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    What Makes a Good Deal? The Changing Role of CSR in Corporate Culture

     

     
     
    International Trade Forum - Issue 4/2009, Ian Jarman, Chief Executive Officer, Spring Worldwide Limited

    In the private sector, corporate social responsibility (CSR) programmes are no longer an optional luxury but are becoming an integral part of "good" corporate governance and strategy. There is also a growing recognition and acceptance that collaborative public-private partnerships (PPPs) can deliver mutually desired outcomes. But how to strike a good deal?

    TF: What are the key factors in a successful PPP?
    IJ:
    There are several, but the main priorities are having a clear understanding of your own objectives and those of the other parties, and a mutually acceptable agreement on the desired outcome of the project. There also needs to be a genuine desire and capability to collaborate.

    TF: What are the fundamental components of a successful collaboration?
    IJ: From the outset, there needs to be a realistic understanding of each party's capabilities and a pragmatic commitment to provide the necessary resources to support the partnership. It's also important to have a long-term view of the project with realistic short- and medium-term goals to check and refine progress along the way. Partners have to be able to refer to each other openly, transparently, accountably and frequently to deal with challenges as they arise.

    TF: With so many potentially different agendas, how can you ensure a deal is balanced?
    IJ:
    If the partnership truly understands and believes in the common goal, it will be driven by the collective beneficial solutions and common agreement on the sharing of risks, rewards, strengths and value of the deal in order to satisfy each party's specific objectives.

    TF: Are the legal aspects of PPPs more complex than a single-sector deal?
    IJ: Not really. In any agreement, each party's intentions must be clear so the principles of cross-sector agreements are no different to others. The complexity may arise if the parties' intentions are not evident or well documented from the outset.

    TF: What are some of the most common mistakes you've seen in negotiating PPPs?
    IJ:
    It's important to avoid using a fixed template, having a one-size-fits-all mentality. No two PPPs are the same; every partnership is like a fingerprint - unique in its own way. A CSR programme for a mining company will be very different to that of a retail company, for example.

    TF: What are the emerging trends in CSR?
    IJ: The notion of CSR is rapidly changing. What was considered a specific CSR activity a few years ago is now regarded as integral to a well-run business. Companies are increasingly recognizing the commercial, social, environmental and cultural benefits of taking a more collaborative approach to achieving business objectives.

    TF: Is CSR moving from being something of a public relations exercise to being more integrated in overall business strategy?
    IF:
    Yes, which brings me to another important success factor. In many organizations, CSR has been like a football, kicked around from one department to another. A fundamental mistake is to allocate the CSR budget from one department only instead of allowing the CSR activity to be a golden thread throughout the whole business.

    TF: So CSR doesn't sit comfortably, for instance, in the marketing side of an organization?
    IJ:
    I believe it is best the responsibility of the chairman or chief executive, because it then has a positive impact on all aspects of the business. When a company draws upon all its resources and funding to support a PPP relationship as opposed to it coming out of one department's budget, the PPP is more likely to succeed.

    TF: Is this still true in the context of the global financial crisis? In other words, when money is tight, are CSR activities one of the first things to go, or have they been reasonably protected in most companies?
    IJ:
    The crisis has certainly seen companies' discretionary funds diluted or terminated, but companies that are fully engaged with CSR activities as a driver of their sustainable development are less inclined to adjust spending in this area. In some cases companies have increased spending to consolidate a real competitive advantage.

    TF: What do you believe the role of umbrella groups like the World Economic Forum (WEF) is in terms of global trends and international deals?
    IJ:
    These forums create the opportunity for collaborative projects and cost-efficiencies with multi-stakeholder investors. By sharing common risks, resources (both funds and expertise) and rewards, the potential for achieving solutions and positive outcomes is accelerated.

    TF: Do you think that creates a healthy kind of peer pressure and agenda-setting for particular issues?
    IJ:
    Yes. Having multinational corporations, for example, Google, Microsoft, Nestlé and Adidas, in these business networking groups allows entities such as the WEF to provide a very effective forum to facilitate the healthy homogenization and improved standardization of how companies should operate anywhere in the developed or developing world. 

    Ian Jarman is a commercial intellectual property rights lawyer with more than 20 years of experience designing corporate partnership and sponsorship deals. He has brokered partnerships for global sports bodies and international non-governmental organizations and facilitated partnership negotiations with leading brands including Microsoft, Heineken, British Airways and Ford.