Uncategorised

Drucker was the true father of modern CSR

In 1953, Howard Bowen, known by some as the “father of CSR”, conceptualised the notion as social obligation: “to follow those lines of action which are desirable in terms of the objectives and values of our society”.

Bowen’s work, along with the arguments between Merrick Dodd and Adolf Berle about shareholder versus stakeholder primacy in the early 1930’s, was clearly pioneering.

But I would suggest Peter Drucker is the father of modern CSR.

After all, he combined thoughts on social responsibility with the idea of a future made up of knowledge workers, way before anyone else got there.

His essay “Managing oneself” stands the test of time more than just about anything else I have ever read.

This thoughtful article from the LA Times notes that:

“Peter was talking about this in the 1950s,” or long before corporate social responsibility became a formalized management principle” and:

“Drucker’s most important insight concerned the role of the corporation in society. “The business enterprise is a creature of a society and an economy, and society or economy can put any business out of existence overnight,” he wrote in 1974.

“The enterprise exists on sufferance and exists only as long as the society and the economy believe that it does a necessary, useful, and productive job.””

The current debate about banker pay might not be such an issue if we had listened to Drucker decades back:

“Excessive compensation, he wrote in 1974, is designed to create status rather than income. “It can only lead to political measures that, while doing no one any good, can seriously harm society, economy, and the manager as well.””

For more on Drucker go here.

I’ve been re-reading some Drucker gems as I prepare to begin teaching the CR module of the MSc Corporate Governance and Ethics at Birkbeck, University of London in a couple of weeks.

I’ve got eight weeks, three hours per session, to teach post-graduate students about corporate responsibility. Not much time for such a broad subject.

Here below, is how I am planning to structure it. I’d appreciate any reader comments on what I might have missed. I couldn’t see how to fit SRI in, for example.

Week 1: Introduction to CSR: Theory, Practice and Governance
Week 2: Greenwash, Communications and NGO engagement
Week 3: Business Strategy and Innovation: Social Opportunity
Week 4: Business, Human Rights and the Supply Chain
Week 5: Reading Week
Week 6: Embedding Corporate Responsibility
Week 7: Corporate Responsibility Accounting, Reporting and Auditing
Week 8: Business and Climate Change
Week 9: Corporate Responsibility, Governance and Globalisation

In 2010 I’ll be adapting some of these lectures/seminars for corporate training, as Ethical Corporation launches our training division. At first this will be face to face team or management training, with online offerings to follow later.

We’ll offer a variety of modules for companies to buy access to, with a variety of experts from our network around the world available to deliver executive and management training. If it sounds interesting for your company, please get in touch.


Drucker and Bush: Evidence that opposites can indeed attract

9 Comments

  1. Helen Seibel

    Toby – thanks for this. Great article to read at the beginning of the year – sort of a reminder to always think about who you are, how you work, what you can do to improve etc.
    Good luck with the course! That is a big subject for 8 weeks. How about incorporating SRI as an example of a possible result of embedding CR (week 6) or when considering measures to report against (week 7)?

  2. Thanks Helen. That's a good idea. Best wises for an excellent 2010!
    Toby

  3. Hi Toby — You might find some inspiration in CasePlace, a resource of the Aspen Institute's Center for Business Education. It's a compilation of various teaching materials on business & sustainability.

    http://caseplace.org/

  4. David Chandler

    Hi Toby,
    If governance is central to the course, I think it is important to include a section that deals with the history of the corporation–What is limited liability? What is the principal/agent problem? This challenges students to understand why we have corporations, as opposed to other for-profit forms. It also is a good lead into stakeholder theory, with shareholders only one of many important stakeholders. I use a chapter from John Micklethwait and Adrian Wooldridge's 'The Company' in my classes.
    Good luck with the course.

  5. Hi, Toby — As it happens, I am in the process of structuring a similar course for use here in Thailand.

    One area I don't see mentioned in your list (perhaps because it permeates all else) is that of stakeholder engagement. I see that as the touchstone of CSR: no stakeholder engagement; no CSR.

    For example, a friend recently completed a survey of 20 large Thai and foreign companies here, concluding that since they all talk about CSR, they must all understand it. Yet not a single one had a provision for stakeholder mapping, let alone consultations.

    Ergo, no CSR.

  6. Thank you Toby for pointing me to some stuff I hadn't seen before. (the first couple of links didn't click through by the way).
    I agree with Alex about all stakeholders, not just the NGOs you mention explicitly.

  7. tom

    All very interesting. I did a CSR module as part of my Masters last year. In comparison to the one I did I think your structure is well thought through. As you point out it is incredibly difficult to try to cover everything in just 8 weeks!

    Whilst David's point about the history of the corp is important, I would imagine this will be covered in other modules on corp governance. My main query would be whether you are allocating enough time to look at the origins of CSR and social contract theory that Drucker is in effect advocating.

    Best of luck with it all!

  8. Thanks to all for the comments. Very useful.

    I totally agree on stakeholder strategy and engagement. The idea is that is embedding in every session.

    On social contract theory, that's a good point, thanks, I could probably do a bit more on that as it is so key as you suggest.

    On classic corporate governance, theory of the firm etc, that's been covered in the Corporate Governance module of the overall course, so I am trying not to duplicate teaching that.

    I know caseplace and must go take another look at it.

    These comments have all been incredibly helpful, thanks to all who have contributed.

  9. Anonymous

    Hi Toby,

    I also think Drucker had an enormous influence on the concept of CSR. You can see it directly in accountability standrads (like AA1000). His works are constantly inspiring.

    As for your lectures:
    I definetely agree with Helen – do not omit SRI, it is a very important topic. You can show it as one of the aspects of Corporate Responsibilty that indirectly influences company's market value (as seen by investors). You could incorporate it where Helen suggests and you can also add it to Communication and show how communicating CSR to investors/shareholders/market participants can increase company's reputation and therefore credibility and financial stability. You can also mention criteria by which companies are included (or excluded) in FTSE4Good etc.

Comments are Closed

All rights reserved @ SustainableSmartBusiness

LinkedIn