The View from the Boardroom - UNDP Trinidad and Tobago
The View from the Boardroom - UNDP Trinidad and Tobago
The View from the Boardroom - UNDP Trinidad and Tobago
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<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong>- CEO Study on Corporate Social Responsibilityin <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>
‘<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong>’CEO Study on Corporate Social Responsibilityin <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Project ManagerJens-Ulrich Poppen, Ph.D., Democratic GovernanceProgramme Officer<strong>UNDP</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, Curacao, Sint Maarten, Aruba<strong>and</strong> SurinameProject AssistantsRene Berryman-Sheppard, UNV Programme AssistantKaren Seegobin, <strong>UNDP</strong> internProject DirectorEdo Stork, Deputy Resident Representative, <strong>UNDP</strong> <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong>, Curacao, Sint Maarten, Aruba <strong>and</strong> SurinameAuthorJens-Ulrich Poppen, Ph.D.Editorial BoardDr. Ron Sookram, Director for Corporate Responsibility,Arthur Lok Jack Graduate School of BusinessIsele Robinson-Cooper, Social Development ProgrammeOfficer, <strong>UNDP</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, Curacao,Sint Maarten, Aruba <strong>and</strong> SurinamePublication Design <strong>and</strong> ArtworkDesktop Designs & Letters LimitedPrintingEniath’s Printing Company Ltd.United Nations Development Programme<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, Suriname, Aruba, Curacao<strong>and</strong> Sint MaartenUN House, 3A Chancery Lane, P.O.Box 812Port of Spain, <strong>Trinidad</strong>Tel. +1 868 623 7056www.undp.org.tt<strong>The</strong> views expressed in this publication are those of <strong>the</strong> author <strong>and</strong>interviewees <strong>and</strong> do not necessarioly reflect those of <strong>the</strong> UnitedNations or <strong>UNDP</strong>.© 2012 <strong>UNDP</strong> All Rights Reserved.2
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>ContentsForeword................................................................................................................................................................. 4Preface..................................................................................................................................................................... 5Participating CEOs............................................................................................................................................... 6Additional Insights <strong>from</strong> Business Leaders...................................................................................................... 7Acknowledgements............................................................................................................................................... 8Acronyms................................................................................................................................................................ 8Executive Summary.............................................................................................................................................. 9Definitional Questions – CSR <strong>and</strong> Sustainability.........................................................................................12Methodology........................................................................................................................................................14Chapter 1..............................................................................................................................................................17CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?InterviewSharon Christopher, Deputy CEO, First Citizens Bankon Corporate Ethics, Risk Management <strong>and</strong> Morality in Business.......................................................30Chapter 2..............................................................................................................................................................37Government, Consumers <strong>and</strong> Employees – <strong>The</strong> Drivers of CSRInterviewCharles Percy, CEO Methanex <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> Ltd.on Sweat Equity, Corporate Volunteerism <strong>and</strong> <strong>the</strong> Value of Human Capital......................................44Chapter 3..............................................................................................................................................................49<strong>The</strong> Third Sector Revisited – Private Sector <strong>and</strong> Nonprofit PartnershipsChapter 4..............................................................................................................................................................57Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteering3
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>ForewordOver <strong>the</strong> past years, <strong>the</strong> United Nations DevelopmentProgramme (<strong>UNDP</strong>) as an international developmentagency has been most vocal in its advocacy of <strong>the</strong> conceptof Corporate Social Responsibility (CSR) in <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong>. Our position on <strong>the</strong> issue has been always based onour firm conviction that <strong>the</strong> Private Sector has a key role toplay in matters of national development <strong>and</strong> that partneringwith companies <strong>and</strong> business associations should forman integral part of <strong>UNDP</strong>’s approach towards socialdevelopment <strong>and</strong> poverty reduction. While governmentfacilitation of CSR <strong>and</strong> its support for corporate sustainabilitywithin <strong>the</strong> local business community is an important elementof mainstreaming CSR across sectors <strong>and</strong> industries – <strong>the</strong>signing of a joint project for <strong>the</strong> development of a nationalCSR Policy between <strong>the</strong> <strong>UNDP</strong> <strong>and</strong> <strong>the</strong> Ministry of Trade <strong>and</strong>Industry (MTI) in February 2012 illustrates <strong>the</strong> importancethat <strong>the</strong> Government of <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> assigns to itsdirect involvement - <strong>the</strong> extent to which companies havebecome involved in social <strong>and</strong> community development aswell as environmental conservation depends crucially on<strong>the</strong> level of buy-in that CEOs <strong>and</strong> senior managers exhibitfor <strong>the</strong> implementation of CSR activities within <strong>the</strong>ir owncompanies.This report is <strong>the</strong> latest publication in a series ofknowledge products through which <strong>UNDP</strong> has analysed <strong>and</strong>documented important developments in <strong>the</strong> area of CSR <strong>and</strong>sustainable management within <strong>the</strong> national stakeholdercommunity over <strong>the</strong> past five years. While <strong>UNDP</strong> jointly with<strong>the</strong> <strong>the</strong>n South <strong>Trinidad</strong> Chamber of Industry <strong>and</strong> Commerce(STCIC) provided a pioneering situation analysis on CSR in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> with its 2008 CSR Mapping Report,subsequent publications such as <strong>the</strong> ‘Roadmap to CorporateVolunteering – 6 Steps Towards an Employee VolunteerProgramme’ focused on specific facets of <strong>the</strong> sustainability<strong>the</strong>me. <strong>The</strong> opinions, viewpoints <strong>and</strong> personal experiencesof CEOs will crucially inform <strong>the</strong>ir decision-making withrespect to budgetary allocations, integration of sustainabilityissues into overall business strategy <strong>and</strong> to <strong>the</strong> utilizationof CSR-specific criteria within <strong>the</strong> context of individualperformance appraisals to name but a few. <strong>The</strong> survey <strong>and</strong><strong>the</strong> interviews conducted amongsenior managers show that whilesome progress has been madesince <strong>the</strong> publication of <strong>the</strong> 2008 Mapping Report, <strong>the</strong>need for a stronger alignment of CSR with core businessprocesses remains <strong>the</strong> most formidable challenge forcompanies in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>. <strong>The</strong> continuously strongfocus on charitable giving <strong>and</strong> philanthropic engagementmakes <strong>the</strong> lasting “reconciliation of <strong>the</strong> strict profit motive<strong>and</strong> a motive that might be viewed as more altruistic <strong>and</strong>being done to satisfy society” as described in <strong>the</strong> wordsof bpTT President Norman Christie more difficult. O<strong>the</strong>rfindings suggest a promising change in attitudes <strong>and</strong> pointat new avenues for partnering <strong>and</strong> implementation. <strong>The</strong>fact that an overwhelming majority of CEOs welcomes <strong>the</strong>involvement of <strong>the</strong> government in CSR is an encouragingsign that new forms of public-private partnerships may becoming to fruition in <strong>the</strong> foreseeable future.At <strong>UNDP</strong>, we hope that this report will provide usefulinformation about <strong>the</strong> level of CSR ‘sensitization’ in T&Tboardrooms <strong>and</strong> generate food for thought <strong>and</strong> discussionon <strong>the</strong> broad range of issues that form <strong>the</strong> basis for <strong>the</strong>concept of modern sustainability. Particularly with <strong>the</strong>newly gained momentum on <strong>the</strong> part of <strong>the</strong> governmentseeking to utilise CSR to increase <strong>the</strong> attractiveness of<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> as an investment destination, aninsight into <strong>the</strong> thought process of senior businessmen <strong>and</strong>businesswomen on questions of sustainable managementcan only improve <strong>the</strong> quality of both discourse <strong>and</strong>conceptual solutions surrounding CSR. This report willmake an important contribution to <strong>the</strong> ongoing process ofdeveloping a national CSR policy enhancing its researchbase <strong>and</strong> filling a significant knowledge gap about <strong>the</strong>thinking of senior managers with regard to business ethics,sustainable entrepreneurial practice <strong>and</strong> corporate socialinvestment.Dr. Marcia de CastroUN Resident Coordinator <strong>and</strong> <strong>UNDP</strong> Resident Representative<strong>UNDP</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, Curaçao, Suriname, Aruba <strong>and</strong>Sint Maarten4
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Additional Insights <strong>from</strong> Business LeadersDave RamkissoonEIL GroupErrol Le BlancUnicomerJames DeversLaparkanGillian GolahDFL CaribbeanErnie RossRoss AdvertisingBrian PhilipsMediterranean ShippingGary AboudMode LiveBerry Ferdin<strong>and</strong>Bewil Office FurnitureChristian QuesnelResin ConvertersIan ChinapooFirst Caribbean International BankDave AquiJusamcoRikhi RampersadDeloitte & ToucheEric KippsJARICRon MilfordUnipetIndu SharmaGDF SuezJames WilkinsFluor <strong>Trinidad</strong>Dennis EvansCitibankStanley TemproBONSAL CaribbeanAli KhanHilton <strong>Trinidad</strong>James SmithMcCann EricksonJohn Soo Ping ChowAon EnergyWainwright ItonT&T Stock ExchangeJennifer KhanCentury 21 Janitorial ServicesOscar PrietoAtlantic LNGWillard P. HarrisCOLFIREDavid AffonsoHILO Food StoresAllan ClovisKariwak VillageAndre JacelyonANSA McAL <strong>Tobago</strong>Earle BaccusE-IDCOTDaniel ScottAnthony P. ScottJean-Pierre du CoudrayWITCOEdwin H. GoodingEastern Credit UnionCa<strong>the</strong>rine Da SilvaDesktop Designs & LettersJason FreakleyScrip J PrintingKenneth HolderKS Holder ArchitectsSimeon S<strong>and</strong>ifordSANCH Electronics7
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>AcknowledgementsAcronyms<strong>The</strong> United Nations Development Programme(<strong>UNDP</strong>) <strong>and</strong> <strong>the</strong> United Nations VolunteersProgramme (UNV) wish to acknowledge <strong>the</strong>contributions of all <strong>the</strong> participants of thisstudy. Without <strong>the</strong>ir support this report wouldnot have been possible. <strong>UNDP</strong> <strong>and</strong> UNVwould also like to specially thank Mrs. ReneBerryman-Sheppard <strong>and</strong> Ms Karen Seegobinfor assisting in <strong>the</strong> planning <strong>and</strong> preparation of<strong>the</strong> publication. Fur<strong>the</strong>r thanks go to Dr. RonSookram <strong>and</strong> Ms Isele Robinson-Cooper forproviding valuable comments on various draftsof <strong>the</strong> report.ATMCEOCSRFCBMDGsMLSMEMTIAutomated Teller MachineChief Executive OfficerCorporate Social ResponsibilityFirst Citizens Bank LimitedMillennium Development GoalsMinistry of Labour <strong>and</strong> Small <strong>and</strong>Micro EnterprisesMinistry of Trade <strong>and</strong> IndustryNCCNational Carnival CommitteeNGONon-governmental OrganizationSERVOLService Volunteered for ALLSMESmall <strong>and</strong> Medium Size EnterprisesSTCICSouth <strong>Trinidad</strong> Chamber of Industry<strong>and</strong> CommerceTTMA<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> ManufacturersAssociationUNUnited NationsUNVUnited Nations VolunteersProgramme<strong>UNDP</strong>United Nations DevelopmentProgramme8
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Executive SummaryOver <strong>the</strong> past thirty years, Corporate Social Responsibility (CSR) has become anestablished feature in boardrooms across <strong>the</strong> world. <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> has notremained unaffected by such developments <strong>and</strong> <strong>the</strong> Private Sector’s contributionto social development <strong>and</strong> environmental programmes has profoundly changed<strong>the</strong> developmental l<strong>and</strong>scape between Port of Spain <strong>and</strong> Sangre Gr<strong>and</strong>e, Arima<strong>and</strong> San Fern<strong>and</strong>o, Point Fortin <strong>and</strong> Tunapuna. Similar to its role in increasing <strong>the</strong>corporate appeal of CSR in o<strong>the</strong>r parts of <strong>the</strong> world, particularly <strong>the</strong> larger consumermarkets in North America <strong>and</strong> Europe, <strong>the</strong> boardroom also played a crucial rolein driving progress, sensitizing publics <strong>and</strong> mobilizing workforces in support of<strong>the</strong> cause of sustainability in <strong>the</strong> English-speaking Caribbean’s strongest economy.Securing buy-in of senior managers, company owners, chairpersons <strong>and</strong> CEOs forcorporate social outreach activities are crucial pre-requisites for <strong>the</strong> developmentof durable corporate structures that would facilitate <strong>the</strong> implementation of CSRprogrammes. Without <strong>the</strong> backing of senior management for <strong>the</strong>ir companies’involvement in CSR-related issues such as social impact investment, employeevolunteerism, charitable giving, civil society partnerships <strong>and</strong> support for codifiedst<strong>and</strong>ards of corporate ethics, <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>’s Private Sector would havebeen unlikely to broaden its approach towards defining its relationship with widersociety.<strong>The</strong> extent to which CSR was practised by T&T-based companies was firstcaptured in 2008 when <strong>the</strong> <strong>UNDP</strong> in partnership with <strong>the</strong> <strong>the</strong>n South <strong>Trinidad</strong>Chamber of Industry <strong>and</strong> Commerce (STCIC) produced a mapping report thatpainted <strong>the</strong> following picture of CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>:• Focus on Philanthropy, Charitable Giving <strong>and</strong> Public Relations• Existing programs not aligned with national development goals• Limited involvement of government in <strong>the</strong> practice of CSR• Limited collaboration with Civil Society• Little evidence of strategic planning• Limited awareness of <strong>the</strong> business benefits of CSRFour years later, <strong>the</strong> findings of <strong>the</strong> CSR Mapping Report provided <strong>the</strong> backdropfor this CEO report presenting a benchmarking tool that facilitates comparativeanalysis <strong>and</strong> helps to capture progress as well as regress <strong>and</strong> stagnation ofmainstreaming sustainability in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>. In particular, <strong>the</strong> questionabout <strong>the</strong> strategic nature of CSR <strong>and</strong> its closer <strong>and</strong> more programmatic alignmentwith a company’s commercial operations featured prominently in both reportsdocumenting <strong>the</strong> extent to which <strong>the</strong> business community had moved away <strong>from</strong><strong>the</strong> practice of financial h<strong>and</strong>-outs towards more direct involvement in internal<strong>and</strong> external forms of CSR. <strong>The</strong> results of this survey can be summarised asfollows:9
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Strategy• Little evidence for a substantive shift towards morestrategic forms of CSR: While CSR has undoubtedlybecome a more familiar feature within <strong>the</strong> local businesscommunity with a high level of acceptance of <strong>the</strong> idea<strong>and</strong> concept behind <strong>the</strong> practice, <strong>the</strong> commitmentsmade by senior managers towards corporate socialengagement remain largely philanthropic in nature.More than two-thirds of all respondents namecharitable giving <strong>and</strong> events sponsorship as <strong>the</strong> areasthat <strong>the</strong>ir CSR outreach was most reflected in.• Continuously strong focus on public relations <strong>and</strong>reputation management as main drivers of CSR:A fur<strong>the</strong>r indication of <strong>the</strong> unchanged philanthropicnature of CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> is <strong>the</strong> fact thatan overwhelming 96.8% of all CEOs interviewed for <strong>the</strong>report named br<strong>and</strong>, trustworthiness <strong>and</strong> reputationas being among <strong>the</strong> most important drivers for <strong>the</strong>irCSR activities. Only 11.4% mentioned increasedcompetitiveness as a motivating factor for <strong>the</strong>ir socialengagement.• Strategic planning still remains an underdevelopedtool of managing CSR embraced by only half ofall CEOs: A mere 51.4% of all CEOs interviewed for<strong>the</strong> report used a CSR Strategy in <strong>the</strong>ir corporateoperations. This suggests a ra<strong>the</strong>r modest level ofintegrating CSR activities into <strong>the</strong> business planningframework. Such relatively weak readiness for strategicplanning somewhat contradicts <strong>the</strong> assertion made by82.4% of all respondents that CSR was “critical for <strong>the</strong>future success of <strong>the</strong> business”.• <strong>The</strong> link between CSR <strong>and</strong> bottom line performanceremains subject to speculation <strong>and</strong> guess-workra<strong>the</strong>r than being examined through empiricalresearch: 94.3% of all CEOs went on record as sayingthat <strong>the</strong>ir companies have never investigated <strong>the</strong> nexusbetween CSR <strong>and</strong> <strong>the</strong> financial <strong>and</strong> market performanceof <strong>the</strong>ir businesses. <strong>The</strong> apparent lack of interest inmeasuring <strong>the</strong> economic impact of CSR makes <strong>the</strong>evidence-based allocation of resources for corporatesocial investment difficult <strong>and</strong> throws <strong>the</strong> strategicnature of CSR fur<strong>the</strong>r into question.• Reporting on CSR activities has not experiencedany significant improvement: Only 50% of all CEOsinterviewed confirmed that <strong>the</strong>ir companies reportedon <strong>the</strong>ir sustainability management. This suggests awidespread lack of disclosure <strong>and</strong> a ra<strong>the</strong>r unsatisfactorylevel of transparency <strong>and</strong> accountability as share<strong>and</strong>stakeholders are being left without informationregarding compliance with international st<strong>and</strong>ards ofsustainability <strong>and</strong> ethical behaviour.• Most CEOs do not provide financial incentives tomanage performance of <strong>the</strong>ir senior managers in<strong>the</strong> area of CSR: Only 14.3% of all CEOs acknowledged<strong>the</strong> strategic importance of CSR <strong>and</strong> <strong>the</strong> relevance ofsustainability issues for <strong>the</strong>ir company’s commercialsuccess by linking <strong>the</strong> remuneration of senior managerswith <strong>the</strong>ir CSR performance. In o<strong>the</strong>r words, raisingone’s company’s public profile as a socially responsiblecorporate citizen by deepening its societal commitmentthrough successful management does not ‘pay off’.• Promoting CSR through supply chain managementis popular in <strong>the</strong>ory but carried out in practice byonly half of all companies: <strong>The</strong> majority of CEOs(97.1%) have stressed <strong>the</strong> importance of suppliers <strong>and</strong>contractors for <strong>the</strong> promotion of CSR saying that <strong>the</strong>latter should be practised through <strong>the</strong> entire supplychain. However, being asked if <strong>the</strong>ir companies areactively seeking to implement sustainability criteriathrough <strong>the</strong>ir supply chain, <strong>the</strong> number of ‘doers’significantly decreased <strong>and</strong> only 53.1% of all CEOsreplied in <strong>the</strong> affirmative.10
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Drivers• <strong>The</strong>re is broad acceptance by CEOs of governmentinvolvement in CSR: Two-thirds of all CEOs (75.8%)embrace <strong>the</strong> idea of government intervention drivingCSR. This suggests a certain change in <strong>the</strong> traditionallydominant view of <strong>the</strong> business community that CSRshould be based on <strong>the</strong> voluntary commitment ofcompanies given that government intervention canlead to both incentivisation <strong>and</strong> <strong>the</strong> imposition oflegally binding regulatory frameworks. Acceptance ofgovernment involvement includes <strong>the</strong> developmentof a national CSR policy, something that 88.6% ofrespondents would welcome.• CEOs are keenly aware that often <strong>the</strong>ir CSRcommitments <strong>and</strong> <strong>the</strong>ir societal outreach makes<strong>the</strong>m corporate actors that effectively deliversocial services previously provided by government:Business leaders are mindful of <strong>the</strong>ir role as privatesector entities involved in social development whenassisting <strong>the</strong> government with <strong>the</strong> delivery of basicservices to vulnerable groups in society. 68.6% of CEOsthink it to be a correct assertion that <strong>the</strong>y are ‘doing <strong>the</strong>government’s job’ by getting engaged in CSR.• In <strong>the</strong> eyes of CEOs, consumer attitudes in <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong> are, compared to o<strong>the</strong>r countries, lesseffective in bringing about a stronger complianceof businesses with ethical principles: Only 48.6%of CEOs think that a company’s social reputation is anincreasingly important factor in influencing consumers’purchasing decisions. Such cautious attitude towards<strong>the</strong> potential pressure generated by consumers is alsoreflected in <strong>the</strong> 85.3% of all CEOs who believe that social<strong>and</strong> environmental concerns would influence consumerbehaviour to a lesser extent than in o<strong>the</strong>r markets. Andonly 11.4% of respondents named consumers to beamong <strong>the</strong> main drivers for CSR.• CEOs believe that <strong>the</strong> workforce is an essentialdriver for CSR that would prompt <strong>the</strong>m as seniorcorporate decision-makers to become active in<strong>the</strong> field of sustainability: <strong>The</strong> focus of CEOs <strong>and</strong>company owners is firmly on <strong>the</strong>ir employees whenbeing asked to identify <strong>the</strong> most important factorsunderlying <strong>the</strong>ir ‘boardroom’ decision-making onCSR. 71.4% of all interviewees mentioned <strong>the</strong> area ofemployee engagement – comprising internal CSR <strong>and</strong>corporate volunteering – as a top consideration in <strong>the</strong>way <strong>the</strong>ir decisions on CSR activities are being made.Civil Society• <strong>The</strong> voluntary <strong>and</strong> non-governmental sector remainsrelatively weak in its attractiveness as a partnerfor private companies in <strong>the</strong> implementation ofCSR programmes: Only 37.1% of all respondentsmentioned Civil Society as a key driver for CSR in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>. Interviews with CEOs haveshown that corporate support for NGOs exists but thatlimitations in <strong>the</strong> organizational capacity of nonprofitorganizations <strong>and</strong> <strong>the</strong>ir often significant overhead costshas led to a situation in which only a few NGOs havebecome regular partners for private businesses.Corporate Volunteering• <strong>The</strong> personal commitment <strong>and</strong> previous involvementof CEOs in activities of corporate volunteerismdoes not necessarily translate into a greater degreeof ‘professionalization’ of volunteer management:<strong>The</strong> majority of CEOs have previously volunteeredas private individuals (85.7%) as well as in <strong>the</strong>ir roleas employees before joining <strong>the</strong> ‘boardroom’ (91.2%).This level of personal involvement would suggest that<strong>the</strong> majority of companies in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> hadestablished a formal corporate volunteer programme asa consequence. However, only 37.1% of all CEOs saidthat <strong>the</strong>ir companies operated an official employeevolunteer scheme.11
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Definitional Questions– CSR <strong>and</strong> Sustainability<strong>The</strong>re are as many definitions of <strong>the</strong>concept CSR as <strong>the</strong>re are authors<strong>and</strong> analysts. Approaches towardsexplaining <strong>and</strong> defining <strong>the</strong> ideaof corporate societal commitmentunderwent multiple adjustments <strong>and</strong>changes throughout past decades <strong>and</strong><strong>the</strong> advent of conservationist principles<strong>and</strong> environmental concerns broadened<strong>the</strong> thinking about <strong>the</strong> Private Sector’scommitment to <strong>the</strong> public realm.Originating in North America <strong>and</strong>being dominated by U.S.-based authors<strong>and</strong> practitioners, CSR in its early formswas described as <strong>the</strong> “obligations ofbusinessmen to pursue those policies,to make those decisions or to followthose lines of action which are desirablein terms of <strong>the</strong> objectives <strong>and</strong> values ofour society”. 1 And o<strong>the</strong>r authors haveonly intensified <strong>the</strong> focus on issues ofsocial development when <strong>the</strong>y assertthat “in its broadest sense, corporatesocial responsibility represents aconcern with <strong>the</strong> needs <strong>and</strong> goals ofsociety which goes beyond <strong>the</strong> merelyeconomic. Insofar as <strong>the</strong> businesssystem as it exists today can onlysurvive in an effectively functioningfree society, <strong>the</strong> corporate socialresponsibility movement representsa broad concern with business’s rolein supporting <strong>and</strong> improving <strong>the</strong>social order. 2 More recent definitionsrefer directly to a company’sstakeholders whose interests shouldbe a determining factor for corporatebehaviour well beyond mere bottomline considerations. For example, <strong>the</strong>World Business Council for SocialDevelopment has defined <strong>the</strong> conceptas “<strong>the</strong> continuous commitmentby business to behave ethically <strong>and</strong>contribute to sustainable developmentwhile improving <strong>the</strong> quality of life of<strong>the</strong> workforce <strong>and</strong> <strong>the</strong>ir families aswell as of <strong>the</strong> local community <strong>and</strong>society at large”. Many definitionsof CSR are emphasising almostexclusively <strong>the</strong> voluntary commitmentof corporations as free agents <strong>and</strong> donot include anything m<strong>and</strong>atory thatmay result <strong>from</strong> legislative <strong>and</strong> o<strong>the</strong>rregulatory frameworks. <strong>The</strong> historicalevolution of CSR <strong>and</strong> <strong>the</strong> myriad ofdefinitions seem to confirm legendarycorporate responsibility <strong>the</strong>orist DowVotaw’s view that “<strong>the</strong> term [socialresponsibility] is a brilliant one; itmeans something, but not always <strong>the</strong>same thing, to everybody. To some itconveys <strong>the</strong> idea of legal responsibilityor liability; to o<strong>the</strong>rs, it means sociallyresponsible behaviour in an ethicalsense […] many simply equate itwith a charitable contribution”. 3 <strong>The</strong>obvious terminological shortcomingof <strong>the</strong> label ‘CSR’ is its narrow focuson <strong>the</strong> socio-economic dimension ofcorporate outreach addressing pressingsocietal concerns. <strong>The</strong> equally <strong>and</strong>interconnected issue of environmentalprotection with its dominant topicalframework of climate change is notadequately reflected in <strong>the</strong> choiceof CSR as <strong>the</strong> name for companyengagement in <strong>the</strong> non-market specificenvironment. Instead, <strong>the</strong> often citedmodel of <strong>the</strong> ‘Triple Bottom Line’appears to fill <strong>the</strong> conceptual gap moreadequately including <strong>the</strong> environmentalperformance as well as <strong>the</strong> social1 Howard R. Bowen, ‘Social Responsibilities of <strong>the</strong> Businessman’, New York, Harper & Row 1953, quoted in: Archie B. Carroll, ‘Corporate Social Responsibility – Evolution of a Definitional Construct’,Business <strong>and</strong> Society, Vol.38, No.3, p.270.2 Richard Eells <strong>and</strong> Clarence Walton, ‘Conceptual Foundations of Business’, quoted in ibid, p.278.3 Dow Votaw, Genius Becomes Rare’, California Management Review, Spring 1973, Vol.15, p.16.12
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>involvement of corporate entities in its structure. Additionalconceptual approaches have gained in popularity in later yearssuch as Corporate Citizenship, Corporate Social Performance(CSP) <strong>and</strong> Social Impact Investment but are largely dealingwith similar aspects of <strong>the</strong> same <strong>the</strong>matic portfolio eventhough <strong>the</strong>y clearly go beyond <strong>the</strong> basic notion of enlightenedself-interest.Increasingly, companies have adopted <strong>the</strong> label of‘sustainability’ for <strong>the</strong> entirety of <strong>the</strong>ir non-commercialobligations, activities <strong>and</strong> commitments. Sustainability refersmore broadly to <strong>the</strong> various elements that ensure <strong>the</strong> longtermviability of businesses such as issues of anti-corruption,human rights, labour relations, environmental protection <strong>and</strong>business ethics as part of supply chain management as well assupport for social development in fenceline communities. At<strong>the</strong> same time, <strong>the</strong> definition of corporate sustainability makesmore specific reference to <strong>the</strong> area of human development <strong>and</strong>finds its origin in <strong>the</strong> 1987 Report of <strong>the</strong> World Commissionon Environment <strong>and</strong> Development (‘Brundtl<strong>and</strong> Report’)which links <strong>the</strong> goal of poverty eradication <strong>and</strong> <strong>the</strong> urgencyof addressing global underdevelopment to <strong>the</strong> need for largescale<strong>and</strong> long-term economic growth in order to “meet <strong>the</strong>needs <strong>and</strong> aspirations of <strong>the</strong> present without compromising<strong>the</strong> ability to meet those of <strong>the</strong> future”. 4 While this surveycontinues to use <strong>the</strong> term ‘CSR’ in its analysis of seniormanagers’ attitudes <strong>and</strong> thinking on issues of public concern<strong>and</strong> societal involvement of companies, it includes <strong>the</strong>environmental dimension of such concerns <strong>and</strong> is <strong>the</strong>reforeguided by <strong>the</strong> question about <strong>the</strong> full extent of corporate impacton society. With that it positions itself in close proximity to<strong>the</strong> 2011 CSR policy of <strong>the</strong> European Commission in whichCSR is defined as “<strong>the</strong> responsibility of enterprises for <strong>the</strong>irimpacts on society”. 5 In examining CSR among CEOs in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, this report looks at <strong>the</strong> role of businesswithin <strong>the</strong> framework of national development <strong>and</strong> seeks tointegrate issues of community development, environmentalconservation, human rights, working, industrial relations,consumer interest <strong>and</strong> corporate governance into its definitionof corporate responsibility <strong>the</strong>reby roughly reflecting <strong>the</strong>principles of <strong>the</strong> U.N. Global Compact. 64 http://www.un-documents.net/wced-ocf.htm5 http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr/new-csr/act_en.pdf6 In October 2012, <strong>the</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> Bureau of St<strong>and</strong>ards (TTBS) officially adopted <strong>the</strong> ISO 26000 non-certifiable CSR st<strong>and</strong>ard as <strong>the</strong> guidance framework for sustainability issues for <strong>the</strong>local market place. In its own definitional approach, <strong>the</strong> ISO 26000 describes “<strong>the</strong> essential characteristic of social responsibility” as “<strong>the</strong> willingness of an organization to incorporate social <strong>and</strong>environmental considerations in its decision-making <strong>and</strong> be accountable for <strong>the</strong> impacts of its decisions <strong>and</strong> activities on society <strong>and</strong> <strong>the</strong> environment.”13
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Methodology<strong>The</strong> CEO report on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> wasconducted over a six month period between April <strong>and</strong> September 2011. <strong>The</strong> targetsample included 50 CEOs with questionnaires <strong>and</strong> interview requests sent out toa total of 142 companies. This meant that in order to achieve <strong>the</strong> target sample,over-sampling of more than 100% was necessary. A total of 53 CEOs participatedin <strong>the</strong> survey <strong>and</strong> interviews. <strong>The</strong> majority of CEOs – 62.9% - were in <strong>the</strong>ir seniorposition for more than six years <strong>and</strong> only 37% had served for five or less years at<strong>the</strong> time of <strong>the</strong> interview.Since when do you lead <strong>the</strong>company as CEO?22.9%37.1%20.0%20.0%5 years or less6-10 years10-15 years16-20 years<strong>The</strong> companies selected for this study represent a comprehensive blend of eightindustrial sectors. <strong>The</strong>y are:1. Consumer Goods <strong>and</strong> Services2. Infrastructure an d Transportation3. Banking <strong>and</strong> Insurance4. Energy5. Professional Services6. Electronics7. Chemicals<strong>The</strong> participating companies were chosen <strong>from</strong> among both Small <strong>and</strong> MediumEnterprises (SMEs) as well as <strong>from</strong> <strong>the</strong> group of larger national <strong>and</strong> multinationalcompanies. Despite its predominant focus on private companies, four CEOsrepresented companies that are ei<strong>the</strong>r wholly or partially owned by <strong>the</strong> state. Thisdecision was made in recognition of <strong>the</strong>ir importance for <strong>the</strong> national economy.<strong>The</strong> study used <strong>the</strong> categorisation of <strong>the</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> Ministry of Labour<strong>and</strong> Small <strong>and</strong> Micro Enterprises (MLSME) to determine company size. This localtemplate was chosen in order to reflect <strong>the</strong> specific structure of <strong>the</strong> local PrivateSector which, based on total numbers of employees, is dominated by SMEs.14
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Micro Enterprises Small Enterprises Medium Enterprises Large EnterprisesOwner/Manager Owner/Manager Owner/Manager Owner/Manager1-5 employees 6-25 employees 26-50 employees 51+ employeesAssets: Assets: Assets: Assets:< $250,000 > $250,000 – >$1,500,000 > $5,000,000< $1,500,000 - $250,000 – > $5,000,000 > $10,000,000< $ 5,000,000 - < $10,000,000<strong>The</strong> methodology used to conduct <strong>the</strong> study was acombination of qualitative <strong>and</strong> quantitative analysis basedon a) 53 face-to-face interviews with CEOs, Deputy CEOs<strong>and</strong> Managing Directors b) a questionnaire comprising 37questions. This questionnaire included a sections regardingcompany data, <strong>and</strong> dealt with a broad range of sustainabilityaspects such as charitable giving, CSR <strong>and</strong> human resourcemanagement, drivers for CSR <strong>and</strong> corporate volunteering toname but a few.Based on <strong>the</strong> classification of <strong>the</strong> MLSME, 62.9% of allCEOs participating in <strong>the</strong> survey led companies in <strong>the</strong> ‘large’segment followed by 22.9% of small companies <strong>and</strong> 14.3% ofmedium size companies. Almost half of all CEOs presidedover companies with more than TT$100 million annualrevenues (of which 23.5% had a revenue earning capacity ofmore than TT$500 million) followed by 17.6% with revenuebetween TT$20 <strong>and</strong> TT$50 million <strong>and</strong> 14.7% with revenuesfalling within <strong>the</strong> TT$5 to TT$20 million bracket.In which sector does your company operate?I n which sector does your company operate?Communications8.6%Media & 0.0%Electronics2.9%Health & Life 0.0%Utilities 0.0%Professional22.9%Energy11.4%Banking <strong>and</strong>20.0%Automotive 0.0%Chemicals2.9%Infrastructure8.6%Consumer22.9%0.0% 5.0% 10.0% 15.0% 20.0% 25.0%Approximate Annual Revenues (<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>)Approximate Annual Revenues (<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>)In which of <strong>the</strong> following categories does your company fall?In which of <strong>the</strong> following categories does your company fall?> TT$500millionTT$100million - TTTT$50million - TTTT$20million - TTTT$5million - TTTT$1.5million - TTTT$25,000- TT$1.55.9%5.9%8.8%14.7%17.6%0.0% 5.0% 10.0% 15.0% 20.0% 25.0%23.5%23.5%Large (51+employees)Medium(26-50employees)Small (6-25employees)Micro (1-5employees)0.0%14.3%22.9%62.9%0.0% 20.0% 40.0% 60.0% 80.0%15
“Corporate Responsibility is twofold: On <strong>the</strong> one h<strong>and</strong>, companies should be concerned wi<strong>the</strong>nriching <strong>the</strong> environment within which <strong>the</strong>y exist. And by that I mean that <strong>from</strong> a moral point of viewit is obligatory to fertilise <strong>the</strong> soil in which your tree is growing. On <strong>the</strong> o<strong>the</strong>r h<strong>and</strong>, it seems to makesense to be concerned about people that are supporting your enterprise, so that it would be foolishnot to be aware or concerned about those persons on whom you depend.”Gregory Aboud, PresidentDowntown Owner’s <strong>and</strong> Merchants Association (DOMA)16
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> –Strategic Evolution orPreserving <strong>the</strong> Status Quo?CHAPTER 1In 2008, a pioneering study on <strong>the</strong> practice of CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>published jointly by <strong>the</strong> United Nations Development Programme (<strong>UNDP</strong>) <strong>and</strong><strong>the</strong> STCIC (now Energy Chamber) found that in <strong>the</strong>ir social commitments <strong>the</strong>majority of T&T-based companies focused predominantly on <strong>the</strong> philanthropicmodality of Charitable Giving, something that suggested a strong emphasis onreputation management through public relations <strong>and</strong> a ‘h<strong>and</strong>-out’ mentalityunderlying local CSR efforts. At <strong>the</strong> same time, <strong>the</strong> research produced only scarceevidence of any strategic integration of CSR principles <strong>and</strong> considerations intocompanies’ business processes <strong>and</strong> into <strong>the</strong>ir overall planning framework. <strong>The</strong>authors of <strong>the</strong> study concluded that “many programmes <strong>and</strong> projects are fundedon an ad hoc basis resulting in a lack of sustainability <strong>and</strong> alignment with <strong>the</strong>companies’ business plans.” 7Such findings were not confined to<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>’s Private Sectorbut characterised o<strong>the</strong>r Caribbeanmarkets as well. 8 Arguably, CSR hasbecome an increasingly familiarfeature of companies competing in<strong>the</strong> local market place. CEOs acrosssectors <strong>and</strong> industries representingmultinational, larger national as wellas Small <strong>and</strong> Medium Size Enterprises(SMEs) have embraced <strong>the</strong> notionthat in today’s corporate world,sustainable business practices <strong>and</strong> acommitment to <strong>the</strong> public commongood have become a permanentbehavioural reality. <strong>The</strong> launch of<strong>the</strong> ISO 26000 by <strong>the</strong> <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> Bureau of St<strong>and</strong>ards (TTBS)in October 2011 is a case in point forillustrating such growing conviction<strong>and</strong> signaled <strong>the</strong> readiness of <strong>the</strong>local market environment to adoptinternationally recognised st<strong>and</strong>ardsof corporate responsibility. Everysingle CEO interviewed for this reportacknowledged that businesses have aresponsibility for contributing towardssocial wellbeing <strong>and</strong> environmentalsustainability. Seeking to transcend<strong>the</strong> strict separation between <strong>the</strong>moral dimension of wealth creation<strong>and</strong> <strong>the</strong> commercial interest in profitmaximisation, Norman Christie,President of bpTT uses <strong>the</strong> concept ofSustainability to explain his reasoningbehind <strong>the</strong> integration of CSR into hismanagerial decision-making process:“I like <strong>the</strong> idea of long-term thinking.Truly realising what long-term meanspromotes a reconciliation of <strong>the</strong> strictprofit motive <strong>and</strong> a motive that mightbe viewed as more altruistic <strong>and</strong> beingdone to satisfy society. <strong>The</strong> point thatI hold is that <strong>the</strong> two motives canconverge if a person thinks about <strong>the</strong>long-term. When I define ‘sustainable’I define it actually in a way thatcauses <strong>the</strong> convergence of <strong>the</strong> longtermsurvivability of a company orenterprise <strong>and</strong> people <strong>and</strong> <strong>the</strong> planet.”7 Mapping Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Private Sector <strong>and</strong> Sustainable Development’, <strong>UNDP</strong>/STCIC Mapping Project 2007, p.8 <strong>The</strong> Jamaica Employers’ Federation highlighted a similar focus of its member companies on philanthropy <strong>and</strong> charitable giving in its report ‘Corporate Social Responsibility in Jamaica 2007’.See also Fabio Balboni, Wayne Charles-Soverall, Brigette McDonald Levy, ‘New Perspectives on Corporate Social Responsibility in <strong>the</strong> Caribbean’, Caribbean Development Review, No.1, p.27.17
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?companies. Even more CEOs – 91.4%- described CSR as central to <strong>the</strong> longtermeconomic success of a companyra<strong>the</strong>r than being peripheral in itsrelevance for business operations. Thismay be interpreted as an indicationfor <strong>the</strong> growing conviction by seniormanagers <strong>and</strong> business ownersthat an active engagement in CSRactivities has a considerable potentialfor creating significant business valueby opening new markets, tappinginto new segments of consumers <strong>and</strong>developing new product lines. Or it maybe seen as an illustration of <strong>the</strong> beliefthat contributing towards <strong>the</strong> buildingof social capital in communities across<strong>the</strong> country creates <strong>and</strong> maintains<strong>the</strong> conditions for corporate successby safeguarding investments,developing <strong>the</strong> local workforce <strong>and</strong>Is CSR central to <strong>the</strong> long-term economic successof a company ra<strong>the</strong>r than being a marginal concepton <strong>the</strong> periphery of business operations?8.6%91.4%YesNoproviding social infrastructure. DaveRamkissoon, CEO of <strong>the</strong> EIL Groupof Companies, points out <strong>the</strong> nexusbetween social performance <strong>and</strong>commercial value when he says that“when we look at CSR, <strong>the</strong> wordthat comes to mind is connectivity,connecting to <strong>the</strong> whole picture,identifying how it plays an integralpart in defining what success really is“I am on <strong>the</strong> board of <strong>the</strong> United Way <strong>and</strong> one of <strong>the</strong>things that you quickly realize is that you need to getto <strong>the</strong> CEO level to basically drive down <strong>the</strong> process. If<strong>the</strong>re is CEO buy-in <strong>the</strong> staff would usually follow suit.”Dennis Evans, Managing DirectorCitibank <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>as an entrepreneur <strong>and</strong> as a businessentity. To become successful withoutCSR is a misnomer. CSR creates anopportunity to multiply value <strong>and</strong>wealth, not only directly in yourbusiness but in <strong>the</strong> wider community.”Of course, <strong>the</strong> ‘critical’ nature of CSRas perceived by CEOs may also bedue to a growing awareness on <strong>the</strong>part of <strong>the</strong> general public <strong>and</strong> a moreenlightened consumer ‘mindset’ thatcompanies will observe internationalhuman rights st<strong>and</strong>ards, operate inan environmentally conscious manner<strong>and</strong> aid <strong>the</strong>ir fenceline communitiesthat in turn raises an expectation thatcompliance with such behaviouralprinciples will ultimately have apositive impact on <strong>the</strong> bottom line.While <strong>the</strong>re are good reasons to treadcarefully with quick assertions aboutan easily measurable causal nexusbetween <strong>the</strong> degree of a company’sCSR commitments <strong>and</strong> its commercialperformance, it is undoubtedly <strong>the</strong>case that “<strong>the</strong>re are circumstances <strong>and</strong>increasingly so, under which corporateresponsibility is in <strong>the</strong> best economicinterests of a particular company.” 10Such general belief in <strong>the</strong> profitspecificrelevance of ‘doing <strong>the</strong> rightthing’ has become widespread amongmembers of <strong>the</strong> business communityin <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> thus providingsome of <strong>the</strong> necessary elements formaking <strong>the</strong> business case for CSR“I think as corporatecitizens we have adistinct responsibilityto make sure that<strong>the</strong> environment inwhich we operate iswholesome, we treateverybody fairly <strong>and</strong>if we do that <strong>the</strong>reis <strong>the</strong> possibilityof sustainability.O<strong>the</strong>r than that it allimplodes <strong>and</strong> nobodywins.”Wainright Iton, CEO<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> StockExchange10 N. Craig Smith, ‘Consumers as Drivers of Corporate Responsibilty’, Centre for Marketing Working Paper, London Business School, March 2007, p.3.19
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?“As part of our businessmodel ‘each one teachone’ our staff is engagedin outreach programmeswhere you go <strong>and</strong> teachpeople about financialliteracy, so it’s alsocapacity building, it’salso to provide peoplewith information in termsof starting <strong>the</strong>ir ownbusiness. It is businessrelated,it is part of whatwe do <strong>and</strong> it is <strong>the</strong>reforea little different <strong>from</strong> <strong>the</strong>giving of donations <strong>and</strong>charity.”Edwin H. Gooding, CEOEastern Credit Unionra<strong>the</strong>r than embracing sustainablepractices on moral grounds only.Do you believe that <strong>the</strong> management of CSRissue will be critical for <strong>the</strong> future success of yourbusiness?17.6%82.4%YesNoHowever, despite <strong>the</strong> broad acceptanceof CSR among senior managers in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> <strong>and</strong> <strong>the</strong>ir declaredcommitment to <strong>the</strong> public commongood, <strong>the</strong> question remains if since <strong>the</strong>publication of <strong>the</strong> 2008 STCIC/<strong>UNDP</strong>CSR Mapping Report, <strong>the</strong> decidedlyphilanthropic character of companies’social outreach <strong>and</strong> environmentalengagement has changed towards <strong>the</strong>adoption of a more strategic focus inorder to generate truly sustainablesynergy effects on improving <strong>the</strong>country’s societal fabric. After all, it isone thing to express one’s belief in <strong>the</strong>relevance of CSR for <strong>the</strong> bottom line<strong>and</strong> to agree with <strong>the</strong> need for morestrategic CSR but quite ano<strong>the</strong>r tosubsequently act upon such expressedconvictions. <strong>The</strong> former belongs to<strong>the</strong> realm of perceptions <strong>and</strong> attitudes<strong>and</strong> may suffer <strong>from</strong> what is knownas social desirability bias, <strong>the</strong> latterpertains to actual behaviour. Ashift towards strategic CSR wouldmark an important milestone in <strong>the</strong>transformative process of replacing<strong>the</strong> prioritisation of short-termcommercial profits <strong>and</strong> <strong>the</strong> strongemphasis on shareholder valuethrough a more holistic managementapproach in favour of establishingethical legitimacy in <strong>the</strong> eyes of <strong>the</strong>general public, After all, it has beenrightly pointed out that “while it is anaccepted practice for companies to usephilanthropy as a means of improving<strong>the</strong>ir br<strong>and</strong>ing <strong>and</strong> positioning, it doesnot necessarily amount to an effectiveCSR which is about a company’slong-term footprint on society”. 11 Inparticular, <strong>the</strong> strategic alignmentof CSR activities <strong>and</strong> core businessprocesses <strong>and</strong> <strong>the</strong> targeted utilizationof what Dan O’Brien has called‘socially anchored competencies’ offirms constitutes an area that has<strong>the</strong> potential to directly contributetowards <strong>the</strong> company’s competitiveadvantage. 12<strong>The</strong> quantitative results of <strong>the</strong>CEO survey suggest that <strong>the</strong> ideaof what might be called ‘corporatebenevolence’ through <strong>the</strong> practice offinancial ‘gap filling’ <strong>and</strong> donationsstill prevails with 96.8% of allrespondents naming <strong>the</strong> area ofCharitable Giving as <strong>the</strong> activity that<strong>the</strong>ir CSR commitment was reflectedin most often. This was followed by83.9% of CEOs active in <strong>the</strong> area ofsponsorship of campaigns <strong>and</strong> o<strong>the</strong>rpublic events <strong>and</strong> 61.3% engagingin employee volunteering for <strong>the</strong>purpose of community development.<strong>The</strong> strong focus on donations <strong>and</strong>charitable activities deflects <strong>from</strong><strong>the</strong> possibility of forging moretangible <strong>and</strong> sustainable developmentpartnerships <strong>and</strong> suggests that <strong>the</strong>local market <strong>and</strong> wider society stillsuffer countless missed opportunitiesfor a more substantial <strong>and</strong> proactiveinvolvement of commerciallyoperating entities in societal affairs.On <strong>the</strong> o<strong>the</strong>r h<strong>and</strong>, <strong>the</strong> active role of11 Sookram, Ron <strong>and</strong> Surendra, Arjoon, ‘Corporate Social Responsibility in <strong>the</strong> Caribbean Community – Lessons <strong>from</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>’, Advances in Management, Vol.3, No.12, December 2010,p.19.12 Dan O’Brien, Integrating Corporate Social Responsibility with Competitive Strategy’, <strong>The</strong> Centre for Corporate Citizenship at Boston College, p.3.20
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?“Being successful doesn’t just mean to be able to build askyscraper or that you are able to show that you have hundreds ofmillions of dollars in profit. It also can be <strong>the</strong> company’s ability toaffect <strong>the</strong> people around it whe<strong>the</strong>r <strong>the</strong>y are employees, whe<strong>the</strong>r<strong>the</strong>y are <strong>the</strong> communities around <strong>the</strong>m or whe<strong>the</strong>r <strong>the</strong>y areparticular groups that <strong>the</strong> company wants to affiliate itself with.”John Soo Ping, CEOAONemployee volunteers in companies’CSR portfolios as documentedin <strong>the</strong> more than 60% of surveyparticipants responding positively isan encouraging sign that corporatesocial engagement in <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> has clearly become morepro-active, less reliant on financialdonations <strong>and</strong> increasingly employeefocused.At <strong>the</strong> same time, readingsuch findings against <strong>the</strong> results of <strong>the</strong>2009/2010 UNV Survey on CorporateVolunteerism which found onlyone-third of all companies surveyedto be operating a formal volunteerprogramme, suggests that corporateIf yes, was this commitment reflected in:83.9%96.8%61.3%Employee volunteering in communitiesCharitable GivingSponsorship of campaigns, eventsvolunteer activities remain largelyunstructured, organised on an adhocbasis <strong>and</strong> without a long-termperspective that would underline <strong>the</strong>irconceptualisation. 13Defining <strong>the</strong> business case for CSR,71.4% of all CEOs mentioned Br<strong>and</strong>,Trustworthiness <strong>and</strong> Reputation as<strong>the</strong>ir most important consideration in<strong>the</strong> way <strong>the</strong>y determined expectationsabout <strong>the</strong> effect that CSR would haveon <strong>the</strong>ir companies’ commercialperformance. Such strong focuson image, public perception <strong>and</strong>external appearance, however, doesnot suggest a shift towards morestrategic configurations of CSR butra<strong>the</strong>r an approach towards corporateresponsibility that continues to equatecompany engagement in <strong>the</strong> socialarena with <strong>the</strong> work of corporatecommunication departments.Such approach seeks to primarilyensure high visibility of a company’scorporate profile in <strong>the</strong> public <strong>and</strong>consumer sphere through activities<strong>and</strong> interventions that can be easilyintegrated in a company’s publicrelations portfolio. This type of CSR asreputation management has focusedtraditionally on acts of charitablegiving <strong>and</strong> philanthropic engagementswith only few signs of aligning CSRactivities with core business processes.13 ‘Corporate Volunteerism - Developing a Business Culture of Caring in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>’, <strong>UNDP</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, Suriname, Aruba, Curacao <strong>and</strong> Sint Maarten 2011.21
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?“CSR affects yourcorporate image. To <strong>the</strong>extent that your corporateimage that is out <strong>the</strong>re ispositive <strong>the</strong>n one wouldexpect <strong>the</strong>re to be sometype of benefit <strong>from</strong><strong>the</strong> sales perspectivethrough support <strong>from</strong><strong>the</strong> communities. It is<strong>the</strong>refore a good businessdecision as it creates apositive corporate image<strong>and</strong> that should lead tomore people supportingyour company.”Errol Le Blanc, CEOUnicomerSecondly, in overseeing <strong>the</strong>irrespective CSR programmes <strong>and</strong>budgets, 60% of all CEOs mentioned<strong>the</strong> criteria of Employee Motivation<strong>and</strong> Team-Building in defining <strong>the</strong>business case for sustainability action.This result reflects positively on <strong>the</strong>progress seemingly made in <strong>the</strong> area ofinternal CSR <strong>and</strong> in raising awarenessabout <strong>the</strong> business benefits of differentforms of employee engagement suchas corporate volunteerism. Ra<strong>the</strong>rthan seeing investment in employeerecognition, fair labour practices <strong>and</strong>What are <strong>the</strong> most important considerations forhow you define <strong>the</strong> Business case for CSR?11.4%25.7%60.0%71.4%Br<strong>and</strong>, Trustworthiness <strong>and</strong> ReputationEmployee Motivation <strong>and</strong> Team-BuildingIncreased competitivenessLicense to operate in communitiesvoluntary participation of staff incommunity development activities asa financial burden on <strong>the</strong> company,an increasing number of managershave come to appreciate CSR as away to streng<strong>the</strong>n competitiveness,reduce operational costs <strong>and</strong>increase productivity as a result ofimprovements in staff motivation <strong>and</strong>solidified team structures. Thirdlyano<strong>the</strong>r important filter throughwhich CEOs assess <strong>the</strong> value thatCSR can add to <strong>the</strong> commercialsuccess <strong>and</strong> market of <strong>the</strong> criterionof obtaining a License to Operate inCommunities. Such emphasis on <strong>the</strong>importance of securing social accessto local communities highlights<strong>the</strong> ‘environment gatekeeper’ <strong>and</strong>‘peacemaker’ function that corporateinvolvement in <strong>the</strong> developmentof fenceline communities has formany industries <strong>and</strong> business types.Recognising <strong>the</strong> license to operate as amain element of <strong>the</strong> CSR business casecan be seen as an acknowledgementby local businesses of <strong>the</strong> crucialimportance of communal buy-in asit relates to approving <strong>and</strong> accepting<strong>the</strong>ir presence <strong>and</strong> operations on <strong>the</strong>ground. As one executive has put it:“It is this concern about <strong>the</strong> operatingenvironment, <strong>and</strong> a firm’s license tooperate which provides much of <strong>the</strong>impetus for many corporations […]to undertake a broader role in societalaffairs.” 14Securing community support forcommercial operations has <strong>the</strong>potential to help boardrooms,particularly those of multinationalcompanies <strong>and</strong> <strong>the</strong>ir local subsidiariesto reduce <strong>the</strong> costs associated withpossible delays in production <strong>and</strong>extraction caused by social activism,various forms of civil unrest <strong>and</strong>community resistance againstcorporate investment <strong>and</strong> timeconsuminglegal battles. As such,it increasingly seen as a tool for riskmitigation. And finally, 11.4% of allCEOs interviewed for this reportmentioned Increased Competitivenessas an important feature of <strong>the</strong>CSR business case. Such firm-levelcompetitiveness gains through CSRmay be achieved in <strong>the</strong> realms ofcosts savings as well as throughvalue creation in <strong>the</strong> fields of humanresources, customer relations,innovation <strong>and</strong> risk <strong>and</strong> reputationmanagement. 15 <strong>The</strong> relatively lownumber of CEOs whose thinkingabout <strong>the</strong> commercial relevance ofCSR is guided by considerations ofgaining a competitive advantage14 Dr. Gary Dirks, ‘CSR – A <strong>View</strong> <strong>from</strong> BP’, Speech delivered at <strong>the</strong> CSR Forum, held at <strong>the</strong> School of Economics <strong>and</strong> Management, Tsinghua University, China, April 2004.15 See European Competitiveness Report 2008, pp. 107-116.22
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?“If, instead, corporations were to analyse <strong>the</strong>ir prospects for socialresponsibility using <strong>the</strong> same frameworks that guide <strong>the</strong>ir corebusiness choices, <strong>the</strong>y would discover that CSR can be much morethan a cost, a constraint, or a charitable deed – it can be a source ofopportunity, innovation <strong>and</strong> competitive advantage.”Michael Porter <strong>and</strong> Mark Kramerthrough <strong>the</strong> integration of social <strong>and</strong>environmental principles into <strong>the</strong>iroperational frameworks seems to pointat a persistent belief that sustainablepractices are not providing a hardtool for succeeding in <strong>the</strong> marketplacebut merely a soft instrument witha positive effect only on corporatereputation <strong>and</strong> community relations.Among those CEOs in <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> that recognise <strong>the</strong> connectionbetween CSR <strong>and</strong> competitiveness,some associated such convictionwith a fundamental shift in howstakeholders treated with <strong>the</strong> conceptof corporate responsibility. Ali Khan,Managing Director of <strong>the</strong> Hilton<strong>Trinidad</strong>, explained: “I have seenmajor changes over <strong>the</strong> past sevenyears. CSR almost became somethingof a fashion. Sustainability becameyour competitive advantage, how youDoes your company hav a CSR strategy?48.6%51.4%YesNowere responsibly behaving towards<strong>the</strong> environment, towards <strong>the</strong> workers,your vendors, your suppliers <strong>and</strong> howyou were able to show that you havewhat it takes to be responsible towardsgood causes.”While philanthropic approaches in<strong>the</strong> practice of CSR in <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> continue to play a dominantrole, more than half of all CEOs in thissurvey said that <strong>the</strong>ir company utiliseda CSR strategy in its operations(51.4%). Among <strong>the</strong> elements thatstrategic planning frameworks forCSR would traditionally entail arenonprofit partnerships, sponsorships<strong>and</strong> financial donations, reportingrequirements, corporate governance,community investment <strong>and</strong> employeeengagement. This result does notsuggest much improvement over <strong>the</strong>past few years in terms of a strongeralignment of core business processeswith CSR activities (‘Strategic CSR’)when read against <strong>the</strong> 2008 CSRMapping Report which found that30% of all companies had not focusedon such an alignment while 70% werein fact operating within some sort ofstrategic sustainability framework.Fur<strong>the</strong>rmore, having a CSR strategydoes not necessarily mean alignmentof business <strong>and</strong> sustainability portfolioas <strong>the</strong>se strategies may <strong>and</strong> oftendo exist in isolation without beinginterconnected. One of <strong>the</strong> reasonsfor <strong>the</strong> problem of misalignmentof CSR <strong>and</strong> business <strong>and</strong> for <strong>the</strong>persistently strong emphasis on cashgrants, material donations <strong>and</strong> <strong>the</strong>irpublic relations effects can be foundin <strong>the</strong> phenomenon of ‘distributiveoverstretch’ which means that acompany seeks to support a myriad ofsocial causes with an only limited CSRbudget. This approach of ‘h<strong>and</strong>ingout to all <strong>and</strong> sundry’ is often basedon an eclectic choice of causes <strong>and</strong>beneficiaries without paying sufficientattention to <strong>the</strong> company’s competitivecompetencies when seeking to satisfyexpectations of a maximum numberof aid recipients. In such a scenario,no strategic choices for corporatesocial investment are being made<strong>and</strong> no prioritisation of allocatedresources is taking place. <strong>The</strong> abilityto document, highlight <strong>and</strong> ultimatelymeasure <strong>the</strong> economic impact of CSR<strong>and</strong> <strong>the</strong>reby illustrate <strong>the</strong> relevance ofsocial engagement for <strong>the</strong> bottom linedetermines <strong>the</strong> conceptual solidity of<strong>the</strong> business case. Arguably one of <strong>the</strong>most challenging aspects of CSR thatvery few companies in <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> have tried to investigate is toestablish a causal nexus between <strong>the</strong>irsocial investment <strong>and</strong> <strong>the</strong>ir financialperformance. According to <strong>the</strong> survey,<strong>the</strong> overwhelming majority of CEOs– 94.3% - have never undertakencompany-internal analyses of <strong>the</strong> oftenclaimed link between CSR <strong>and</strong> <strong>the</strong>company’s competitive performancein <strong>the</strong> market.23
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?Case StudyWe started our journey with that home byentering into a tripartite relationship with <strong>the</strong>state <strong>and</strong> <strong>the</strong> church. What we brought to <strong>the</strong>table was an ability to do things so we firstencouraged just to give, give some money. Butwhen we looked at <strong>the</strong> state of affairs <strong>the</strong>remore than money was required. <strong>The</strong> state of<strong>the</strong> facility was just totally unacceptable, itwas a decrepit facility, it shouldn’t have beenhousing children <strong>and</strong> <strong>the</strong> administration of <strong>the</strong>facility required improvement. We <strong>the</strong>reforeacquired <strong>the</strong> l<strong>and</strong>, we demolished <strong>the</strong> oldbuidings <strong>and</strong> rebuilt <strong>the</strong> entire facility intoa modern facility. We project managed, wemade sure that capital was spent efficiently,we project managed large plant facilities sothat was a core competency that we broughtto <strong>the</strong> table. And <strong>the</strong>n we encouraged anemployee to be an active board member <strong>and</strong>set out to look at what was good governancefor <strong>the</strong> home to make sure it was properlygoverned <strong>and</strong> that <strong>the</strong>re were controls. <strong>The</strong>nwe partnered with <strong>the</strong> Church to make surethat <strong>the</strong>y were providing <strong>the</strong> care givers, that<strong>the</strong>re was appropriate training, appropriatedevelopment etc. We lobbied <strong>the</strong> governmentfor subventions to make sure that <strong>the</strong>y weredoing <strong>the</strong>ir part. We became a prod to <strong>the</strong>government <strong>and</strong> used our corporate leversto get <strong>the</strong>m to do what <strong>the</strong>y needed to do.We have a clear vision of where we want toget to when we partner <strong>and</strong> what our endstate is <strong>and</strong> <strong>the</strong>n we set up our activities ina methodical <strong>and</strong> well planned way to get tothat end state.”Eugen Tiah, CEOPhoenix Gas Park Processors Ltd.Have you ever undertaken company-internalanalysis regarding <strong>the</strong> link between CSR <strong>and</strong>financial <strong>and</strong> market performance?94.3%5.7%YesNo<strong>The</strong>oretically, increasing profitsthrough socially responsible actioncould take different forms. Forexample, corporate volunteerprogrammes could lead to improvedstaff morale which in turn wouldcause an increase in productivitylevels. Ano<strong>the</strong>r example of a causalchain leading to financial gains wouldlie in <strong>the</strong> area of ethically produced<strong>and</strong> traded products with its impacton consumer behaviour <strong>and</strong> consumerchoice. <strong>The</strong> latter is often informedby <strong>the</strong> adherence of corporations toethical norms <strong>and</strong> st<strong>and</strong>ards in <strong>the</strong>sourcing of its raw materials <strong>and</strong> <strong>the</strong>manufacturing <strong>and</strong> distribution of itsgoods. If <strong>and</strong> when such consumerattitudes – ethical consumerism- translate effectively into actualpurchasing decisions <strong>and</strong> <strong>the</strong>reforeconstitute a behavioural reality, <strong>the</strong>company will commercially benefitthrough increased sales.Reporting on corporate sustainabilityactivities is ano<strong>the</strong>r important featureof strategic CSR. In <strong>the</strong>ir 2008 STCIC/<strong>UNDP</strong> CSR Mapping Report, <strong>the</strong>authors concluded that “apart <strong>from</strong>large companies <strong>from</strong> <strong>the</strong> Energy24
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?<strong>and</strong> Related Industries sector <strong>and</strong>Finance <strong>and</strong> Real Estate sectors, <strong>the</strong>reis generally a lack of disclosure as itpertains to reporting <strong>and</strong> accountingfor social <strong>and</strong> environmentalprogrammes <strong>and</strong> o<strong>the</strong>r CSR-relatedactivities. 16 As far as reportingon <strong>the</strong>ir social <strong>and</strong> environmentaloutput in addition to <strong>the</strong>ir economicperformance is concerned – somethingthat is sometimes labelled ‘TripleBottom Line Reporting’ or ‘IntegratedReporting’ 17 - only 50% of all CEOsinterviewed in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>confirmed <strong>the</strong> use of such reportingtools. <strong>The</strong> findings of ano<strong>the</strong>r recentstudy specifically examining <strong>the</strong> levelsof corporate governance disclosureconfirm such ‘modest’ reportingprofile. 18 Reporting on CSR activities<strong>and</strong> performance serves a number ofpurposes. It provides vital informationon a company’s annual sustainabilityrecord to workforce, investors,customers, government officials, civilsociety while increasing transparency<strong>and</strong> accountability. Regular <strong>and</strong>comprehensive reporting on keyIs your company reporting on its CSRactivities?50.0%50.0%YesNoCSR criteria helps to demonstratethat <strong>the</strong> principles of ethicalbusiness practices <strong>and</strong> responsiblemanagement are seen by managers asmore than just corporate ‘lip service’<strong>and</strong> that companies deliver on <strong>the</strong>ircommitments as initially set out in<strong>the</strong>ir business <strong>and</strong> communicationplans <strong>and</strong> as conveyed to <strong>the</strong>general public in advertisements<strong>and</strong> marketing campaigns. As such,reporting is an important instrumentto assure stakeholding individuals<strong>and</strong> organisations about a company’sdetermination to adhere to national<strong>and</strong> international st<strong>and</strong>ards, norms<strong>and</strong> rules <strong>and</strong> to build trust aroundits corporate image <strong>and</strong> identity.<strong>The</strong> absence of regular sustainabilityreporting <strong>from</strong> <strong>the</strong> Private Sectorsuggests that CEOs have still not fullygrasped or accepted <strong>the</strong> strategicvalue <strong>and</strong> bottom-line relevance ofCSR. In many o<strong>the</strong>r markets bo<strong>the</strong>merging <strong>and</strong> Western-industrial,international reporting frameworks<strong>and</strong> documentation guidelinessuch as <strong>the</strong> UN Global Compact’sCommunication on Progress process,<strong>the</strong> Global Reporting Initiative, <strong>the</strong>AccountAbility 1000 St<strong>and</strong>ard, <strong>the</strong>FTSE4 Good Index <strong>and</strong> <strong>the</strong> SocialAccountability SA 8000 St<strong>and</strong>ard havebecome widely used <strong>and</strong> accepted aidsfor presenting facts <strong>and</strong> supplyinginformation regarding companies’sustainability performance. Disclosurewithin such frameworks goessignificantly beyond a mere listingof projects instead containing dataregarding strategy, managementsystems <strong>and</strong> performance indicatorsas well as with respect to stakeholderexpectations. <strong>The</strong>y seek to highlight<strong>and</strong> measure <strong>the</strong> impact that acompany’s social <strong>and</strong> environmentalinvestment has made in communities<strong>and</strong> <strong>the</strong> information contained in suchreports is often quality-controlled <strong>and</strong>verified through third party assurance.<strong>The</strong> relatively weak state of CSRreporting in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>with only half of all CEOs interviewedconfirming any kind of disclosuremeans that <strong>the</strong> corporate governanceremains a significant challenge in <strong>the</strong>country’s boardrooms.Even less common in <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> boardrooms is <strong>the</strong> practiceof acknowledging <strong>the</strong> strategicimportance of CSR issues, principles<strong>and</strong> objectives by including a linkbetween individual performance withregards to social <strong>and</strong> environmentalindicators <strong>and</strong> <strong>the</strong> remuneration ofmanagers including that of CEOs intoa company’s overall business strategy.If understood as a contribution tocorporate value creation <strong>and</strong> to <strong>the</strong>long-term survivability of a companyin <strong>the</strong> marketplace, managerialperformance in <strong>the</strong> environmental<strong>and</strong> social realm should arguablydetermine levels of executiveremuneration as much as bottom-linedelivery.Is <strong>the</strong> remuneration of your senior managers linkedto CSR performance?85.7%14.3%YesNoAsked about <strong>the</strong> link between <strong>the</strong>ircompanies’ remuneration policies <strong>and</strong><strong>the</strong> CSR-relevant performance of <strong>the</strong>irsenior managers, only 14.3% of allCEOs confirmed such a connection.16 See CSR Mapping Report, p.viii.17 See for example <strong>the</strong> Connected Reporting Framework of <strong>the</strong> Prince of Wales’ Accounting for Sustainability project www.accountingforsustainability.org18 Using <strong>the</strong> Experts on International St<strong>and</strong>ards of Accounting <strong>and</strong> Reporting (ISAR) as a basis for its investigation <strong>and</strong> sampling a total of 31 large companies listed on <strong>the</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> StockExchange, <strong>the</strong> report finds that “<strong>the</strong> average enterprise <strong>from</strong> <strong>the</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> sample to be disclosing less than half of <strong>the</strong> items in <strong>the</strong> ISAR benchmark”. It stresses that “while <strong>the</strong> samplehas relatively high rates of disclosure for a few topics […] with most companies exceeding <strong>the</strong> relatively few disclosure requirements of <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> rules, <strong>the</strong> overall level of disclosureremains low compared to o<strong>the</strong>r emerging markets”, in: ‘Corporate Governance Disclosure in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – A Case Study by Syntegra Change Architects of <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>’, p.5;Paper presented to <strong>the</strong> United Nations Conference on Trade <strong>and</strong> Development, Intergovernmental Working Group of Experts on International St<strong>and</strong>ards of Accounting <strong>and</strong> Reporting, producedunder <strong>the</strong> overall direction of Dr. Axel Kravatzky25
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?“We have a fairly rigorouspre-qualification process.We certainly do a lot inensuring that our goodssuppliers <strong>and</strong> our serviceproviders meet certainst<strong>and</strong>ards or o<strong>the</strong>rwise<strong>the</strong>y won’t do businesswith us. We have clearlydefined business ethics,we have declarations thatsuppliers have to make,we do investigations onour own depending on<strong>the</strong> contractor or serviceprovider that we aredealing with.”Eugen Tiah, CEOPhoenix Park Gas ProcessorsLtd.For some industries such as <strong>the</strong>financial services sector, an importantaspect of CSR-driven compensation is<strong>the</strong> area of risk management <strong>and</strong> itsimplications for potentially damagingeffects on corporate reputation. <strong>The</strong>development of CSR-specific keyShould CSR be practised throughout <strong>the</strong> entiresupply chain?2.9%97.1%YesNoperformance indicators (KPIs) in thisarea could serve as an example for o<strong>the</strong>rindustries to integrate CSR targets intoindividual performance assessments,something that requires <strong>the</strong> settingof measurable targets. Companiesthat practise strategic CSR areperceptible to <strong>the</strong> dynamics, dem<strong>and</strong>s<strong>and</strong> pressures generated throughout<strong>the</strong> entire supply chain. In <strong>the</strong> wordsof Berry Ferdin<strong>and</strong>, ManagingDirector of Bewil & Company Ltd,his own business ethics was cruciallyinformed by a change of thinking <strong>and</strong>entrepreneurial practise on <strong>the</strong> part ofhis supply chain environment <strong>and</strong> hisbusiness partners: “We were involvedin <strong>the</strong> representation of companiesthat dem<strong>and</strong>ed that we took note of all<strong>the</strong> CSR-specific requirements in <strong>the</strong>marketplace. <strong>The</strong> whole l<strong>and</strong>scape interms of supplying services changed<strong>and</strong> our business partners dem<strong>and</strong>edthat we pay a little more attentionto things like staff welfare or that wepay attention to <strong>the</strong> environment. Sogradually we learned that to stay inbusiness you needed to fall in line <strong>and</strong>you also needed to be concerned abouta little bit more than just profits”.97.1% of all CEOs interviewed went onrecord as saying that CSR should bepractised throughout <strong>the</strong> entire supplychain. <strong>The</strong> latter enables businessowners, managers <strong>and</strong> boards to setsocial <strong>and</strong> environmental st<strong>and</strong>ardsfor external actors dem<strong>and</strong>ingthat suppliers are in compliancewith regulatory frameworks, goodbusiness practices <strong>and</strong> internationallyagreed industrial relations regimes.At <strong>the</strong> same time, supply chainsprovide interest groups <strong>and</strong> activistmovements with an entry pointfor scrutinising especially globallyoperating businesses <strong>and</strong> <strong>the</strong>irprofessed sustainability commitmentsthus contributing towards corporateaccountability. Critics would arguethat in <strong>the</strong> past, such scrutinyhas engendered “negative publicsentiments <strong>and</strong> invariably resentmentstowards […] global br<strong>and</strong>s following‘irresponsible’ behaviour along <strong>the</strong>irsupply chain” 19 <strong>and</strong> that companiescannot necessarily be held responsibleIs your company seeking to implementsustainability criteria throughout its supply chain?46.9%53.1%YesNo19 Kenneth Ameshi, Onyeka Kingsley Osuji, Paul Nnodim, ‘Corporate Social Responsibility in Supply Chains of Global Br<strong>and</strong>s: A Boundaryless Responsibility? Clarifications, Exceptions <strong>and</strong>Implications, in: Journal of Business Ethics, Vol. 81, No.1, p.226.26
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 1CSR in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> – Strategic Evolution or Preserving <strong>the</strong> Status Quo?“Our suppliers partner with us to help bring services to our clients <strong>and</strong>we are certainly looking for people <strong>and</strong> companies that have compatiblesustainability cultures. For example, in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, we givepreference to local suppliers to create local jobs <strong>and</strong> drive local economicdevelopment. We have also partnered with some of our suppliers in <strong>the</strong>past for fundraising events <strong>and</strong> community outreach. We have supportedschools, churches, orphanages <strong>and</strong> o<strong>the</strong>rs because Fluor takes its communityresponsibility very seriously <strong>and</strong> because it is <strong>the</strong> right thing to do.”James Wilkins, Country General Manager<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, Fluor Daniel South America Ltd.for <strong>the</strong> behaviour of <strong>the</strong>ir suppliers.However, most CSR advocates wouldagree that supply chain managementprovides an effective promotionalinstrument for those corporations thathave embraced <strong>the</strong> idea of strategicsustainability management.Never<strong>the</strong>less, when pressed beyond<strong>the</strong> normative statement of howcompanies should treat with <strong>the</strong>issue <strong>and</strong> instead being asked if <strong>the</strong>yare concretely seeking to implementsustainability criteria through <strong>the</strong>irsupply chains, only slightly more thanhalf of all CEOs (53.1%) confirmedsuch intentions. While still revealingmore about <strong>the</strong> attitudes, plans <strong>and</strong>perceptions of CEOs, this resultsuggests that in terms of actualpractice <strong>the</strong> acceptance of <strong>and</strong>interest in supply chain managementapproaches is a lot less pronounced.This interpretation finds additionalsubstantiation in <strong>the</strong> survey whenCEOs are being asked to name <strong>the</strong>three most effective approachesof integrating CSR within <strong>the</strong>irindividual corporate frameworks. 20Here, only 17.1% mentioned supplychain management as being among<strong>the</strong> top three modalities trailingawards (34.3%), <strong>the</strong> development ofperformance measures <strong>and</strong> indicators(42.9%), internal communication(45.7%) <strong>and</strong> <strong>the</strong> promotion ofemployee volunteering (71.4%) as <strong>the</strong>approaches chosen.Joel Pemberton, Managing Directorof energy firm Ten Degrees NorthLtd. points out: “Companies mayhave hundreds of contractors but onlya couple of dozen key contractors.Which three (3) of <strong>the</strong> following approaches are <strong>the</strong> most effective in integratig CSR within your company?80.0%70.0%60.0%50.0%40.0%30.0%20.0%10.0%0.0%74.3%Securebuy-in byseniormanagement<strong>and</strong>/or <strong>the</strong>Board ofdirectors45.7%Internalcommunication(e.g.dissemination of Code ofConduct,newsletter,workshops,etc.)34.3%Awards (e.g.for employeevolunteering)We have implemented CSR through<strong>the</strong> supply chain with some of <strong>the</strong>sefew key contractors, not with all. Weget to spend a lot of time with <strong>the</strong>irmanagement teams, get to underst<strong>and</strong><strong>the</strong>ir business <strong>and</strong> to get our businessculture into that organisation, <strong>the</strong> waywe think <strong>and</strong> how we do business. Butits very time consuming”.42.9%DevelopCSR-relatedperformancemeasures<strong>and</strong> keyperformanceindicators71.4%Promotingemployeevolunteering17.1% 17.1%TrainingEnsuringcompliance bydistributors,suppliers <strong>and</strong>contractors20 Interviewees were being given <strong>the</strong> opportunity to provide three responses.27
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>“Every little thing we do as corporatebeings affects somebody”Sharon Christopher, Deputy CEO, First Citizens Bankon Corporate Ethics, Risk Management <strong>and</strong> Morality in BusinessQ: What is your take on Corporate Social Responsibility (CSR) <strong>and</strong> by that Iinclude environmental concerns as well?InterviewSC: Corporations exist in a space <strong>and</strong> you are under an obligation in that spaceto benefit those around you. We can’t just be in <strong>the</strong> business of making moneybecause if you make money <strong>and</strong> you give nothing back <strong>the</strong>n it is worthless <strong>and</strong><strong>the</strong> organisation will not be sustainable. We say that First Citizens is <strong>the</strong> only trulylocal financial institution in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> which was born <strong>from</strong> <strong>the</strong> people,by <strong>the</strong> people. What is <strong>the</strong> obligation that First Citizens owes to <strong>the</strong> society withinwhich it exists? We talk about <strong>the</strong> issue of corporate governance. Why is thatimportant? Asking those questions has helped us over <strong>the</strong> years because wehave seen that when you run organisations in an unethical manner it affects notonly <strong>the</strong> organisation but <strong>the</strong> entire society. You have not lived up to your duty <strong>and</strong>you create destruction. We are not in this space to do that; we are in this space tomake it better for those who exist now <strong>and</strong> for those who will come afterwards.So we look at things such as our ethics <strong>and</strong> our environment. When we lendto customers for example, are we going to lend to a major corporate customerif we underst<strong>and</strong> that <strong>the</strong> way in which <strong>the</strong>y do <strong>the</strong>ir business is polluting <strong>the</strong>environment <strong>and</strong>, fur<strong>the</strong>rmore, <strong>the</strong>y are not paying attention to those actions?And it’s not just about whe<strong>the</strong>r <strong>the</strong> Environmental Management Authority (EMA)will come down on <strong>the</strong>m. It has to do too with <strong>the</strong> question of whe<strong>the</strong>r <strong>the</strong>se arepeople that we want to be involved with because <strong>the</strong>y are destroying <strong>the</strong> spacethat is ours.<strong>The</strong>n of course <strong>the</strong>re is <strong>the</strong> whole question of sponsorships. Even when we dosponsorships we don’t just give money r<strong>and</strong>omly; we determine <strong>the</strong> areas thatwe are going to support. <strong>The</strong> youth. Why? Because this is our future. We lookat things like sports. Why? Because we feel that through sports we create akind of discipline for <strong>the</strong> society. We look now at women’s issues. Again why?Because we recognise <strong>the</strong> contribution of women to our society. How can wecreate an environment in which women can live up to <strong>the</strong>ir highest potential? Allof this feeds back into our br<strong>and</strong> because we say that this is how we want ourorganisation to be known. It is just like an individual saying ‘I want to be knownas somebody who gives back <strong>and</strong> is leaving something better for those whocome behind me’. We also support <strong>the</strong> community activities like Eid-ul-Fitr, Divali30
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong><strong>and</strong> o<strong>the</strong>r cultural festivals because it is very important for people to be part ofwhere <strong>the</strong>y come <strong>from</strong>. When we talk about all of that, it’s our CSR, that is whatit means to be a good citizen.Take for example <strong>the</strong> earthquake in Haiti in 2010. Now, we don’t have branches inHaiti <strong>and</strong> <strong>the</strong>n <strong>the</strong>re’s <strong>the</strong> context of 2008, 2009 <strong>and</strong> 2010 being very difficult yearsfor <strong>the</strong> financial services sector. But <strong>the</strong>re you have a country in <strong>the</strong> Caribbe<strong>and</strong>estroyed by an earthquake. We gave US$1 million to build a primary school <strong>and</strong>we didn’t just h<strong>and</strong> <strong>the</strong> money to <strong>the</strong> government; we gave <strong>the</strong> money to <strong>the</strong>Inter-American Development Bank (IADB) <strong>and</strong> we said this is what <strong>the</strong> schoolmust look like. <strong>The</strong> school must be built in accordance with earthquake <strong>and</strong>hurricane codes; <strong>the</strong>re must be an area where <strong>the</strong> children are able to plant so<strong>the</strong>y can grow <strong>the</strong>ir own food. It’s not about giving money. It’s about what you arecreating for those who are here now <strong>and</strong> what you are leaving for those who arecoming behind... CSR is about underst<strong>and</strong>ing that if you exist in a space you needto give back to that space.Q: Do you think it is also a question of size <strong>and</strong> <strong>the</strong> dimension that yourbusiness has so that <strong>the</strong> bigger ones are under a bigger obligation <strong>and</strong>responsibility than <strong>the</strong> smaller ones?No. First Citizens might be able to give a million dollars to Haiti <strong>and</strong> a smallercompany might not be able to do that. But it doesn’t have to do with <strong>the</strong> quantityof <strong>the</strong> money. It has to do with your focus. I can sit in my church <strong>and</strong> say that Iwant to write a cheque for over $5000 as a donation. Somebody else might say‘I can’t even write a cheque for five dollars, but what I can do is give half a day ofmy time to come <strong>and</strong> sit in <strong>the</strong> office to talk to people who are in crisis’.Q: Would you <strong>the</strong>n agree that <strong>the</strong> concept of <strong>the</strong> Triple Bottom Line–social<strong>and</strong> environmental performance of a company in addition to its commercialperformance–defines businesses in today’s market place or should define <strong>the</strong>m?SC: In <strong>Trinidad</strong>, we had <strong>the</strong> Unemployment Relief Program (URP) workers <strong>and</strong><strong>the</strong>y used to line up in front of <strong>the</strong> treasury building to collect <strong>the</strong>ir salaries. <strong>The</strong>government decided to start paying <strong>the</strong>se people through <strong>the</strong> banking system<strong>and</strong> all <strong>the</strong> banks except us felt that <strong>the</strong>y didn’t want <strong>the</strong>se people in <strong>the</strong>ir bankinghall. Now we said you can bank <strong>the</strong>m by giving <strong>the</strong>m ATM cards <strong>and</strong> allowing allof <strong>the</strong>ir payments to be made directly into <strong>the</strong>ir bank accounts. Because many31
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>of <strong>the</strong>m are not financially literate we will show <strong>the</strong>m howto use <strong>the</strong> ATM machine so <strong>the</strong>y can access <strong>the</strong>ir moneyin that way. We told our staff that we are embarking onthis initiative. Don’t get me wrong: we weren’t saying that itwas an initiative that wouldn’t make money, but we weren’tmaking a lot of money on this deal. <strong>The</strong> reason we weredoing it, <strong>and</strong> we explained that to our staff, was that it wasvery important to underst<strong>and</strong> that <strong>the</strong>se people are citizenstoo <strong>and</strong> we must do everything we can to assist o<strong>the</strong>rs.What happened out of that exercise? We are talking aboutthous<strong>and</strong>s of people coming to bank <strong>and</strong>, of course, wehad to open up on Saturdays <strong>and</strong> Sundays <strong>and</strong> all <strong>the</strong> staffcame because <strong>the</strong>y were serving a purpose. And <strong>the</strong>n <strong>the</strong>ysaw people’s reactions when <strong>the</strong>y came in to use <strong>the</strong> ATMmachine. This is something that we take for granted but toa lot of people to come in <strong>and</strong> do something like that wascompletely new. But it goes back to <strong>the</strong> point made earlierthat when you talk about <strong>the</strong> sustainability of your business<strong>and</strong> when you talk about profitability, you have to talk aboutthings like purpose. We underst<strong>and</strong> that more <strong>and</strong> more,especially <strong>from</strong> this younger generation that says, ‘Youknow what, we are in a business. We don’t mind working<strong>and</strong> we will work but we have to know what we are workingfor <strong>and</strong> we have to work on something that makes us feelgood’. So if anybody running an organisation now wants torun it in ways that are unethical <strong>and</strong> ways that don’t allowpeople to feel that <strong>the</strong>y have something to contribute tosome greater cause, your organisation is not going to besustainable. I have lived that <strong>and</strong> I have seen <strong>the</strong> truth ofthat. More <strong>and</strong> more organisations will have to realise that.Q: You touched already on <strong>the</strong> question of corporateethics. Particularly in <strong>the</strong> wake of <strong>the</strong> 2008 financialcrisis, <strong>the</strong> issue of corporate governance has becomesomething of a ‘hot topic’. Looking at <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> <strong>and</strong> its boardrooms, were <strong>the</strong>re changes in thismarketplace in response to mistakes made in this areaof corporate governance? Did <strong>the</strong> market react?SC: <strong>The</strong>re have been changes because a lot of companiesin <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> have a global reach: ei<strong>the</strong>r <strong>the</strong>y<strong>the</strong>mselves have businesses outside <strong>the</strong> country or <strong>the</strong>ymust deal with people <strong>and</strong> business partners <strong>from</strong> abroad.As Europe <strong>and</strong> <strong>the</strong> U.S. become more rigid about corporategovernance it drives <strong>the</strong> process. Maybe ten years agonobody was really interested in who your directors were,what exactly <strong>the</strong>ir level of qualification was. Now what youfind happening is that when <strong>the</strong>y come to do due diligenceon you, <strong>the</strong> corporate governance aspects of your businesssuch as how is <strong>the</strong> organisation run, what kind of board youhave in place, what kind of procedures you have, whe<strong>the</strong>ryou have a code of ethics, how is it rolled out to your staff,how much ethics training do you do… all those things arenow huge <strong>and</strong> organisations are being forced into doing<strong>the</strong>m. In <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> <strong>the</strong>re is a real need to driveproper governance in both government <strong>and</strong> corporate life.But people have to connect <strong>the</strong> dots. You have to go to <strong>the</strong>m<strong>and</strong> tell <strong>the</strong>m why it is important. And government could be<strong>the</strong> driver behind bringing in <strong>the</strong> resources to do that kindof training because it is very expensive. We do corporategovernance training for our board where we use an externalfacilitator <strong>and</strong> it’s costly. But if government started through<strong>the</strong> state sector first where <strong>the</strong> companies are huge, thatwould change <strong>the</strong> dynamics.Q: When you talked about education <strong>and</strong> sports as<strong>the</strong> topical areas that you identified <strong>and</strong> when you aresaying that you have not just r<strong>and</strong>omly taken a numberof issues <strong>and</strong> causes but you have your reasons for whyyou are supporting those causes, does <strong>the</strong> bank in itsselection process also take into consideration broaderdevelopment frameworks such as government policiesor even <strong>the</strong> UN’s Millennium Development Goals(MDGs)?No we really don’t. We sit <strong>and</strong> we look at society <strong>and</strong> <strong>the</strong>ndetermine <strong>the</strong> kinds of needs <strong>and</strong> where we would be mosteffective. For example, at one stage poverty eradication wasa huge thing but we decided that this was not somethingthat we could get involved in. But we looked at <strong>the</strong> youth32
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong><strong>and</strong> realised that this is an important area <strong>and</strong> we wanted toget involved in that. <strong>The</strong>re are always a number of issues <strong>and</strong>you have to choose where you are going to focus. I suppose<strong>the</strong> reason we are not getting tied to a specific governmentplan in our CSR activities is because <strong>the</strong> plans keep shiftingonce <strong>the</strong> government changes, which is ridiculous becauseyou don’t have to throw out everything each time.Q: Looking at social <strong>and</strong> environmental indicatorswith you being part of <strong>the</strong> financial services industry,would it be accurate to say that CSR <strong>and</strong> sustainabilitythinking are also important tools for <strong>the</strong> Bank in termsof its risk management? How do you personally <strong>and</strong>organisationally reconcile <strong>the</strong> moral dimension, <strong>the</strong>human face of corporate being <strong>and</strong> your businessconsiderations?If you are talking about risk management <strong>and</strong> if you aretalking about <strong>the</strong> environment you need to acknowledgethat risk has not only to do with credit risk; you havereputational risk as well. If we have a customer who, forexample, is polluting <strong>the</strong> environment in a certain way orwe start underst<strong>and</strong>ing that <strong>the</strong>re are things going on withthis customer that are ethically just not acceptable, suchas <strong>the</strong> way <strong>the</strong>y are operating in villages, <strong>the</strong>n we are notgoing to deal with that customer. And people would say itsmorality. But <strong>the</strong> fact is it’s not only morality. It has to do withyour own business because if people know that those are<strong>the</strong> customers that you are dealing with, it is going to affectyou negatively. You know in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> we havea saying ‘if you lie down with puppy you must get fleas’?It means you become a part of whatever’s being done bythose with whom you associate. We have people who bankwith us who are telling us that <strong>the</strong>y bank with us because<strong>the</strong>y like what we are doing in <strong>the</strong> field of corporate ethics.So it’s just not as simple as saying that I will look <strong>the</strong> o<strong>the</strong>rway if a customer is operating unethically because I havesuch large business with him. I think all organisations willstart to move away <strong>from</strong> that because <strong>the</strong>re is <strong>the</strong> growingunderst<strong>and</strong>ing that we are impacted by those with whomwe associate <strong>and</strong> at <strong>the</strong> end of <strong>the</strong> day it is going to affectyour bottom line.We are in <strong>the</strong> business of making money but <strong>the</strong>re is also<strong>the</strong> question of how you are making it. Just this week aswe sat around <strong>the</strong> boardroom table, <strong>the</strong> senior managersgroup was talking about a certain product <strong>and</strong> one of <strong>the</strong>managers was saying that <strong>the</strong>re are certain things that youcould do to really leverage this for us. But somebody elsearound <strong>the</strong> table said we are not going down that road. Weare not doing it, because it’s unethical. <strong>The</strong> discussion wasif we do this <strong>and</strong> it ever becomes known that we wereinvolved in something like this we are going to be deadin <strong>the</strong> water, we are going to start losing customers. Andit wasn’t something illegal. <strong>The</strong>re is no law that says wecouldn’t do it, but we have ethics. Ethics is doing what isright even though <strong>the</strong>re may be no law stopping you <strong>from</strong>doing o<strong>the</strong>rwise.Q: What is your view on <strong>the</strong> role of government in CSR,perhaps as regulator, enabler <strong>and</strong> facilitator?I don’t know about regulator but <strong>the</strong> government cancertainly be a facilitator <strong>and</strong> enabler. And in countries likeours where <strong>the</strong> government is <strong>the</strong> largest employer <strong>and</strong> <strong>the</strong>government manages <strong>the</strong> largest number of corporations,it is very important for <strong>the</strong> executive to drive certainbehaviours <strong>from</strong> <strong>the</strong> top. CSR is not how much money Igive <strong>the</strong> National Carnival Committee (NCC) to run Carnivalor how much money I give to a steel b<strong>and</strong>. If you look at<strong>the</strong> sponsorship side, it’s not only about h<strong>and</strong>ing out <strong>the</strong>money. It’s about saying that when I look at this steel b<strong>and</strong>as a sponsor, I realise that <strong>the</strong>y are taking young kids out ofone of <strong>the</strong> most depressed areas <strong>and</strong> I can see that <strong>the</strong>yare mentoring those kids; <strong>the</strong>refore that’s where I am goingto place my support. If government starts to push thatkind of thing, just because of its size… its critical mass, itwill send a certain kind of signal <strong>and</strong> encourage a certainkind of behaviour. In <strong>the</strong> area of sponsorship I think thatgovernment can help by providing certain incentives topeople. If you talk about governance <strong>and</strong> you have all <strong>the</strong>sestate enterprises that are being run without any adherenceto governance, <strong>the</strong>n what value does that create? It is notabout having ano<strong>the</strong>r governance seminar every Saturday.It’s not just a word.33
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Q: Do you have an official volunteer programme?No, we don’t have a volunteer programme as such. Whatwe do have is that at <strong>the</strong> end of every year, every branch<strong>and</strong> unit is required to have what we call a ‘corporatewish’. It means that you go into your community <strong>and</strong> youdetermine some activity that needs to be done, whe<strong>the</strong>r itis rebuilding a library for schools in <strong>the</strong> Beetham, whe<strong>the</strong>rit is a single mo<strong>the</strong>r with differently-able kids who you areseeking to assist, whe<strong>the</strong>r it is a fa<strong>the</strong>r whose wife hasdied <strong>and</strong> whose only daughter needs a wheelchair. So <strong>the</strong>yare going out to do things: re-painting a school, helpingto rebuild a house. Sometimes we have activities aroundour ‘Care’ programme which st<strong>and</strong>s for ‘Citizens in Actionto Restore <strong>the</strong> Environment’ where employees would goout <strong>and</strong> undertake different activities with respect to <strong>the</strong>environment. We take photographs of what happened<strong>and</strong> we put it toge<strong>the</strong>r in a magazine so people feel goodabout what <strong>the</strong>y have been doing but we also, as we sayin <strong>Trinidad</strong>, ‘big <strong>the</strong>m up’ for doing it. In <strong>the</strong> performanceappraisal for our managers, you are actually scored for yourinvolvement in community activities. As a result, peoplewant to be able to say at a managerial level that <strong>the</strong>se were<strong>the</strong> things that <strong>the</strong>y were involved in. Even outside of <strong>the</strong>formal programme <strong>and</strong> official activities of First Citizens,<strong>the</strong> managers will look for causes where <strong>the</strong>y can say that<strong>the</strong>y were involved, for example in Rotary or SERVOL ormentoring. You can get marks for those activities <strong>and</strong> it’s nolonger just your financial targets but it’s also what we call<strong>the</strong> ‘below-<strong>the</strong>-line’ targets.Q: Have you changed your views on CSR over <strong>the</strong> years?I have not changed my views; I have only become moreentrenched in <strong>the</strong>m. No man is an isl<strong>and</strong>. If you are sitting<strong>the</strong>re <strong>and</strong> you are doing your little thing inside of your littlespace <strong>and</strong> it would affect nobody else, that would be fine;but it’s just not like that. Every single thing we do as humanbeings, every little thing we do as corporate beings, affectssomebody. And every day you get up you must ask yourself‘What is my purpose on this earth for <strong>the</strong> short time that Iam here? Is my purpose to destroy or is it to make a positivedifference?’ We might call it CSR now but at <strong>the</strong> end of <strong>the</strong>day it is what is required of us as people in this space. Thatis all.34
“As far as government involvement is concerned, taxation <strong>and</strong> legislation can be useful tools topromote <strong>the</strong> involvement of people in CSR. Particularly taxation is one way in which incentives canbe given for more people to put money into social services <strong>and</strong> poverty alleviation, information <strong>and</strong>education for disadvantaged people <strong>and</strong> so on.”Emile Elias, CEONH International (Caribbean Ltd.)36
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 2Government, Consumers <strong>and</strong> Employees – <strong>The</strong> Drivers of CSRGovernment, Consumers <strong>and</strong>Employees – <strong>The</strong> Drivers of CSRCHAPTER 2Senior managers recognise <strong>the</strong> important role that national governments can playin <strong>the</strong> development <strong>and</strong> promotion of enabling frameworks for CSR. 51.5% of allCEOs interviewed for this survey mentioned governments as <strong>the</strong> second mostimportant stakeholder group driving CSR within <strong>the</strong> local business community<strong>and</strong> raising <strong>the</strong> profile of corporate sustainability in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>. Whilethis figure represents just about half of all respondents, a remarkable 75.8% ofCEOs would even welcome government intervention thus embracing <strong>the</strong> idea of asignificantly stronger <strong>and</strong> more intrusive configuration for public involvement inregulatory affairs. This suggests a ra<strong>the</strong>r radical shift away <strong>from</strong> <strong>the</strong> traditionallyskeptical attitude of members of <strong>the</strong> business community with respect togovernment involvement in <strong>the</strong> sustainability-relevant aspects of <strong>the</strong> markets. Italso seems to point at a change in <strong>the</strong> widespread conviction of entrepreneurs <strong>and</strong>business owners that companies should be able to voluntarily determine <strong>the</strong> levelof <strong>the</strong>ir social <strong>and</strong> environmental commitment.Generally, <strong>the</strong> way by whichgovernments can drive corporateresponsibility rests on both voluntary<strong>and</strong> m<strong>and</strong>atory approaches <strong>and</strong>encompasses roles as enabler,exemplar, enforcer <strong>and</strong> partner. 21While voluntary buy-in for <strong>the</strong> idea<strong>and</strong> concept of CSR appears to be<strong>the</strong> least confrontational <strong>and</strong> has<strong>the</strong>refore often been <strong>the</strong> preferredmode of action for managers, <strong>the</strong>establishment of binding legislativeframeworks allows for compatibilitywith international norms, creates alevel playing field for competition<strong>and</strong> determines governmentalexpectations for corporate behaviour.In <strong>the</strong> words of <strong>the</strong> authors of a recentstudy on <strong>the</strong> role of governments inCSR, “voluntary initiatives – whichby definition are not legally binding– should never be a substitute foreffective regulation, but can be apowerful complement.” 22 WhileWillard P. Harris, Managing Directorof COLFIRE makes more generally<strong>the</strong> point that “<strong>the</strong> government is afacilitator”, Govind Maharaj, CEO ofEastern Commercial L<strong>and</strong>s Ltd. prefersa more balanced approach when hesays that “a bit of moral suasion, abit of government intervention <strong>and</strong> abit of partnering with government isrequired”. In <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, <strong>the</strong>government itself seems to increasinglyrealise <strong>the</strong> value that its involvementWould you welcome government intervention as adriver for CSR?24.2%75.8%YesNo21 See <strong>UNDP</strong> Report Caribbean Regional Conference ‘Corporate Social Responsibility – Creating value through Public-Private Partnership’, <strong>UNDP</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>, p.12.22 <strong>The</strong> Role of Governments in Promoting Corporate Responsibility <strong>and</strong> Private Sector Engagement in Development, United Nations Global Compact <strong>and</strong> Bertelsmann Stiftung, p.17.37
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 2Government, Consumers <strong>and</strong> Employees – <strong>The</strong> Drivers of CSR“I would like to see <strong>the</strong>state’s role more in moralsuasion than in regulationin that if you don’tparticipate we can makeyou feel bad but we won’tmake you feel that you areobligated to. Your peerpressure, your communitypush, your colleagues in<strong>the</strong> industry, what that willdo is to woo you if you areresistant to playing yourpart. But I don’t thinkmit should be involved inregulation. It should beobligatory in <strong>the</strong> socialconscience <strong>and</strong> less inrules <strong>and</strong> laws.”Ingrid Lashley, CEO<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> MortgageFinance (TTMF)in sustainable policy-making <strong>and</strong>in <strong>the</strong> establishment of frameworkconditions for inclusive bottom-of<strong>the</strong>-pyramidmodels of CSR has.Addressing <strong>the</strong> issue of developinga national CSR policy, Minister ofTrade <strong>and</strong> Industry Steven Cadiz at aworkshop organised by <strong>the</strong> <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong> Chamber of Industry <strong>and</strong>Commerce (TTCIC) in October 2011stressed <strong>the</strong> external dimension of awell-developed domestic corporateresponsibility l<strong>and</strong>scape when hereminded <strong>the</strong> audience that CSR“is key for strategically positioning<strong>and</strong> br<strong>and</strong>ing <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>as a dynamic <strong>and</strong> modern hub forconducting competitive business<strong>and</strong> attracting greater investments.I want to assure you, <strong>the</strong> businessowners present today, that when <strong>the</strong>national CSR policy is completed<strong>and</strong> implemented, it will help all ourfirms regardless of scale or size in <strong>the</strong>system, manage <strong>the</strong> complex set ofrelationships that exist <strong>and</strong> developstrategies to integrate CSR principlesin <strong>the</strong>ir day to day operations. 23This statement st<strong>and</strong>s in stark contrastto <strong>the</strong> findings of <strong>the</strong> 2008 MappingReport which concluded that “<strong>the</strong>reare few fiscal incentives for companiesto undertake CSR related initiatives<strong>and</strong> <strong>the</strong>re is no set framework tocoordinate CSR initiatives at <strong>the</strong>national level.” 24 It however is verymuch in line with <strong>the</strong> thinking inboardrooms across both isl<strong>and</strong>s giventhat 88.6% of all CEOs would welcome<strong>the</strong> development of a national CSRPolicy as a st<strong>and</strong>ard-setting frameworkfor <strong>the</strong> Private sector.<strong>The</strong> heightened awareness of politicaldecision-makers about CSR <strong>and</strong><strong>the</strong> seemingly greater opennesstowards government involvementby senior managers may open upnew opportunities for Public-PrivatePartnerships giving more adequaterecognition to <strong>the</strong> fact that in <strong>the</strong> postwelfarestate scenario of shrinkingstate expenditures <strong>and</strong> concerns overunsustainable levels of public debt, allsocietal actors including <strong>the</strong> PrivateIn your opinion, which stakeholders are <strong>the</strong> most important drivers for CSR?90.0%80.0%70.0%60.0%50.0%40.0%30.0%20.0%10.0%0.0%47.1%Human Rights73.5%CorporateGovernance55.9%Labour St<strong>and</strong>ards(includingOccupational Health<strong>and</strong> Safety)76.5%Environment(including energymgt, carbon mgt,waste mgt, watermgt)41.2%Anti-Corruption23 Minister of Trade <strong>and</strong> Industry Steven Cadiz, Speech at <strong>the</strong> Breakfast Seminar ‘CSR <strong>and</strong> Government: By St<strong>and</strong>er, Follower or Leader?’, <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> Chamber of Industry <strong>and</strong> Commerce(TTCIC), 4th October 2011.24 <strong>UNDP</strong>/STCIC Mapping Report, p.54.38
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 2Government, Consumers <strong>and</strong> Employees – <strong>The</strong> Drivers of CSRWould you welcome <strong>the</strong> development of a nationalCSR Policy as a st<strong>and</strong>ard-setting framework for <strong>the</strong>Private Sector?11.4%can <strong>and</strong> should do to encouragecorporate citizenship. Ra<strong>the</strong>r <strong>the</strong>challenge is whe<strong>the</strong>r <strong>the</strong> governmentcan find ways to raise <strong>the</strong> strategicsignificance of corporate citizenship inaddressing social <strong>and</strong> environmentalchallenges, both to business as animperative <strong>and</strong> as an enabler of moreeffective government policy, bothnationally <strong>and</strong> on <strong>the</strong> global stage.” 2588.6%YesNoSector need to play a more activerole in honouring <strong>the</strong>ir obligationsas signatories to <strong>the</strong> social contract.Govind Maharaj, CEO of <strong>the</strong> TruValusupermarket chain operator EasternCommercial L<strong>and</strong>s Ltd. points outthat “people are at different levels ofhow <strong>the</strong>y see CSR so to get everybodyto comply <strong>and</strong> to head in <strong>the</strong> samedirection at <strong>the</strong> same speed is goingto be difficult.” Never<strong>the</strong>less, <strong>the</strong>prospect of forging social partnershipsacross sectoral lines seems to be anidea that is increasingly embracedby greater number of companies in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>. Fur<strong>the</strong>rmore,becoming a protagonist of CSR itself<strong>and</strong> intervening through policyinitiatives <strong>and</strong> o<strong>the</strong>r forms of ‘soft’regulations would give <strong>the</strong> governmentan opportunity to spearhead nationalefforts of ‘greening’ <strong>the</strong> economy inline with its own policy objectives<strong>and</strong> responding to <strong>the</strong> evidentenvironmental vulnerabilities of<strong>the</strong> country. Reflecting on <strong>the</strong> roleof government in CSR in what hecalls ‘Third Generation CorporateCitizenship’, Simon Zadek remarksthat “<strong>the</strong> issue is not merely whe<strong>the</strong>r<strong>the</strong>re are things that <strong>the</strong> governmentAs traditional dividing lines betweenissues, responsibilities, portfolios<strong>and</strong> public versus private ‘turfs’ arebecoming increasingly blurred, CEOsare keenly aware of <strong>the</strong>ir changingrole in society <strong>and</strong> of <strong>the</strong> way inwhich political decision-makers <strong>and</strong>members of <strong>the</strong> public are viewing<strong>the</strong>ir contribution to <strong>the</strong> social <strong>and</strong>environmental development of <strong>the</strong>country. This is reflected in <strong>the</strong> 75.8%of all CEOs that have expressed <strong>the</strong>irbelief that companies are increasinglyexpected to take over parts of socialservice delivery previously reservedfor governments. In o<strong>the</strong>r words, <strong>the</strong>role of government is being re-definedas a result of <strong>the</strong> growing strains onpublic resources <strong>and</strong> its dependenceon <strong>the</strong> social engagement of privatecapital suggests <strong>the</strong> emergence ofa new division of labour betweencompanies <strong>and</strong> <strong>the</strong> state with <strong>the</strong> latterto provide <strong>the</strong> regulatory frameworkfor <strong>the</strong> former to deliver social goods<strong>and</strong> services in particular areas.In many countries, an importantdriver for <strong>the</strong> CSR business caseis consumers. Businesses, manyCSR practitioners argue, havebeen prompted into changing <strong>the</strong>ircorporate behaviour as well as <strong>the</strong>nature of <strong>the</strong>ir production processes<strong>and</strong> manufacturing conditionsbecause of <strong>the</strong> pressure generatedthrough ‘ethical consumerism’.<strong>The</strong> latter contains both a positive(‘reward’) <strong>and</strong> negative (‘punishment’)Rationale for Public SectorInvolvement in CSR<strong>The</strong> defensive justifaction forpublic sector actors in middle<strong>and</strong>low-income countriesrelates to minimizing <strong>the</strong>potentially adverse effects ofCSR on local communities,environments <strong>and</strong> marketswhen it is imposed throughinternational supply chains<strong>and</strong> investment.<strong>The</strong> proactive justification forpublic sector actors to engagewith CSR is provided by <strong>the</strong>opportunity to increase <strong>the</strong>domestic public benefits ofCSR practices in economic,social <strong>and</strong> environmentalterms.Adopted <strong>from</strong> ‘CSR <strong>and</strong>Developing Countries – WhatScope for Government Action’,UN Department of Economic<strong>and</strong> Social Affairs, SustainableDevelopment InnovationBriefs, Issue 1, February 200725 Simon Zadek, Third Generation Corporate Citizenship – Public Policy <strong>and</strong> Business in Society, <strong>The</strong> Foreign Policy Centre <strong>and</strong> AccountAbility 2001, p.14.39
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 2Government, Consumers <strong>and</strong> Employees – <strong>The</strong> Drivers of CSR<strong>and</strong> <strong>Tobago</strong> than in o<strong>the</strong>r countries.“Business <strong>and</strong> earning money through businessimpacts heavily on ethics. I think <strong>the</strong> governmentalso plays a role in that <strong>the</strong>y can create <strong>the</strong>environment to motivate <strong>the</strong> business community tobehave in a certain way. I personally looked at <strong>the</strong>Global Compact <strong>and</strong> decided let’s make this partof our corporate strategy. But most business peoplehaven’t reached that point, <strong>the</strong>y need to be educated,<strong>the</strong>y need to be informed <strong>and</strong> for <strong>the</strong>m, you haveto create that kind of enabling environment thatdoesn’t tolerate corruption, that forbids polluting<strong>the</strong> environment, that doesn’t tolerate unfair labourpractices <strong>and</strong> inspires <strong>the</strong>m to make a contributionbecause it is in <strong>the</strong>ir interest <strong>and</strong> in <strong>the</strong> country’sinterest to behave like that. If you leave <strong>the</strong> privatesector alone like that it is like asking a child to writean exam at <strong>the</strong> university level.”Dave RamkissoonCEO EIL Group of Companies<strong>The</strong> skepticism of CEOs about <strong>the</strong>‘driving qualities’ of consumers in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> with regards toCSR is fur<strong>the</strong>r reflected in <strong>the</strong> factthat only 48.6% of <strong>the</strong>m believe thatconsumers’ purchasing decisionsare increasingly determined by acompany’s social reputation while51.4% did not think that such socialprestige featured prominently in<strong>the</strong> decision-making process ofindividuals.Would you agree with <strong>the</strong> assertion that consumer’spurchasing decisions in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> areincreasingly determined by a company’s socialreputation?51.4%48.6%Do you think it is true that companies areincreasingly expected to take over parts ofsocial service delivery previously reserved forgovernments?31.4%68.6%YesNodimension with consumers’ desires,preferences, expectations <strong>and</strong>rejections leading to a range ofbehavioural <strong>and</strong> attitude-specificconsequences <strong>from</strong> purchasing goodsthat have a perceivably high ethical‘value’ to boycotting companies whoseproducts <strong>and</strong> services do not meet<strong>the</strong> ethical st<strong>and</strong>ards of a dem<strong>and</strong>ingpublic. Based on <strong>the</strong> findings of thissurvey, such consumer pressure in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> seems to beconsiderably lower <strong>and</strong> less of a ‘gamechanger’than in foreign markets.While only 11.4% of all CEOs namedconsumer <strong>and</strong> customer dem<strong>and</strong> as adriver for <strong>the</strong>m to take action on CSRissues, an overwhelming 85.3% of allrespondents agreed with <strong>the</strong> assertionthat social <strong>and</strong> environmentalconcerns influenced consumerbehaviour to a lesser extent in <strong>Trinidad</strong>68.6%YesNo<strong>The</strong>re is little or no evidence tosuggest that Caribbean consumersare prepared to pay a premium onproducts with ethical attributes <strong>and</strong> toreward exemplary corporate behaviour<strong>and</strong> ethical leadership because of <strong>the</strong>irenlightened self-interest As far as <strong>the</strong>‘punishment’ dimension of consumerpressure is concerned, <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> has never experienced aconsumer boycott or any o<strong>the</strong>r formof an effective public promotionscampaign that used <strong>the</strong> purchasingpower of ‘consumer citizens’ to coerceprivate businesses to choose or abstain26 Johannes Brinkmann, Ken Peattie, ‘Consumer Ethics Research: Reframing <strong>the</strong> Debate about Consumption for Good’, Electronic Journal of Business Ethics <strong>and</strong> Organization Studies, Vol.13, No.1(2008), p.40
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 2Government, Consumers <strong>and</strong> Employees – <strong>The</strong> Drivers of CSRWould you say that social <strong>and</strong> environmentalconcerns influence consumer behaviour to alesser extent in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> than in o<strong>the</strong>rcountries?14.7%85.3%YesNoyour employees satisfied primarilywith <strong>the</strong>ir jobs <strong>and</strong> secondarily with<strong>the</strong>ir lives. That in <strong>the</strong> end means thatyou have happy employees <strong>and</strong> whenyou have happy employees you havegood production <strong>and</strong> when you havegood production you make money.If <strong>the</strong>y all feel that <strong>the</strong> company iscommitted to <strong>the</strong>m, <strong>the</strong>re is so muchmore you will get in return”. Lookingat <strong>the</strong> drivers of CSR through <strong>the</strong>individual lenses of senior managers,<strong>the</strong> findings suggest a strong focusof CEOs on employees in makingCSR-related decisions with 71.4% ofall respondents naming employeeengagement as <strong>the</strong>ir main driver fortaking action.What would be <strong>the</strong> main drivers for you as CEO to take action on CSR issues?<strong>from</strong> certain forms of corporatebehaviour. 26In addition to government <strong>and</strong>consumers as external stakeholders,company employees are seen byCEOs as an internal stakeholdergroup that effectively drives CSRwithin <strong>the</strong> Private Sector. Employeescan be both direct beneficiaries ofgood corporate practices as well asexecutioners of CSR projects such ascommunity development activities<strong>and</strong> campaigns to raise awarenessabout environmental sustainabilityissues. 65.7% of CEOs nameemployees as <strong>the</strong> most importantdrivers for CSR leaving government(51.4%), communities (40%) <strong>and</strong>Board of Directors (40%) to trail insecond, third <strong>and</strong> fourth place. Evenmore impressively, 71.4% of CEOsresponded to <strong>the</strong> question of whatwould be <strong>the</strong> main driver for <strong>the</strong>m in<strong>the</strong>ir professional role to take actionon CSR issues by naming employees.Stanley Tempro, Managing Director ofBonsal Caribbean suggests that “CSRis trying to do a better job in getting90.0%80.0%70.0%60.0%50.0%40.0%30.0%20.0%10.0%0.0%82.9%Br<strong>and</strong>, trust <strong>and</strong>reputation20.0%Potential forrevenuegrowth/costreduction34.3%Personalmotivation11.4%Consumer/customerdem<strong>and</strong>71.4%Employeeengagement“What we have tried to do within our own organisationis to make a better life for our employees by workingwith us. So instead of working for us <strong>the</strong>y are workingwith us, we are working toge<strong>the</strong>r for this h<strong>and</strong> in h<strong>and</strong>.We can’t affect everybody’s quality of life in <strong>the</strong> countrybut if we can positively affect <strong>the</strong> quality of life for ourstaff, I think we are achieving something.”John Sabga, Managing DirectorTrotters Restaurant41
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>“<strong>The</strong> biggest CSR leader in any company needsto be <strong>the</strong> CEO”Charles Percy, CEO Methanex <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> Ltd.on Sweat Equity, Corporate Volunteerism <strong>and</strong> <strong>the</strong> Value of HumanCapitalQ: What do you make of <strong>the</strong> fundamental thought underlying CSR that<strong>the</strong>re is something that in terms of responsible behaviour – internally<strong>and</strong> externally – goes beyond just <strong>the</strong> bottom line, goes beyond <strong>the</strong> corebusiness?InterviewCP: <strong>The</strong> raw material that all businesses use is “human capital” <strong>and</strong> <strong>the</strong>refore<strong>the</strong>y owe something toward <strong>the</strong> nurturing of that source of human capital toensure <strong>the</strong> quality of <strong>the</strong> resource which comes into <strong>the</strong>ir businesses, as well asto ensure its continuous development.<strong>The</strong> question is how do businesses influence <strong>the</strong> society in which <strong>the</strong>y operate sothat <strong>the</strong>y leave it <strong>the</strong> better for <strong>the</strong>ir presence. For me, CSR needs to be lookedat as human capital development. How do we influence <strong>the</strong> human capital whichis <strong>the</strong> real engine of any organization? Do we influence it through <strong>the</strong> schoolsystem; do we influence young people who are <strong>the</strong> leaders of tomorrow in <strong>the</strong>way we position <strong>the</strong>m to see <strong>the</strong> future? How do we also influence <strong>the</strong> sheerfabric of society with <strong>the</strong> debates <strong>and</strong> actions which occur within <strong>and</strong> outside ofour organizations? All businesses <strong>the</strong>refore need to recognize that <strong>the</strong>y do have amoral responsibility for replenishing, renewing <strong>and</strong> developing <strong>the</strong> human capitalin <strong>the</strong>ir immediate environment <strong>and</strong> sphere of influence. That is where I see allbusinesses having a stake in social responsibility.Q: And you would not feel guilty if a critic of CSR would tell you that thisis a very selfish way of looking at it? After all, human capital is of crucialrelevance for <strong>the</strong> success of your business <strong>and</strong> <strong>the</strong>refore what you are doingon <strong>the</strong> social front is something that you expect to be beneficial to yourcommercial operations.CP: <strong>The</strong>re are four ‘P’s’ in social responsibility <strong>from</strong> <strong>the</strong> viewpoint of a corporation:<strong>the</strong>re are <strong>the</strong> “pet projects” which are nei<strong>the</strong>r good for business nor society,but may only serve to stroke <strong>the</strong> ego of some CEO or owner/manager. <strong>The</strong>nyou have “philanthropy”, which is just about giving some money that may helpa few NGO’s, but really does nothing for <strong>the</strong> corporation. And <strong>the</strong>n you have“propag<strong>and</strong>a”, which pushes <strong>the</strong> company’s line for whatever selfish reason<strong>and</strong> benefits only <strong>the</strong> company, not society. And finally <strong>the</strong>re is “partnering”,which is truly designed to help society as well as <strong>the</strong> business. Businesses fund44
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>All levels of business need to recognise that <strong>the</strong>y have aresponsibility for <strong>the</strong> replenishing, <strong>the</strong> renewing <strong>and</strong> <strong>the</strong>development of <strong>the</strong> human capital stock that <strong>the</strong>y utilise.And <strong>the</strong>rein lies for me social responsibility.CSR initiatives <strong>from</strong> <strong>the</strong> profit <strong>the</strong>y make <strong>and</strong> this is only sustainable in good aswell as lean times, if <strong>the</strong> ‘value proposition’ remains credible. Am I <strong>the</strong>reforeselfish in favouring true partnering? Yes, I am, if at <strong>the</strong> end of day I am satisfiedthat both society <strong>and</strong> business truly benefit.Q: How do your colleagues in <strong>the</strong> business world react to your veryoutspoken <strong>and</strong> very strong stance on <strong>the</strong> issue of CSR? Do <strong>the</strong>y see this asa distraction <strong>from</strong> <strong>the</strong> core business?CP: When you have lived <strong>the</strong> journey <strong>and</strong> seen <strong>the</strong> transformation <strong>and</strong> power thatis unleashed when an organization is fully engaged, <strong>the</strong>n you know how integralsocial responsibility is to your business. When I started at Methanex <strong>Trinidad</strong>Limited as CEO in 2006, our employee engagement survey score was 32 outof a possible 100 <strong>and</strong> none of <strong>the</strong> o<strong>the</strong>r Methanex Corporation companies wereless than 50. Through a disciplined approach over five years, we were able tomove <strong>from</strong> 32 to 74 per cent <strong>and</strong> now we sit on <strong>the</strong> top quartile of MethanexCorporation’s employee engagement. We now have an engaged workforce thatis not just delivering internally, but delivers externally as well. We have won <strong>the</strong>Energy Chamber’s CSR Award for ‘Recognizing <strong>the</strong> Value of People’ in 2009 <strong>and</strong>2010; <strong>and</strong> through Methanex’s commitment to Responsible Care, we have built areputation for being an employer of choice <strong>and</strong> a good corporate citizen.We have also seen <strong>the</strong> value of our efforts through our ‘Mentoring Our Children’program, which engages young professionals in our organization as mentors forhigh potential secondary school students who are all <strong>from</strong> “humble means”. Itis amazing to see <strong>the</strong> positive changes in <strong>the</strong> lives of <strong>the</strong>se children as well as<strong>the</strong> personal growth of our young professionals. It is so rewarding to see <strong>the</strong>innovation of our professionals, <strong>the</strong> engagement of <strong>the</strong> students, <strong>the</strong>ir families<strong>and</strong> <strong>the</strong> entire organization <strong>and</strong> especially <strong>the</strong> desire by all “to live; to love; to learn<strong>and</strong> to leave a legacy”. We also partner with Habitat for Humanity to build <strong>and</strong>renovate homes for <strong>the</strong> families of <strong>the</strong>se students in <strong>the</strong> program, so that <strong>the</strong>ycan all learn <strong>and</strong> live in a comfortable environment. Imagine how powerful it isfor an employee here to be part of that experience. When <strong>the</strong>y come back into<strong>the</strong> company, work means more than earning a salary; it is about developing anindividual, a family, a society <strong>and</strong> a corporation.45
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>Q: If you look around in <strong>the</strong> Private Sector in <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong>, would you say that <strong>the</strong> local businesscommunity is sufficiently engaged in CSR?CP: A lot of what is done still feels like philanthropy. Howdoes society sustainably benefit <strong>from</strong> what you are tryingto do? And how does your organization <strong>and</strong> its people alsobenefit? If you cannot answer those two questions throughpartnering, <strong>the</strong>n you are not really doing CSR.As a member of <strong>the</strong> Chemical Industry Association ofCanada, Methanex uses its tagline of ‘A Responsible CareCompany’. Responsible Care is good business <strong>and</strong> socialresponsibility is an extension of it. We are a responsiblecare company <strong>and</strong> that covers safety, <strong>the</strong> environment,people, fence line communities <strong>and</strong> <strong>the</strong> wider society, <strong>the</strong>whole umbrella.Q: If you look at CSR <strong>and</strong> corporate volunteerismthrough <strong>the</strong> human resource lens, what are for you<strong>the</strong> tangible benefits that <strong>the</strong> company derives <strong>from</strong>mobilising volunteers among its staff?CP: You have to see how <strong>the</strong> light bulb goes off in aperson when <strong>the</strong>y can make a tangible difference to <strong>the</strong>life of ano<strong>the</strong>r human being. Volunteerism gives meaningto employees’ performance <strong>and</strong> workplace interactionbecause it builds leadership skills, teamwork <strong>and</strong> a specialcamaraderie that grows through social interaction. Veryimportantly, <strong>the</strong>ir values are aligned with those of <strong>the</strong>organization. This synergy makes volunteering easy; itmakes devoting <strong>the</strong>ir 9/80 days off to community-giving aneasy choice.Q: It seems that you haven’t got any problems to mobilisecorporate volunteers <strong>and</strong> that <strong>the</strong>re is an outpouring<strong>and</strong> an interest <strong>and</strong> a high degree of motivation. A lotof o<strong>the</strong>r companies have expressed frustration over<strong>the</strong> difficulty of going beyond <strong>the</strong> ‘usual suspects’, <strong>the</strong>h<strong>and</strong>ful of employees who always volunteer.CP: In terms of volunteerism, <strong>the</strong>re will always be <strong>the</strong>usual suspects but you have to find ways of bringing morepeople into <strong>the</strong> limelight. As a CEO, I lead <strong>the</strong> charge ingetting more employees engaged in volunteer efforts. <strong>The</strong>biggest CSR leader in <strong>the</strong> corporation has to be <strong>the</strong> CEO.My presence at every function <strong>and</strong> weekend sessions goesa long way in showing that I care. Internally, <strong>the</strong> care givento employees’ well-being <strong>and</strong> health, particularly throughan onsite state-of-<strong>the</strong>-art wellness facility, cafeteria <strong>and</strong>medical centre, is causing <strong>the</strong>m to reflect on how fortunate<strong>the</strong>y are. Recognition of volunteers by <strong>the</strong> company <strong>and</strong><strong>the</strong>ir peers is also motivating more persons in giving backto o<strong>the</strong>rs who are less fortunate.Q: What is your view on <strong>the</strong> nonprofit organizations<strong>and</strong> <strong>the</strong>ir capacity to become partners for businesses?CP: You cannot partner with every NGO. You can actphilanthropically towards NGOs but you cannot enter intotrue partnerships with too many NGOs because <strong>the</strong>y haveto fit <strong>the</strong> social fabric of your organization. For example,our employees are more inclined to projects which <strong>the</strong>ycan identify with <strong>and</strong> invest sweat equity in – like building<strong>and</strong> painting houses for students <strong>and</strong> <strong>the</strong>ir families, inconjunction with Habitat for Humanity. <strong>The</strong>y hesitate to helpsome NGOs because monthly salary deductions feel tooimpersonal. <strong>The</strong>refore, it needs to be an NGO that meets<strong>the</strong> social psyche of your organization.46
“Our process for supporting NGOs is very rigorous. Every NGO has to develop a project plan for uswhich we evaluate. We have project officers who go out <strong>the</strong>re <strong>and</strong> evaluate <strong>the</strong> ability to actually execute.Once we have identified <strong>the</strong> terms of actually supporting a specific project each member of our executivemanagement team are allocated projects. So you are talking about people on <strong>the</strong> most senior level of<strong>the</strong> organisation who become <strong>the</strong> project sponsor. We have moved away <strong>from</strong> small projects to really bigprojects. Maybe it’s part of our training. <strong>The</strong> same way we lend money to somebody who has to pay backwe use <strong>the</strong> same kind of process to make sure <strong>the</strong> money is spent properly.”David Dulal-Whiteway, CEORepublic Bank48
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 3<strong>The</strong> Third Sector Revisited – Private Sector <strong>and</strong> Nonprofit Partnerships<strong>The</strong> Third Sector Revisited– Private Sector <strong>and</strong> NonprofitPartnershipsOver <strong>the</strong> past few years, partnerships between <strong>the</strong> business community <strong>and</strong>nonprofit organisations have become an increasingly integrated feature ofnon-philanthropic forms of CSR <strong>and</strong> an important configuration of externalsustainability activities <strong>and</strong> <strong>the</strong>ir implementation at least in foreign markets. Incontrast, four years ago <strong>the</strong> situation with respect to corporate collaboration withCivil Society Organizations (CSOs) in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> was described in <strong>the</strong>2008 <strong>UNDP</strong> CSR Mapping Report as “limited” particularly in <strong>the</strong> “planning processof sponsored programmes.” 27 Partnerships have been defined as “a commitmentby a corporation or a group of corporations to work with an organisation <strong>from</strong>a different economic sector (public <strong>and</strong> private) <strong>and</strong> characterized as involving“a commitment of resources – time <strong>and</strong> effort – by individuals <strong>from</strong> all partnerorganisations.” 28CHAPTER 3While businesses see NGOs aseffective drivers for CSR - 37.1% ofCEOs expressed this view – NGOsare also legitimizing companies’efforts to secure a license to operate inlocal communities. If conceptualisedmethodologically with expectationson both sides managed in a timelyfashion, social partnering canbecome a rewarding co-productionof developmental gains. Many NGOspossess community access <strong>and</strong> adegree of specialised knowledge thatcompanies do not have availablein-house but often depend on in<strong>the</strong> implementation of <strong>the</strong>ir CSRprogrammes. In turn, companieshave <strong>the</strong> ability to mobilize additionalhuman resources in <strong>the</strong> form ofcorporate volunteers, provide vitallyimportant financial support toprojects <strong>and</strong>, through <strong>the</strong>ir technical<strong>and</strong> business skills, may be ableto assist nonprofit organisationsalso in <strong>the</strong> area of organisationaldevelopment. Govind Maharaj, CEOof Eastern Commercial L<strong>and</strong>s Ltd.says about his own NGO experience:“I think <strong>the</strong> NGOs are doing a goodjob given <strong>the</strong>ir limited resources bothin terms of capacity <strong>and</strong> funding.We for example work with SERVOLto achieve two purposes. Firstly, toget <strong>the</strong> people of that organizationout into <strong>the</strong> business world to learna skill or to become more aware ofhow a business runs <strong>and</strong> it also givesus a pool for recruitment. Nonprofitorganisations could do a lot betterthough if <strong>the</strong>ir capacity was enhanced<strong>and</strong> <strong>the</strong>ir funding was increased.”While partnerships with <strong>the</strong> PrivateSector have undoubtedly <strong>the</strong> potentialto address <strong>the</strong> issues of capacity gaps<strong>and</strong> financial pressure, <strong>the</strong>y also leadto important gains for NGOs in <strong>the</strong>area of organizational credibility <strong>and</strong>prestige when teaming up with a wellknowncorporate entity. While NGOsare able to secure key financial support<strong>and</strong> enhance <strong>and</strong> solidify <strong>the</strong>ir statuswithin <strong>the</strong> national developmentarena, <strong>the</strong>ir corporate partners areoften able to derive positive spin-offeffects in terms of <strong>the</strong>ir reputationalvalue <strong>and</strong> <strong>the</strong> creation of br<strong>and</strong> equitythrough corporate social marketing. 2927 <strong>UNDP</strong>/STCIC CSR Mapping Report, p.ix.28 S<strong>and</strong>ra Waddock, ‘Building Successful Partnerships, Sloan Management Review, Summer 1988, p.18.29 See Steve Hoeffler, Kevin Lane Keller, ‘Building Br<strong>and</strong> Equity Through Corporate Societal Marketing’, in: Journal of Public Policy & Marketing, Vol.21, No.12, Spring 2002, pp. 78-89.49
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 3<strong>The</strong> Third Sector Revisited – Private Sector <strong>and</strong> Nonprofit Partnerships“My wife <strong>and</strong> I started an organisation a while agowhich is located in Laventille <strong>and</strong> is called K.I.N.D.(Kids in Need of Direction). <strong>The</strong>re we deal with kidswho have social problems, emotional problems,learning problems <strong>and</strong> once you have successfullyaddressed those issues you are surprised how far<strong>the</strong>y can go. Some of <strong>the</strong>m just graduated <strong>from</strong>university. It started off with almost no hope,<strong>the</strong>y were outside <strong>the</strong> system <strong>and</strong> it just showsif <strong>the</strong>y have <strong>the</strong> right input <strong>and</strong> care. Where <strong>the</strong>organisation is today is way beyond <strong>the</strong> point wherewe started it, we have a staff of around twelvepeople. In terms of <strong>the</strong> funding, we are running<strong>the</strong> NGO now for fifteen years in Laventille whichis a hot-spot community <strong>and</strong> we have not receivedone cent ever <strong>from</strong> any government ministry <strong>and</strong>we have virtually given up to secure financialassistance <strong>from</strong> <strong>the</strong> government. We receive a lotof funding <strong>from</strong> foreign donors. We spend a lot oftime marketing <strong>and</strong> fundraising <strong>and</strong> writing letters<strong>and</strong> we sometimes feel that we are a marketingorganisation when we are a service organisation.”Daniel Scott, CEOAnthony P.Scott Ltd.However, partnerships are not a winwinarrangement by default. In order toachieve targeted outcomes <strong>and</strong> developsustainable partnership structures,both companies <strong>and</strong> nonprofitorganisations need to pay considerableattention to <strong>the</strong> process of partnerselection <strong>and</strong> its strategic context,<strong>the</strong> design of joint projects <strong>and</strong> <strong>the</strong>management of mutual expectations.Selecting <strong>the</strong> right partner NGO -something that “can be <strong>the</strong> resultof ei<strong>the</strong>r a planned or an emergentprocess” 30 - is a crucial pre-requisitefor successful collaboration betweenbusinesses <strong>and</strong> nonprofits. Finding <strong>the</strong>right match for joint activities basedon a partnership approach requiresalignment of strategic direction, aclear underst<strong>and</strong>ing of <strong>the</strong> sharedresponsibility on assignments, arecognition that organizationalsize matters on both sides of <strong>the</strong>partnership <strong>and</strong> a thorough graspof <strong>the</strong> mutual needs <strong>and</strong> pay-offexpectations. <strong>The</strong> longevity, regularity<strong>and</strong> nature of partnership-drivenjoint initiatives may vary <strong>from</strong> caseto case <strong>and</strong> a company’s nonprofit‘portfolio’ may be characterised bysome degree of diversity. Eugen Tiah,CEO of Phoenix Park Gas ProcessorsLtd. points out that “we do partnerwith traditional NGOs. Sometimes<strong>the</strong> partnership is an ongoing type ofrelationship <strong>and</strong> sometimes it’s of aproject nature in that we work over anumber of years on a particular project<strong>and</strong> see that through to completion.But our model is that we will partnerwith an NGO <strong>and</strong> we will define whatwe expect in terms of governance <strong>and</strong>st<strong>and</strong>ards of performance. We definewhat <strong>the</strong> deliverables are, we definehow <strong>the</strong>y will be delivered <strong>and</strong> we alsodefine what we will st<strong>and</strong> for <strong>and</strong> whatwe won’t st<strong>and</strong> for.”In o<strong>the</strong>r cases, focusing on one’s owncore business guides companies in<strong>the</strong>ir selection process of nonprofitpartners. Ingrid Lashley, CEO of<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> MortgageFinance Ltd. (TTMF) explains:“Habitat for Humanity is an NGO thatwe worked with very closely <strong>and</strong> onethat is in line with our business. Wetry to get people into a home, that iswhat we do as a business. Mortgagefinancing is <strong>the</strong> way we do it butour focus is always to put people inhomes. If we <strong>the</strong>refore have displacedboys we must find a home. If we havehomeless people we must find a home.If we have a home that is dilapidatedwe must contribute to building a30 Maria May Seitanidi, Andrew Crane, ‘Implementing CSR through partnerships: underst<strong>and</strong>ing <strong>the</strong> selection, design <strong>and</strong> institutionalisation of nonprofit-business partnerships’, Journal of BusinessEthics, Vol.5, No.2, Supplement 2, 2009, p.422.50
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 3<strong>The</strong> Third Sector Revisited – Private Sector <strong>and</strong> Nonprofit Partnershipsbetter home. Habitat is involved inall that so <strong>the</strong>y are a natural fit.” Thistype of congruence has been describedby some experts as a ‘cause fit’ which“involves a compatible positioningbetween <strong>the</strong> company <strong>and</strong> <strong>the</strong> causethat is based on an element of strategicsimilarity”. 31Contrasting with such an approachthat seeks to align a company’score business with its partnershipidentification <strong>and</strong> selection process,o<strong>the</strong>r corporate actors deal with<strong>the</strong> issue of nonprofit partnershipsin a more ad-hoc, reactive <strong>and</strong> lessformalised way. Michael Aboud,CEO of Amalgamated Security Ltd.explains: “<strong>The</strong> NGOs that we workwith would be <strong>the</strong> Living Waterscommunity <strong>and</strong> we would normallyrespond with whatever <strong>the</strong>y need<strong>from</strong> us. For example, if <strong>the</strong>y havea fair <strong>and</strong> <strong>the</strong>y want security or <strong>the</strong>ywant us to incorporate some of <strong>the</strong>irpeople in our mentoring programme<strong>the</strong>n we would facilitate that. We have,however, no formal agreement withany of <strong>the</strong> NGOs. We see NGOs as<strong>the</strong> conduits through which we canexecute some of our projects. If weare talking to our managers aboutour social engagement, we would ask<strong>the</strong>m to identify through <strong>the</strong> NGOs<strong>the</strong> things that <strong>the</strong>y would like to seehappening <strong>and</strong> to see if we can getinvolved in that. But it’s not formal.<strong>The</strong>y are important but <strong>the</strong>y are alsovery focused in what <strong>the</strong>y want todo which is not necessarily what Iwant to do. If <strong>the</strong> alignment is not<strong>the</strong>re, <strong>the</strong> project may never happenthrough <strong>the</strong>m. So <strong>the</strong>y may come tous with something where we feel thatthis is something that <strong>the</strong>y can do on<strong>the</strong>ir own <strong>and</strong> <strong>the</strong>y don’t need to bein partnership with us.” And askedabout <strong>the</strong> same aspect of formal <strong>and</strong>long-term partnership arrangementsbetween <strong>the</strong> world of profits <strong>and</strong><strong>the</strong> world of societal development,Norman Christie, President of bpTTelaborates: “Globally, <strong>the</strong> partnershipsbetween companies <strong>and</strong> NGOshaven’t really always focused on <strong>the</strong>notion of sustainability. Somehow <strong>the</strong>relationship tends to be in itself shorttermin focus. So, I believe that anevolution is required. NGOs might beevolving <strong>and</strong> might be getting betterbut <strong>the</strong>re are even more possibilitiesto develop that space so that when we(i.e. companies <strong>and</strong> NGOs) are talkingit is really a conversation about apartnership on long-term sustainableissues.”Since companies <strong>and</strong> nonprofits hail<strong>from</strong> different organizational cultures,<strong>the</strong> room for misunderst<strong>and</strong>ings,misaligned expectations, attemptsat dominating joint activities or <strong>the</strong>divergence of targets <strong>and</strong> objectivesis considerable. Suspicion, mistrust<strong>and</strong> apprehension are <strong>the</strong> likely byproductsof partnerships that lacksufficient preparation, information<strong>and</strong> expectation management.<strong>The</strong> problem of corporate micromanagingor at least <strong>the</strong> perceptionof corporate micro-managing ashighlighted in <strong>the</strong> previous casearises predominantly in situationsin which <strong>the</strong> company decides toadopt a programmatic approachinstead of pursuing a philanthropic<strong>and</strong> grant-making model of supportfor social <strong>and</strong> environmental causes.Combining <strong>the</strong> two approaches,Nicolas Galt, President of <strong>the</strong> TSLGroup of companies says abouthis company’s support for nongovernmentalorganisations: “Inso far as NGOs are concerned,our involvement has been largelymentoring, time based <strong>and</strong> somewhatfinancial. We use our experience inbusiness <strong>and</strong> our ability to underst<strong>and</strong>a business proposition to adviseyoung start-ups how to deal with this.“Managing expectationson both sides of <strong>the</strong>partnership withregards to <strong>the</strong> levelof organizationalcommitment, to <strong>the</strong>output produced <strong>and</strong>outcomes generated aswell as to <strong>the</strong> resourcesallocated will determineif volunteer projectsbecome reasons forcelebration or a triggerfor corporate hang-over.”Roadmap to CorporateVolunteering- 6 Steps Towards Developingan Employee VolunteerProgramme<strong>UNDP</strong> <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>201131 Ida E. Berger, Peggy H. Cunningham, Minette E. Drumwright, ‘Social Alliances: Company/Nonprofit Collaboration’, California Management Review, Vol.47, No.1, Fall 2004, p.74.51
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 3<strong>The</strong> Third Sector Revisited – Private Sector <strong>and</strong> Nonprofit Partnerships<strong>The</strong> United Way –Nonprofit Funding <strong>and</strong> Charitable Giving“What interested us when we first got involved with United Way on <strong>the</strong> upside was <strong>the</strong>concept of UWTT’s vetting of charitable organisations to ensure that <strong>the</strong> organisations<strong>and</strong> environment were bona fide. <strong>The</strong> downside was <strong>the</strong> knowledge that a portion of<strong>the</strong> money being collected would be used for administrative purposes. In short, whenwe spent a dollar on charitable organizations <strong>the</strong> full dollar goes <strong>the</strong>re but if we sentit through United Way it’s probably discounted by <strong>the</strong> administrative costs of <strong>the</strong>organization. We also realised, on <strong>the</strong> o<strong>the</strong>r side, that <strong>the</strong>re are a number of NGOs in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> that are receiving funds <strong>from</strong> government <strong>and</strong> <strong>from</strong> organisationssuch as ours to support <strong>the</strong>ir efforts but in some of <strong>the</strong>se institutions those fundsactually disappear into <strong>the</strong> pockets of persons that are running <strong>the</strong> show.So United Way appealed to us in that <strong>the</strong>y were vetting <strong>the</strong>se things, it is properlyorganised <strong>and</strong> administered <strong>and</strong> made sure that <strong>the</strong> money was well spent. <strong>The</strong>re wasyet ano<strong>the</strong>r appealing area of <strong>the</strong> whole thing <strong>and</strong> that is that an organisation as smallas ours gets inundated every single week with requests for charitable donations <strong>and</strong>it was somewhat easier for us to subscribe to United Way <strong>and</strong> to create a st<strong>and</strong>ardletter to say to <strong>the</strong> majority of <strong>the</strong>m that we are already working with United Way <strong>and</strong>suggests through this medium that <strong>the</strong>y go through <strong>the</strong> United Way AccreditationProgramme. By so doing, <strong>the</strong>y in turn could be certified <strong>and</strong> accredited for United Waysupport on a continuing basis.”Nicolas Galt, PresidentTCL Group of Companies52
Those requests would come through institutionswith which we are involved like <strong>the</strong> Youth BusinessTrust. On occasion <strong>the</strong>se come directly to us aswell.” However, not all companies engage in socialpartnerships with NGOs. Norman Sabga, Chairmanof <strong>the</strong> Ansa McAl Group of Companies says:“Though we may partner with certain NGOs <strong>from</strong>time to time, we think that we are large enough to doour own thing. That’s because of our own capacity,recognition for what we do, recognition for who weare <strong>and</strong> what we want to do. This has very little todo with <strong>the</strong> quality of <strong>the</strong> nonprofit partners but ismore about us being able to identify what we wantto do. In addition to which working with some of <strong>the</strong>larger organisations, a substantial amount of whatyou put into <strong>the</strong> pot goes into <strong>the</strong>ir administration.We think we can do a lot more doing it ourselves.”Companies who seek to develop some degree ofprogrammatic input <strong>and</strong> content for implementation<strong>the</strong>reby going beyond <strong>the</strong> frontiers of traditionalphilanthropy often do so by establishing <strong>the</strong>ir ownfoundations as nonprofit delivery vehicles as is <strong>the</strong>case with Ansa McAl or <strong>the</strong> telecommunicationsprovider Digicel. Such corporate-driven nonprofitorganisations created for <strong>the</strong> launch, oversight <strong>and</strong>management of sustainability initiatives as well as<strong>the</strong> area of sponsorship <strong>and</strong> charitable giving enablecompanies to engage with civil society organisationsin supporting roles while also pursuing <strong>the</strong>ir own CSRactivities <strong>and</strong> formats. <strong>The</strong> Ansa McAl Foundation’sannual Anthony N. Sabga Caribbean Awards forExcellence are an illustration of <strong>the</strong> latter.“We support a steelb<strong>and</strong> group <strong>and</strong>when you do that you are doingsome community developmentas well as culture in terms of<strong>the</strong> way we operate with <strong>the</strong>mbecause we are integral partof <strong>the</strong>ir organization. We haverepresentatives that sit on <strong>the</strong>irboard. <strong>The</strong> role that pan plays in <strong>the</strong>areas that we support in Laventille,it really helps to bring people off<strong>the</strong> streets.”Errol Le Blanc, CEOUnicomer53
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 3<strong>The</strong> Third Sector Revisited – Private Sector <strong>and</strong> Nonprofit PartnershipsCapacity-Development for NonprofitOrganizations through Corporate VolunteeringCase StudyACCA (Association of Chartered Certified Accountants) is <strong>the</strong> global body for professional accountants.We support our 147,000 members <strong>and</strong> 424,000 students in 170 countries, through a network of83 national offices <strong>and</strong> centres. ACCA Caribbean is one such national office supporting 22,000members, students <strong>and</strong> affiliates in <strong>the</strong> region.While CSR is incorporated into <strong>the</strong> operational strategy of ACCA, at a national <strong>and</strong> regional level,<strong>the</strong> Caribbean office sought meaningful ways in which to impact in a positive way on <strong>the</strong> widersociety. <strong>The</strong> challenge was to find an approach closely related to our core business that wouldnot only have <strong>the</strong> required impact at a social level but also be sustainable. Organisational capacitybuilding among local NGOs was identified as a possible area within which we could make <strong>the</strong> mostmeaningful impact. Many such agencies provide much needed support to those most at risk inlocal communities, yet are hampered by a lack of access to funding <strong>from</strong> international organizationsbecause of poor or inadequate financial <strong>and</strong> administrative record keeping practices. As such, a largenumber of <strong>the</strong>m are not sustainable in <strong>the</strong> long term.<strong>The</strong> particular challenges faced by NGOs presented an ideal opportunity for a capacity building exercisebased <strong>the</strong> premise of skills based volunteering. One within which <strong>the</strong> accounting <strong>and</strong> managementskills of ACCA affiliates would be matched with <strong>the</strong> specific organisational needs of local nonprofitorganisations. Such an intervention could bring long term <strong>and</strong> sustainable benefit to communitiesby streng<strong>the</strong>ning <strong>the</strong> capacity of <strong>the</strong> NGOs that serve <strong>the</strong>m <strong>and</strong> to ACCA affiliates by providingopportunities to gain important <strong>and</strong> relevant work experience through volunteer assignments.<strong>The</strong> pilot phase of this project was launched in March of 2011 <strong>and</strong> ran for a 6-month period afterwhich an assessment of its success <strong>and</strong> <strong>the</strong> possibility of expansion would be examined. Ourdecision to partner with <strong>the</strong> United Nations Volunteer Programme (UNV) <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> wasbased on <strong>the</strong> substantial work <strong>the</strong>y have done <strong>and</strong> continue to do to raise awareness locally on <strong>the</strong>area of corporate volunteerism along with <strong>the</strong>ir knowledge of <strong>the</strong> local NGO sector.In <strong>the</strong> initial stages, a beneficiary NGO – <strong>The</strong> Just Because Foundation - was identified becauseof <strong>the</strong>ir seemingly immediate readiness for such an intervention. A thorough assessment of <strong>the</strong>irneeds was <strong>the</strong>n conducted <strong>the</strong> results of which were used to determine <strong>the</strong> specific skills required<strong>from</strong> <strong>the</strong> volunteer as well as <strong>the</strong> deliverables.Once <strong>the</strong> skill set had been determined, we created a resource pool of affiliates who not onlymatched <strong>the</strong> skill requirement but were also interested in volunteering. <strong>The</strong> selected c<strong>and</strong>idatewas subsequently presented with a work plan, a monthly reporting structure <strong>and</strong> stated deliverableswhich included completed, audit-ready financial accounts for identified periods, an operations manual<strong>and</strong> a chart of accounts. Monthly review meetings were held <strong>and</strong> challenges dealt with as <strong>the</strong>yarose.In conclusion, <strong>the</strong> project exceeded expectations <strong>and</strong> provided an excellent template for similarinitiatives in <strong>the</strong> future.Lesley John, Marketing ManagerACCA Caribbean54
Photo: Daniel Alvarez/ Shutterstock.com“We agree that in pursuit of its legitimate activities <strong>the</strong> private sector, including both large <strong>and</strong> smallcompanies, has a duty to contribute to <strong>the</strong> evolution of equitable <strong>and</strong> sustainable communities <strong>and</strong>societies.”Johannesburg Declaration on Sustainable Development 200256
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate VolunteeringManaging Human Capital throughCSR – <strong>The</strong> Business Case forCorporate VolunteeringCHAPTER 4<strong>The</strong> field of corporate volunteering <strong>and</strong> employee engagement has gainedincreasing popularity among CSR managers <strong>and</strong> sustainability advocates inrecent years. Many corporations in larger markets are placing more <strong>and</strong> moreemphasis on <strong>the</strong> mobilization of <strong>the</strong>ir employees for social outreach activities<strong>and</strong> environmental conservation programmes <strong>and</strong> some multinational companieslike IBM or pharmaceutical giant Novartis have even gone as far as undertakingproject-type development work on a global scale sending <strong>the</strong>ir staff into remotecorners of <strong>the</strong> world to utilise <strong>the</strong>ir skills outside <strong>the</strong> domestic corporateframework. 32 CEOs in leading manufacturing hubs <strong>and</strong> large consumer marketshave increasingly begun to see employees as <strong>the</strong>ir companies’ personified socialconscience <strong>and</strong> it is through corporate volunteers that <strong>the</strong> business communitycontinues to explore new <strong>and</strong> more pro-active forms of corporate social outreachdifferent <strong>from</strong> conventional forms of private sector contributions to society suchas charitable giving.<strong>The</strong> idea of corporate citizenship haswidened its appeal in many parts of<strong>the</strong> global marketplace <strong>and</strong> manycompany leaders have begun to realisethat <strong>the</strong> mobilization of staff forvolunteer projects could sustainablyaddress social needs while paying acommercial dividend in <strong>the</strong> mediumtolong-term. In <strong>the</strong> words of CSRscholar Kenn Allen: “Businesses getcredit for what <strong>the</strong>y are contributingto <strong>the</strong> community <strong>and</strong> for <strong>the</strong>opportunities for fulfilment <strong>and</strong>personal development <strong>the</strong>y areoffering <strong>the</strong>ir workers while <strong>the</strong>re isalso acceptance that businesses canfairly expect a ‘return on investment’<strong>from</strong> this commitment. 33In this win-win situation, <strong>the</strong> benefits ofcorporate volunteerism to communitylife are considerable <strong>and</strong> it has longbeen recognised that employeevolunteers have <strong>the</strong> potential to makea significant contribution towardssocial development on communitylevel <strong>and</strong> <strong>the</strong>refore to <strong>the</strong> achievementof national development objectives.<strong>The</strong> principles <strong>and</strong> guidelinesenshrined in <strong>the</strong> 2002 World Summiton Sustainable Development <strong>and</strong>in <strong>the</strong> Millennium DevelopmentGoals (MDGs) campaign have beenproviding universal frameworksfor corporate responsibility <strong>and</strong>, inparticular, <strong>the</strong> activities of corporatevolunteers. Little disagreement existswith respect to <strong>the</strong> business benefitsof corporate volunteering. <strong>The</strong> mosttangible gains are usually being madewithin <strong>the</strong> company thus formingpart of what is commonly referred toas ‘Internal CSR’. Benefits range <strong>from</strong>increased level of individual motivationof staff to higher rates of retention, agreater degree of innovative practices,streng<strong>the</strong>ned corporate reputation<strong>and</strong> improved customer relations.In <strong>the</strong> words of A. Norman Sabga,Chairman <strong>and</strong> CEO of <strong>the</strong> AnsaMcAl Group of Companies: “If one ofour organisations, for instance Abeladopted an orphanage in Chaguanas,32 See ‘Big-Hearted Blue’, <strong>The</strong> Economist, 28th October 2010.33 Kenn Allen, ‘<strong>The</strong> social case for corporate volunteering’, Australian Journal on Volunteering, Vol.8, No.1, 2003, p.58.57
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteering“Benefits of CorporateVolunteering• Provides creativeopportunitiesfor professionaldevelopment• Deepens relationshipwith existing strategicpartners• Builds br<strong>and</strong>awareness <strong>and</strong>enhances <strong>the</strong>company’s effortsto be seen as a goodcorporate citizen• Makes a positivedifference in <strong>the</strong>communities inwhich <strong>the</strong> companyoperates• Employeeswillingly take up<strong>the</strong> opportunity tovolunteer one dayevery year for charityor to give back to <strong>the</strong>community.”Dennis Evans, CEOCitibankgetting our people involved in thatprocess brings <strong>the</strong>m toge<strong>the</strong>r <strong>and</strong>creates a bond in terms of a family.<strong>The</strong>refore, you are doing good but youare also building an organization. So<strong>the</strong>re is a benefit to us as well. Yes, itmakes us <strong>and</strong> our employees feel thatwe are giving back but it also buildsa strong bond amongst our people.Working toge<strong>the</strong>r, playing toge<strong>the</strong>r,being conscientious toge<strong>the</strong>r in termsof society <strong>and</strong> <strong>the</strong> environment buildsa better team.” Wayne Dass, CEOof credit rating agency CariCRIS,shares a similar belief: “Sometimes<strong>the</strong> business benefits of corporatevolunteering are not direct, <strong>the</strong>y comeback in an indirect way. When youstart to get into volunteering, yougo beyond yourself <strong>and</strong> I think thatdevelops in you a certain mindset, acertain caring about things beyondyourself. I think that <strong>the</strong>n feeds backinto <strong>the</strong> organization. When you havea person like that coming back into<strong>the</strong> organization, <strong>the</strong>se persons, <strong>the</strong>way <strong>the</strong>y operate, <strong>the</strong> things <strong>the</strong>y say,<strong>the</strong> comments that <strong>the</strong>y will make ina team meeting will spread to o<strong>the</strong>rpeople too. It streng<strong>the</strong>ns team work,it widens <strong>the</strong>ir network of contacts, itmakes <strong>the</strong>m realize that business doesnot exist in isolation but that <strong>the</strong>re is awider world outside <strong>the</strong>re that one cantap into <strong>and</strong> bring <strong>the</strong> benefits of thatexperience back into <strong>the</strong> organization.”And of course, <strong>the</strong>re is <strong>the</strong> importantaspect of companies benefiting <strong>from</strong>greater levels of loyalty, dedication<strong>and</strong> commitment of <strong>the</strong>ir employeesresulting <strong>from</strong> <strong>the</strong> fact that oftenCSR programmes <strong>and</strong> an employer’sattention to <strong>the</strong> principles of ethicalbehaviour are positively perceived by<strong>the</strong> workforce as making a positivedifference in <strong>the</strong> lives of citizens inneed. In o<strong>the</strong>r words, corporate imageimpacts on individual commitment.<strong>The</strong> personal attitude of CEOs towards<strong>the</strong> very idea of civic engagement <strong>and</strong><strong>the</strong> personal volunteer history of seniormanagers are important indicators for<strong>the</strong> level of acceptance, underst<strong>and</strong>ing<strong>and</strong> support that members of <strong>the</strong>boardroom are prepared to extendto volunteer initiatives within <strong>the</strong>irown companies. 85.7% of all CEOsinterviewed for this report wenton record as saying that <strong>the</strong>y hadpreviously volunteered as privateindividuals in support of publicprojects. Such personal involvementwould have sensitized managers to <strong>the</strong>public need for volunteer assistance,to <strong>the</strong> social <strong>and</strong> infrastructuralchallenges experienced by manycommunities <strong>and</strong> to <strong>the</strong> value of civicengagement for building more stable<strong>and</strong> inclusive societies (<strong>the</strong> latter anobvious pre-condition for successfulbusiness operations). Arguably, CEOswho have been exposed to voluntaryaction as private individuals are morelikely to lead efforts of integrating<strong>the</strong> principles of an individual aswell as organisational social <strong>and</strong>environmental commitment into <strong>the</strong>ircorporate culture.Have you ever volunteered as a private individual insupport of a public project?14.3%85.7%YesNo58
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate VolunteeringEven more CEOs responded in <strong>the</strong>affirmative when it came to <strong>the</strong>irpersonal volunteer engagement in <strong>the</strong>corporate realm before <strong>the</strong>y becameCEOs. 91.2% had been corporatevolunteers while still being membersof <strong>the</strong> general workforce beforearriving in <strong>the</strong>ir senior positions.At first sight, this high level ofpersonal involvement of CEOs involunteer activities suggests thatsuch commitment must have ledto <strong>the</strong> emergence of sustainablelevels of corporate volunteerismdocumented in a high number ofvolunteer programmes in <strong>the</strong> PrivateSector. However, <strong>the</strong> evidence showsthat company volunteering remainsan activity that takes places largelyoutside of programmatic frameworks<strong>and</strong> with little or no connection tocore business activities. In response to<strong>the</strong> question about <strong>the</strong> existence of anofficial volunteer programme within<strong>the</strong>ir companies, only 37.1% of allCEOs were able to confirm that <strong>the</strong>ir‘corporate culture of caring’ entailedoperating a st<strong>and</strong>-alone volunteerprogramme with 62.9% answering‘no’. This figure presents a slightincrease <strong>from</strong> <strong>the</strong> 24.7% of companiesthat had confirmed <strong>the</strong> existence ofsuch a programme in <strong>the</strong> 2010 UNVSurvey on Corporate Volunteering in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>.<strong>The</strong> considerable personal involvementof CEOs in volunteer activities ei<strong>the</strong>rprivately or in <strong>the</strong> corporate realm thusdoes not equate to a greater degreeof ‘professionalisation’ of volunteermanagement or to <strong>the</strong> adoptionof a more programmatic approachtowards employee engagement. Ino<strong>the</strong>r words, <strong>the</strong> individual exposureof CEOs to volunteerism doesnot translate into <strong>the</strong> creation offully-fledged corporate volunteerprogrammes on an organisationalHave you ever volunteered in your role as anemployee before you came CEO?8.8%91.2%YesNolevel. Many corporate volunteerinitiatives remain ‘one-off’ <strong>and</strong> ‘adhoc’activities in nature with staffcontributions that do not necessarilyrequire specialised technical skillssuch as beach-cleanings or <strong>the</strong>painting of orphanages, homes for <strong>the</strong>elderly etc. As Noel Pemberton, CEOof energy company Ten Degrees NorthLtd. says: “It’s done very informally. Imay not even know about it. It’s donebut <strong>the</strong>re is no structured programme.It’s more internal than external. It’s notformalized but I know it is happening.”CEOs may well buy-in to <strong>the</strong> argumentabout <strong>the</strong> social value of employeevolunteering but may not necessarilysee <strong>the</strong> business benefits in suchactivities or realise <strong>the</strong>ir importancefor <strong>the</strong> development of a distinctcorporate culture. This may explainwhy <strong>the</strong> majority of companies havestill not filled <strong>the</strong> gap of establishinga programmatic framework forvolunteering, something that wouldrequire a considerable level of resourceallocation <strong>and</strong> <strong>the</strong> development ofstrategies, governance structures,training programmes <strong>and</strong> projectmanagement portfolios. Within <strong>the</strong>Does your company operate a corporate volunteerprogramme?62.9%37.1%YesNoone-third of companies that operatean official corporate volunteerprogramme, 64.3% of CEOs wereinvolved in <strong>the</strong>ir development <strong>and</strong>implementation.Some CEOs have stressed that eventhough senior management may see<strong>the</strong> value of employee volunteering,any more structured efforts toestablish volunteer managementprocesses within <strong>the</strong> company arelikely to encounter certain challenges.Daniel Scott, CEO of Anthony P.Scott, explains: “Most people wantto do something. But <strong>the</strong>re are twoproblems. One is that <strong>the</strong>y don’t knowwhat to do <strong>and</strong> secondly, once youdo it regularly, it tends to fall apart.Once <strong>the</strong> sacrifice needs to be made interms of time for example, it seems toa lot of people that it is cheaper to payfor o<strong>the</strong>rs to help than to volunteer<strong>the</strong>mselves.” O<strong>the</strong>r CEOs in expressingconcern with regards to developing anofficial volunteer programme within<strong>the</strong>ir company are more focusedon <strong>the</strong> aspect of industrial relationsas a possible stumbling block forcorporately driven volunteer activities.Robert Lazzari of Agostini Insurance59
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteering“To say that we havea formal volunteerprogramme in place nowthat would recognizepeople for volunteering,no. But if somebodyis doing somethingextraordinary <strong>and</strong> <strong>the</strong>irname is submitted to<strong>the</strong> CSR Committeerecognition will be given to<strong>the</strong>m. It’s a very informalarrangement that we haveright now. But we wouldnot prevent any staffmember who has cometo us with a project thatwill require him to investtime <strong>from</strong> work, we wouldnot deny that. We wouldsupport it in as many waysas we can.”Michael Aboud, CEOAmalgamated Security Ltd.Brokers Ltd. is frank in <strong>the</strong> descriptionof his worries: “I don’t think I wouldwant to go too far with my staffin terms of volunteering becauseinvariably <strong>the</strong> unions will use thatagainst you when you negotiate with<strong>the</strong>m. <strong>The</strong>y will say our staff did that(i.e. <strong>the</strong> volunteering) for <strong>the</strong> company<strong>and</strong> for your positive image when <strong>the</strong>yIf so, were you involved in its development <strong>and</strong>implementation?35.7%64.3%YesNowent <strong>and</strong> painted that school this year<strong>and</strong> <strong>the</strong>y will say you really shouldgive us 16 percent of a pay rise eventhough we agreed on a 15 percentsettlement prior. Or <strong>the</strong>y would come<strong>and</strong> be telling you that having hadstaff volunteering over <strong>the</strong> weekend,we really should pay <strong>the</strong>m overtimebecause <strong>the</strong> employees would havebeen representing Agostini <strong>and</strong> not<strong>the</strong>mselves. So I ra<strong>the</strong>r encourage mystaff to volunteer in <strong>the</strong> sense that ifyou live in a community with a schoolor something similar that needs help<strong>the</strong>n go <strong>and</strong> help.”At <strong>the</strong> same time, even skepticalCEOs are inclined to revisit <strong>the</strong> issueof corporate volunteering in <strong>the</strong>future. Robert Lazzari again: “Maybeit’s a selfish <strong>and</strong> a silly way. Maybe Ican do more within this company topromote <strong>and</strong> encourage my staff to getmore involved in social things. <strong>The</strong>only time this happens is when <strong>the</strong>Cancer Society has a walk <strong>and</strong> I amgiving a cheque to this organization<strong>and</strong> I am buying jerseys for everybody<strong>and</strong> I say let’s put toge<strong>the</strong>r a team offifty colleagues to walk around <strong>the</strong>savannah. My staff loves that. Butto say that I really have my staff somotivated <strong>and</strong> aware that I can saylet’s do something social because wework with SERVOL, I haven’t got tothat level <strong>and</strong> I know that that’s anarea that I should probably spend a bitmore time on.”While <strong>the</strong> development of skills asa tangible ‘take away’ of corporatevolunteering is being increasinglyrecognised by foreign managers <strong>and</strong>CSR practitioners, CEOs in <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong> have retained somescepticism as to <strong>the</strong> skill-buildingeffect of staff volunteerism. SaysJason Freakley, Managing Directorof Scrip J Printing Ltd.: “I have neverthought of employees as developingskills on <strong>the</strong>se projects. I would havemore thought of what kind of skillsdo <strong>the</strong>y have already that <strong>the</strong>y cancontribute to <strong>the</strong>se projects. And whatI would have seen is more of a positivecontribution by <strong>the</strong> organisation <strong>and</strong>its staff with <strong>the</strong>m being happy to dothose things <strong>and</strong> that sense of wellbeing<strong>and</strong> contribution I would havethought would come of it. I neverthought of <strong>the</strong>m getting additionalskills out of it.”60
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteering“When new employeesare coming in, <strong>the</strong>ybecome part of oursocial events club. Asmembers of this club,<strong>the</strong>y are automaticallyinvolved in <strong>the</strong> annualactivities. We don’t havea structured approachtowards volunteeringthough. When we havesomething coming upwe send out a memo.”Eric Kipps, CEOJaric Ltd.61
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteering“And if you don’t careabout young people <strong>the</strong>level of investment willbe reduced because ifyou are a society that isplagued with crime, ifyou have a society that isplagued with dishonesty<strong>the</strong>n investors don’twant to come <strong>and</strong> inves<strong>the</strong>re. If I want to exp<strong>and</strong>my business <strong>and</strong> I amlooking for a businesspartner, you think youwant to come <strong>and</strong> investin an environment wherehis employees could berobbed or murdered?What I am saying is letus help our communitiesto help <strong>the</strong>mselves tobecome better citizens<strong>and</strong> we will build ourbusiness through that.You can’t run a businessjust for now. Take care ofyour community <strong>and</strong> <strong>the</strong>ywill take care of you.”Ron Milford, CEOUnipetOutlook – <strong>The</strong> Road AheadRa<strong>the</strong>r than just being <strong>the</strong> personalpet project <strong>and</strong> an expression ofenlightened self-interest on <strong>the</strong> partof a few selected entrepreneurs,CSR has <strong>the</strong> potential to become aneffective tool in <strong>the</strong> h<strong>and</strong>s of corporatecompetitors, investment promoters,government officials <strong>and</strong> developmentspecialists. Especially after <strong>the</strong>turbulences of <strong>the</strong> internationalfinancial crisis in 2008, investmentcapital is increasingly gravitatingtowards ‘safe havens’ making a wellbut not over-regulated environmentin terms of sustainable managementprinciples <strong>the</strong> destination of choice.In this context, <strong>the</strong> development ofstructures, guidelines, policies <strong>and</strong>principles needs to be as collective<strong>and</strong> inclusive a stakeholder effort aspossible. Private sector <strong>and</strong> publicsector, members of <strong>the</strong> businesscommunity (particularly CEOs) <strong>and</strong>governmental decision-makers needto pool <strong>the</strong>ir resources <strong>and</strong> jointlyspearhead new developments for <strong>the</strong>greater institutionalization of CSR. <strong>The</strong>recently signed <strong>UNDP</strong>/MTI projectfor <strong>the</strong> development of a nationalCSR policy is an important step in <strong>the</strong>right direction. This initiative couldei<strong>the</strong>r help to prepare an even moresubstantial piece of legislation orsimply serve as an enabling operationalframework that will provide incentivesto initiate behavioural change<strong>and</strong> establish st<strong>and</strong>ards of goodcorporate citizenship. <strong>The</strong> good newsemerging <strong>from</strong> this report is thatCEOs are overwhelmingly in favourof government participation in <strong>the</strong>promotion <strong>and</strong> development of CSR.CEOs are <strong>the</strong> ‘chief architects’ ofcorporate strategy. In going forward,<strong>the</strong>y now need to engage more activelyin <strong>the</strong> greater integration of CSR intocompany strategy <strong>and</strong> to lead effortsamong stakeholders to push aheadwith <strong>the</strong> transition <strong>from</strong> philanthropicsupport for small-scale socialdevelopment initiatives, sportingevents <strong>and</strong> musical performancestowards a closer alignment ofWho in your company initiates, develops <strong>and</strong> manages <strong>the</strong> CSR activities <strong>and</strong> projectsincluding corporate volunteerism?80.0%70.0%60.0%67.6%50.0%40.0%35.3%30.0%20.0%10.0%0.0%14.7%23.5%8.8%17.6%0.0%CEOSeniorManagementHead ofHRHead ofCorporateCommunicationsHead ofCommunity,Government<strong>and</strong> ExternalRelationsCSRCommitteeHead ofBusinessDevelopment62
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteeringsustainable management practiceswith core business processes, keycompetencies <strong>and</strong> target audiences.CEOs are crucial for <strong>the</strong> success of<strong>the</strong>ir companies’ CSR programmes.In <strong>the</strong>ir majority, <strong>the</strong>y have alreadystepped up <strong>the</strong>ir involvement insustainability activities <strong>and</strong> haveshouldered responsibility forinitiating, developing <strong>and</strong> managingCSR projects.It is <strong>the</strong> CEO who sets <strong>the</strong> tone <strong>from</strong><strong>the</strong> top on questions of corporateculture <strong>and</strong> identity, strategicdirection <strong>and</strong> social positioning <strong>and</strong>it will be <strong>the</strong> CEO who needs todrive <strong>the</strong> essential shift <strong>from</strong> CSR asan issue of reputation managementto CSR as an issue of strategicmanagement. Greater sensitization ofsenior managers is required <strong>and</strong> majorCSR stakeholders such as <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong> Chamber of Industry<strong>and</strong> Commerce (TTCIC), EnergyChamber, Arthur Lok Jack GraduateSchool of Business <strong>and</strong> <strong>Trinidad</strong> <strong>and</strong><strong>Tobago</strong> Manufacturers Association(TTMA) need to specifically engagemembers of <strong>the</strong> boardroom on issuesof knowledge transfer, Best Practiceresearch <strong>and</strong> <strong>the</strong> participation inpeer exchange platforms such asworkshops, symposia <strong>and</strong> conferences.While in this survey, <strong>the</strong> majority ofCEOs asserted that CSR was ‘critical’for <strong>the</strong> commercial success of <strong>the</strong>ircompanies, <strong>the</strong> reality continuesto throw doubts on <strong>the</strong> level ofconviction that underpins suchexpressed beliefs. <strong>The</strong> list of items on<strong>the</strong> ‘still-to-do-list’ is substantial. <strong>The</strong>‘public relations element’ remains afundamental feature of companies’CSR practice in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong><strong>and</strong> <strong>the</strong> incorporation of sustainableapproaches into strategic planningprocesses continues to be weak.Managerial performance is often notlinked to <strong>the</strong> implementation of CSRactivities <strong>and</strong> <strong>the</strong> area of supply chainmanagement has still not sufficientlyabsorbed sustainability criteria into itsoperational matrix. In addition, CEOshave a crucial role to play in ensuringthat <strong>the</strong> company reports regularly onits corporate responsibility portfolioei<strong>the</strong>r as a section integrated into<strong>the</strong> annual report or in a st<strong>and</strong>alonefashion via <strong>the</strong> publication of asustainability report.Underst<strong>and</strong>ing commercial success<strong>and</strong> social progress as two sides of<strong>the</strong> same coin remains a challenge in<strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>. Michael Porterhas sought to reconcile <strong>the</strong>se twodimensions in a conceptual frameworkthat places <strong>the</strong> idea of multi-layeredvalue creation at <strong>the</strong> heart of corporateoperations in <strong>the</strong> social realm. “<strong>The</strong>solution lies in <strong>the</strong> principle ofshared value, which involves creatingeconomic value in a way that alsocreates value for society by addressingits needs <strong>and</strong> challenges” he writes<strong>and</strong> goes on to say that “businessesmust reconnect company success withsocial progress. Shared value is notsocial responsibility, philanthropy, oreven sustainability, but a new way toachieve economic success. It is noton <strong>the</strong> margin of what companies dobut at <strong>the</strong> center.” 34 It is precisely sucha shift that <strong>the</strong> local Private Sectorin <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> still needsto undergo <strong>and</strong> CEOs are crucial toinitiate such change.While structures <strong>and</strong> an enablingenvironment are importantfacilitating factors for CSR, individualleadership matters equally both inside<strong>the</strong> company <strong>and</strong> outside. Particularlyin <strong>the</strong> area of alliance building <strong>and</strong>inter-sectoral partnerships, CEOsshould become more directly involvedin determining <strong>the</strong> overall directionof <strong>the</strong>ir companies <strong>and</strong> – on anexecutive level - get involved in <strong>the</strong>process of identifying nonprofit <strong>and</strong>voluntary sector organizations thatpromise lasting synergy effects in <strong>the</strong>implementation of social outreachprogrammes <strong>and</strong> projects. Yet again,<strong>the</strong> low profile of senior managers<strong>and</strong> company owners with regardsto questions of partnering finds itsexpression in <strong>the</strong> fact that only onethirdof all interviewees regardedcivil society as a key driver in <strong>the</strong>irdecision-making process. Arguably,<strong>the</strong> capacity limitations of civil societyorganizations to engage Private Sectorpartners in social <strong>and</strong> environmentalinitiatives are considerable butCEOs should lead corporate effortsto find innovative ways to addressprecisely those shortcomingsthrough assistance in <strong>the</strong> area oforganizational development. <strong>The</strong>recently concluded corporatevolunteer project implemented by <strong>the</strong>Association of Certified CharteredAccountants (ACCA) in partnershipwith <strong>the</strong> United Nations VolunteerProgramme (UNV) <strong>and</strong> in support of<strong>the</strong> Diego Martin-based Just BecauseFoundation (JBF) has demonstrated<strong>the</strong> value of streng<strong>the</strong>ning <strong>the</strong> NGOsector’s organizational capacity <strong>and</strong> indoing so, to improve <strong>the</strong> level of servicedelivery through nonprofit providers.CEOs have an important lead role toplay in this regard <strong>and</strong> should be partof <strong>the</strong> process of partnership building<strong>from</strong> as early as possible a stage on.One dimension that this report hasnot specifically addressed is <strong>the</strong> issueof CSR among Small <strong>and</strong> MediumEnterprises (SMEs). Based on <strong>the</strong>findings of <strong>the</strong> 2008 Mapping Report,SME’s posed a considerably greaterchallenge to <strong>the</strong> community of CSRadvocates than large national <strong>and</strong>multinational companies. Not onlydid experience demonstrate <strong>the</strong> needfor making a convincing business34 Michael E. Porter, Mark R. Kramer, ‘Creating Shared Value’, January 2011, Harvard Business Review, http://hbr.org/2011/01/<strong>the</strong>-big-idea-creating-shared-value; also in Michael E. Porter, Mark R.Kramer, ‘Strategy <strong>and</strong> Society – <strong>The</strong> Link Between Competitive Advantage <strong>and</strong> Corporate Social Responsibility’, Harvard Business Review, December 2006, pp.78-92.63
<strong>The</strong> <strong>View</strong> <strong>from</strong> <strong>the</strong> <strong>Boardroom</strong> - CEO Study on Corporate Social Responsibility in <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong>CHAPTER 4Managing Human Capital through CSR – <strong>The</strong> Business Case for Corporate Volunteeringcase for <strong>the</strong> social involvement ofSMEs to company owners in this stillfamily-business-dominated sector.It also highlighted <strong>the</strong> question ofSMEs’ internal capacity-relatedlimitations for <strong>the</strong> implementation ofprogrammatic CSR activities. Evenmore important in smaller corporateenvironments, <strong>the</strong> CEO’s personalinvolvement <strong>and</strong> his/her knowledgeof <strong>and</strong> backing for sustainabilityprogrammes provide <strong>the</strong> operationalbasis for anything that happenswithin <strong>the</strong> company. <strong>The</strong> success offuture advocacy efforts among SMEsin <strong>Trinidad</strong> <strong>and</strong> <strong>Tobago</strong> cruciallydepends on <strong>the</strong> ability of CSRpromotingorganizations to securebuy-in for <strong>the</strong> idea of social outreach<strong>and</strong> environmental engagement <strong>from</strong>senior business leaders <strong>and</strong> membersof <strong>the</strong> entrepreneurial class.Finally, corporate volunteeringremains one of <strong>the</strong> most promisingsub-fields of CSR both globally as wellas in <strong>the</strong> local context of <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong>’s Private Sector. As in<strong>the</strong> aforementioned areas of CSR,CEO leadership is crucial for <strong>the</strong>mobilization of employee volunteers<strong>and</strong> <strong>the</strong> sustainability of volunteerprogramme. CEOs should bepersonally involved in <strong>the</strong> process ofprogramme development as well asproject execution providing financialsupport, contributing personal ideas<strong>and</strong> suggestions <strong>and</strong> mobilizing <strong>and</strong>motivating employees by way ofleading by example. Once CEOs fullyunderst<strong>and</strong> <strong>the</strong> business value thatvoluntary employee engagement cangenerate, <strong>the</strong>ir interest in developing<strong>the</strong> company’s social engagementportfolio will be significantlyheightened. In o<strong>the</strong>r words, <strong>the</strong>question is if T&T-based CEOs believethat instead of feeling that <strong>the</strong>y havean “obligation to give back” as close to60% of <strong>the</strong>ir U.S.-based counterpartsreported in a 2005 survey, 35 corporatevolunteering in <strong>the</strong>ir view presentsa value proposition that goes beyond<strong>the</strong> confines of public relations <strong>and</strong>reputational management but ra<strong>the</strong>rimpacts positively on <strong>the</strong> bottom linethrough its spin-off effects in corebusiness areas e.g. human resourcemanagement.Are you a member of <strong>the</strong> UN Global Compact?94.1%5.9%YesNoCEOs should also lead <strong>the</strong>ircompanies towards a stronger levelof participation in international CSRinitiatives. Despite <strong>the</strong> fact that inOctober 2010, <strong>the</strong> TTMA became<strong>the</strong> official secretariat for <strong>Trinidad</strong><strong>and</strong> <strong>Tobago</strong>’s local network of <strong>the</strong> UNGlobal Compact, <strong>the</strong> world’s probablymost recognised sustainabilitycampaign, only 5.9% of all CEOsinterviewed for this survey declaredmembership in this UN-backed CSRinitiative. Being embedded in regional<strong>and</strong> international structures <strong>and</strong>initiatives while operating in nationalmarkets would enable CEOs to followdevelopments in o<strong>the</strong>r countries,adopt a comparative perspectivewith regards to workable solutions<strong>and</strong> benefit <strong>from</strong> <strong>the</strong> assistance of aglobal network of Global Compactparticipants.<strong>The</strong> importance of discoveringone’s own employees as a majordriving force for CSR <strong>and</strong> <strong>the</strong> needfor acknowledging <strong>the</strong> importanceof securing workforce buy-in forsustainable action was alreadyrecognised in <strong>the</strong> 2008 <strong>UNDP</strong>/STCIC CSR Mapping Report when itstated that “<strong>the</strong> commitment of <strong>the</strong>employees […] must be ensured by <strong>the</strong>use of appropriate means (e.g. ethicstraining, discussion of managementdecisions which involve ethicalrationale, mentorship <strong>and</strong> promotionof employee volunteerism within <strong>the</strong>ircommunities). 36 In future, CEOs mustbe shouldering more responsibility forindividually leading <strong>the</strong> mobilization<strong>and</strong> recruitment drive for corporatevolunteers. One recent studyconcluded that “companies shouldtap into <strong>the</strong> enthusiasm, not only toincrease engagement levels amongstaff, but also to gain access to newideas <strong>and</strong> approaches at every levelof <strong>the</strong> business”. 37 In ‘harvesting’<strong>the</strong> creative potential of <strong>the</strong>ir staffmembers, CEOs must reach beyond<strong>the</strong> confines of <strong>the</strong> boardroom <strong>and</strong>successfully rally employees aroundsocial causes that transcend narrowbottom line thinking. Investing evenmore strongly into <strong>the</strong> promotionof sustainable business solutions,ethical corporate practices <strong>and</strong>social engagement can only benefitall stakeholders involved in <strong>the</strong>marketplace T&T <strong>and</strong> will help <strong>the</strong>business community to fully realise <strong>the</strong>potential of its symbiotic relationshipwith <strong>the</strong> social environment. This maylead to more business leaders agreeingwith Norman Sabga’s philosophy asChairman <strong>and</strong> CEO of <strong>the</strong> Ansa McAlGroup of Companies to engage inCSR namely to “give back to societysomething that we have benefited<strong>from</strong> in terms of being a profitablevibrant organization.”35 Can Corporate Volunteering Support <strong>the</strong> bottom Line? – <strong>The</strong> Challenge. <strong>The</strong> Opportunity. <strong>The</strong> Case for Investment, LBG Associates, September 2005, p.6.36 <strong>UNDP</strong>/STCIC Mapping Report, ibid, p.60.37 Corporate Sustainability – A Progress Report, In co-operation with <strong>the</strong> Economist Intelligence Unit, 2011, p.64