSIBILITY...MAGIC OR MYTH?

It was President John Kennedy who said, “A rising tide li!s a"
boats.” but is Corporate Social Responsibility a" it’s cracked up to
be? writes Darryl Judd, COO for Logistics Executive Group.

It has been bandied around as yet another corporate “feel good” that is “trending” at the moment. Corporate Social Responsibility (CSR) is fast becoming an industry in itself, interspersed in corporate frameworks globally, and infused universally in standard business practices. Human Resources units are lavishing large budgets on CSR initiatives in the quest for their holy grail, which is envisioning an engaged employee workforce but does this work? Is CSR good for business on a wider framework?

The Logistics Executive Employment Market Survey 2012 explored these questions and the perception of CSR in the market place. The survey found that whilst CSR was a focus for 74.2% of organizations, the respondents in leadership roles revealed that there were barriers to the wider adoption of CSR in the following areas: Cost, Unclear Benefits and lack of Senior Management Support. This suggests that there is still some confusion at executive level about the commercial benefits of CSR initiatives.

Defenders claim that CSR increases the virtue of the company and employee brand.

For example Human Resources professionals argue that CSR enhances employee engagement and the employee brand. It therefore increases employee retention and enhances talent acquisition strategies.

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Logistics Executive - CEO Executive Series - April 2012

  1. 1. CEO EXECUTIVE SERIES! 27 APRIL 2012CORPORATE SOCIALRESPONSIBILITY NEWS &MAGIC OR MYTH? EVENTSIt was President John Kennedy who said, “A rising tide li!s a"boats.” but is Corporate Social Responsibility a" it’s cracked up to Upcoming Eventsbe? writes Darryl Judd, COO for Logistics Executive Group. 5th Global Logistics and SCM Summit on 30th May 2012 Attended by 250 plus professionals from 30 plus countries, the summit is an intense discussion on strategies for supply chain and logistics management and brings together many global thought and industry leaders. This is a must attend summit by all engaged in supply chain and logistics industry. Held in Dubai, UAE, May 30, 2012. (click here to find out more) Global Logistics and Cargo Symposium 2012 - Malaysia The theme of the symposium “Economic Transformation, Leadership success and Integrity” and it highlights the challenges and opportunities for supply chain, stakeholders in the region as well as showcasing its homegrown best practices in supply chain and logistics management. Held in Kuala Lumper, Malaysia, June 27-28, 2012. (click here to find out more) It has been bandied around as yet another corporate “feel good”that is “trending” at the moment. Corporate Social Responsibility Logistics Executive(CSR) is fast becoming an industry in itself, interspersed in Global Newscorporate frameworks globally, and infused universally in standardbusiness practices. Human Resources units are lavishing large Logistics Executive’s LINKED INbudgets on CSR initiatives in the quest for their holy grail, which is Group hits 10,000 membersenvisioning an engaged employee workforce but does this work? Is Already with a candidate database ofCSR good for business on a wider framework? 80,000 plus Supply Chain and Logistics professionals globally, The Logistics Executive Employment Market Survey 2012 Logistics Executive’s industryexplored these questions and the perception of CSR in the market networking group on LINKED INplace. The survey found that whilst CSR was a focus for 74.2% of recorded a key milestone in April byorganizations, the respondents in leadership roles revealed that becoming one of the few specialistthere were barriers to the wider adoption of CSR in the following groups to exceed 10,000 members.areas: Cost, Unclear Benefits and lack of Senior Management The Logistics Executive LinkedInSupport. This suggests that there is still some confusion at Group is quickly becoming the hub forexecutive level about the commercial benefits of CSR initiatives. global supply chain and logistics experts and is free to join. Defenders claim that CSR increases the virtue of the companyand employee brand. For example Human Resources professionals© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 1
  2. 2. CEO EXECUTIVE SERIES! 27 APRIL 2012argue that CSR enhances compensation. And doing it is a of the concept from the outsetemployee engagement and the breach of their fiduciary duty to and companies acting as theemployee brand. It therefore shareholders, ever y bit as enablers. Clearly definedincreases employee retention and objectionable as using the processes and transparentenhances talent acquisition corporate jet for their own metrics put in place. Thestrategies. pleasure trips”. concept of “social accounting/ The counter argument Of course there is the risk - auditing” practices need to behowever is that most companies or some more cynically would say implemented so that CSRhave yet to put clear measures in scandal avoidance - side of CSR. responsibilities can be linked toplace that can articulate these Consumer activists have used outcomes in meeting the agendasbenefits and the link to CSR. their new-found media clout to of their corporate andThe reality is that shareholders bully corporates into action community s t a ke h o l d e r s .a r e m o r e l i ke l y t o l e a n o n against social injustice. Business Transparency, accountability andexecutives to deliver clear metrics leaders have become painfully ownership by all stakeholders arerelating to profits rather than aware that consumers don’t just the underlying principles herethese soft targets. buy goods these days. No, these and the key to success. The truth is that without days they like to “interact” with It isn’t surprising thereforehard metrics, CSR becomes their favorite brands. They are that Executives are a bitlargely ineffective. According to educated, market sa vvy and resistance to embark on a CSRpolitical scientist Brendan Nyan, demanding. They belong to a program considering that theyit could be argue that CSR is an modern global workforce that has invest their company profits on aeasil y manipulated medium. toppled governments with process that they have little“Much of what passes for CSR is Facebook during the spring control over – as this is largelyjust stroking the egos of senior uprisings and brought major handed over to their staff – andm a n a g e m e n t . Ha v i n g t h e Corporates shamed over poor are often being dictated to oncorporation make contributions business practices. who and how they can doto causes fa vored by senior The only way forward for business by consumer activists.management is, from their point CSR it would seem is through a It is therefore worth asking, whatof view, the best kind of charity, better understanding of this can CSR offer if it is done well?because they get to spend other concept. Companies need to Wejuan Yao, Director forpeoples money rather than their carefully prepare the way before China of Verite last year at theown. (They still get all the glory, implementing their CSR Supply CHIaNA 2011 Businessof course, at those nice Man of programs. Executive decision Summit in Shanghai gave anthe Year dinners and at the m a ke r s n e e d t o b e b e t t e r impassioned presentation oncountry club bar.) Thats not in educated on what a true CSR “Trends in China Labor Relationsthe interest of the corporation, program involves. Employee and the Implications on Supplyits just a form of non-monetary involvement needs to be a driver Chain CSR Issues”. Wenjuan is an example of modern China. She personifies in many ways the human challenges faced by a workforce in an emerging e c o n o m y. He r r e c e n t assignments have seen her consulting to foreign company’s who are trying to m a n a g e t h e i r co r p o r a te image by ensuring the labor conditions of their Chinese suppliers meet requirements. Workers’ conditions are highly topical all over the world and have become a subject of open debate, even in China. Wenjuan provided Above: Findings #om Logistics Executive’s 2011-2012 Global Employment Market Report a new perspective and a voice to what was already a© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 2
  3. 3. CEO EXECUTIVE SERIES! 27 APRIL 2012ner vous murmur at the access staff and moreConference from many large egalitarian teams.corporates in attendance. That “There are some basicis, the dramatic improvements in commonsense r ulesthe Chinese economy that have that can be applied toled to the emergence of a new al l companies f romkind of Chinese worker who is small to large who wisheducated and a lot more aware to ensure their CSRand demanding than previously. meets the rigors and This is an issue about dealing changing demands ofwith change more than anything. t h e m a r ke t p l a c e ”In Wenjung’s words “China’s according to Kime co n o m y, t h e i n te r n a t i o n a l Wi n t e r, C E O o fcommunity, as well as all factories Logistics Executive.have been benefiting from the Of course Kim wouldunlimited and well-disciplined know all about thischeap labor supplies in China subject as he is notover the past 30 year and we are only the founder ofnow facing the turning point. Logistics Executive butWhen the tide goes down, the also the co-founder and Making New Friends. Sponsor Kim Andrews visitscompetition for sur vival will CEO of Oasis Africa, a Oasis Africa in Kiberabecome fierce. Meeting CSR leading charityrequirements may – finally -- organization which prevent the company frombecome a real competitive supports the orphaned children making errors of judgment inadvantage for them in the near of the Kibera slums in Africa. At their suppl y chain that willfuture.” Logistics Executive there is a expose them to undue risk. In this ca se, Wenjung is strong voluntary involvement by These risks may include sourcingacting as the conduit, she is using staff. “Often it’s the giving facet from disreputable suppliers whoCSR policy to build a bridge, of the CSR experience that is the employing workers under poorwhich is creating a new era in most personally rewarding,” says conditions or who are not usingChina’s economic history by and Kim. “It can act as a culturally environmentally sound practices.bringing cohesion through a defining facet for your staff. It This is part of the corporate riskprocess of radical change in gives all of us a sense of purpose management strategy, a defensiveemployment conditions. Of and great pride to tell our story,” a p p r o a c h t o p r o t e c t t h ecourse we don’t all belong to large he continues. The extent of company’s reputation.corporate entities. Successfully Logistics E x e c u t i v e ’s 2.Employer and Corporateimplemented CSR can also be commitment to Oasis Africa also Brand enhancer - An activefound in smaller entities that acts as a brand differentiator with community initiative that ishave the advantage of easier to charity fundraising initiatives and based on philanthropy and aligns events offering with the corporate brand. This a fun and p r o m o t e s t h e c u s t o m e r ’s rewarding part experience of your brand and ties of their client in with their values but it is only experience. effective if employees drive it. In simple terms We n j u a n b r o u g h t i t a l l if Corporate together for ever yone in her Responsibility presentation, by quoting is implemented President John Kennedy who effectively it said, “A rising tide lifts all boats.” acts as a This resonates more than ever b u s i n e s s today as global market growth enabler that a n d n e w te c h n o l o g i e s ke e p can serve two proving that we are all in this main purposes: together. 1.R i s kAbove: New Zealand artist Gabrie"e Pool paints a co"ection A v o i d a n c eto be later auctioned at a fundraiser for Oasis Africa s t r a te g y - To© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 3
  4. 4. CEO EXECUTIVE SERIES! 27 APRIL 2012 Logistics Executive www.logisticsexecutive.com Australia Sydney Phone: +61 2 8262 9800 MelbourneOasis Africa Australia Phone: +61 3 9863 9488www.oasisafrica.net is a not for profit   AsiaAustralia Government registered and Shanghaiaudited humanitarian organization Phone: +86 21 6427 6697established in 2005 to support a small   Singaporegroup of homeless orphaned children Phone: +65 6818 9745found in East Africa’s largest slum, Hong KongKibera, located in Nairobi Kenya. Phone +852 3125 7654Kibera slum is home to over India 1,000,000 people with 50,000 orphans and vulnerable children, has Phone +91 22 4090 7053little or no infrastructure, electricity, running water or sewerage facili-ties, security is poor with no formal policing, government hospitals or Middle Eastclinics, disease is rampant with prevalence of AIDS being more than United Arab Emirates - Dubaidouble the already high average for Sub Saharan Africa. Oasis Africa Phone: +971 4 361 6275was originally initiated to provide schooling access to 50 children and New Zealandcurrently provides ongoing education (primary and secondary), educa- Wellingtontion, food and security to over 1000 young people based on the prem- Phone: +64 4 496 6730ise that education offers a genuine road to freedom from poverty.What are we doing about it? For a copy of the 2012Logistics Executive’s involvement in this project is aligned to its corpo-rate social responsibility mandate and since this time it has maintained Logistics Executive sustainable en- Global Employment gagement through Report email: fundraising events darrylj@logisticsexecutive.com involving many or international sup- kimw@logisticsexecutive.com ply chain and lo- gistics partners that share similar Darryl Judd CSR values. The Chief Operating Officer project continues Logistics Executive Group to build a self-help With more than 20 years of model where the executive experience in Aviation, local community Supply Chain and Logistics takes increasing Transport Industry, Darryl has heldresponsibility for the end to end supply chain upon which the school executive positions within theoperates. airline & aircraft leasing/charter industry and major logisticsOasis Africa Australia’s low cost operating model is based on a plat- organizations.form of skilled logistics and supply chain industry volunteers contrib- He is regularly called upon touting time to run the organization efficiently and engage with industry manage key human resourcespartners who engage in fundraising events and onsite project develop- consulting projects and supportingment and initiation activity in Kibera. Well-planned, high activity and business to drive changes,output supporter trips are made to Kenya annually in coordination particularly around M&A activitywith resource requirement and deployment plans generated by the lo- and international executivecal community. management.© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 4

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