Corporate Social Responsibility

Corporate social responsibility, which is closely linked to competitive advantage, is good for business, said Commonwealth Secretary-General Don McKinnon.

Speaking at the Conférence de Montréal (International Economic Forum of the Americas) on social responsibility of businesses on 5 June 2006, Mr McKinnon pointed out that corporate social responsibility benefits employees and their families, the local community and environment, as well as society.

"It's measurable in the 'triple bottom line' of financial, social and environmental performance. It attracts and keeps good staff, builds reputations, differentiates brands, reinforces what we call the 'licence to operate'," stated the Secretary-General.

He said governments can play a role in implementing and enforcing legislation to support the principles and practices of corporate social responsibility, which involves contributing to local community development in places where businesses operate. He noted corporate social responsibility can be encouraged through regulations, penalties and public sector institutions that control business investment or operations. Setting clear policy frameworks to guide business investment in corporate social responsibility and advising on issues such as the disclosure of information, tax incentives and encouraging dialogue with a company's stakeholders, is another way.

Mr McKinnon stated that public resources can be combined with those of business to address corporate social responsibility issues. He added that public support will also go a long way in promoting corporate social responsibility that is being practised by individual companies.

The Secretary-General commended the UK-led Extractive Industries Transparency Initiative in which the Governments of Azerbaijan, Ghana, Kyrgyzstan and Nigeria commit to making public all their revenues for oil, gas and mining. He noted that some companies operating in Commonwealth countries have supported health care in the workplace and community, and offered scholarships for education and skills development.

Mr McKinnon stressed that both corporate governance and corporate social responsibility are significant drivers for economic development, with improved state enterprises leading to improved private enterprises.

In a separate forum on 'Governance and Leadership in Africa' that was held on the same day, the Secretary-General emphasised the importance of good governance and leadership in the development of the continent. While the international community had pledged last year to redouble its efforts for aid, debt relief and trade in Africa, Mr McKinnon highlighted Africa's commitment to plan and implement its own strategies to combat poverty, promote development and deepen democratisation. The aim was to provide just, efficient and transparent government across the continent to serve its citizens.

"Just as Africa was held back for a generation by despotic leaders and corrupt administrations, it now rejoices in a new generation of leaders and markedly better administrations," said the Secretary-General.

He stated that the Commonwealth works to support good governance in Africa through training programmes for public and private sector officials, and through the 'Good Offices' role of the Secretary-General by using diplomacy to prevent or resolve conflicts. He applauded the New Partnership for Africa's Development and its African Peer Review Mechanism but noted that less than half of the African Union countries have signed up to the latter -- with five of the 18 Commonwealth African countries yet to sign up.

Mr McKinnon said the Commonwealth is also promoting leadership in Africa through the Commonwealth Parliamentary Association and the Commonwealth Youth Programme, which assist in capacity-building.