Monday, February 7, 2011

Do companies have a duty to undertake corporate social responsibilities (CSR) initiatives?

Guest Blogger Andrew Storey - Director of Institutional Relationships & Reporting for The Clinton Health Access Initiative (CHAI) writes...

It’s a question that seems to be increasingly debated in the media and an article in a recent edition of The Economist adds an interesting angle to the debate. ‘Milton Friedman goes on tour’ (January 29th 2011-  Milton goes on tour ) examines a recent report which asked members of the ‘informed public’ (define that as you will because the report certainly seems to, but generally the top quarter wage earners in their particular age groups and countries) what they think of Milton Friedman’s famous assertion that ‘the social responsibility of business is to increase its profits’.

The result of the report suggests that advocates of CSR still have a lot of convincing to do across much of Asia. In Singapore more than 60% of respondents agreed with Mr Friedman, with even greater numbers agreeing in South Korea, Japan, India and the UAE (apparently less than 1 in 5 of the ‘informed public’ in the Emirates would be inclined to disagree with that statement). This is in contrast to attitudes in the West where those in agreement with Mr Friedman seem to be in the minority (although only just in the USA).

Few can suggest that there is anything wrong for a company to seek profits, it’s their raison d’ĂȘtre after all. A well worn statement is that ‘The primary goal of any business is to increase shareholder value,’ but is this really to the exclusion of all other considerations? Need the concept of a business increasing profits and also being socially responsible be mutually incompatible or can a strong CSR program successfully marry these dual aims?

Hewlett-Packard (HP) is a good example of such an organization with a highly successful CSR policy. In November 2010 HP announced an alliance with the Clinton Health Access Initiative (CHAI) that will provide structural and systemic improvements in testing and treating more than 120,000 infants exposed to HIV/ AIDS in Kenya each year. With support from CHAI and the Kenya Ministry of Public Health & Sanitation, HP is investing more than US$1million worth of technology that will capture, manage and return HIV test results in just one to two days after results are ready – a significant improvement from the previous system, which took two to three months. The turnaround time for test results is especially critical, as infants diagnosed with HIV must begin anti-retroviral treatment as quickly as possible to ensure survival. Without immediate treatment, half of HIV-positive infants are unlikely to survive past age two.

In this case HP are partnering with a government and a nongovernmental organization to provide technology and expertise that is not only aligned perfectly with their core skills and abilities, but also is highly targeted and it is no exaggeration to suggest that their support will contribute to saving thousands of children’s’ lives each year. It will be interesting to watch other organizations follow the lead of HP and others as they build on their core skill to successfully find the way to be both highly profitable and have a strong CSR program. Perhaps this and other examples will help convince future survey respondents that businesses need not forget CSR in order to make money.

About the Author.
Andrew Storey is the Director of Institutional Relationships & Reporting for The Clinton Health Access Initiative (CHAI).  CHAI is a global health organization committed to strengthening integrated health systems in the developing world and expanding access to care and treatment for HIV/AIDS, malaria and tuberculosis. CHAI’s solution-oriented approach focuses on improving market dynamics for medicines and diagnostics; lowering prices for treatment; accelerating access to life-saving technologies; and helping governments build the capacity required for high-quality care and treatment programs. Additional information about CHAI is available at

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