Those who have been stating for some time, as part of the confusion that still persists around this matter, that CSR centers its objective on the management of risks and also opportunities in the social, economic, environmental and labor spheres of organizations, are right.

But if this management is developed only as part of a company’s interests, with the objective of improving effi ciency and results, excellence in management will probably be achieved, but will not make the company responsible by itself. In order to manage this, it is not only necessary to bear in mind the internal dimension, but also that of the different stakeholders, especially that of society itself.

And it is recently in that fi eld where the activity of company foundations emerges strongly, the rise of companies’ social work with which the whole of

Corporate Social Responsibility is often confused, although it forms an important and integral part of it.

Projecting commitment with a responsible performance of the company through external social work decisively contributes to making the company a fully responsible organization. That is at least the opinion of Joan Josep Artells, General Manager of the Fundacion Salud, Innovacion y Sociedad (the Health, Innovation and Society Foundation) of Novartis, the pharmaceutical company, in Spain, who also states that all this should fi t with the strategic lines of the company’s activity, and must have a close relationship with them.

Yes to social work, no to mere sponsorshipBut also, social work itself has often been confused with social marketing (named by some as ‘marketing with a cause’) or sponsorships with which organizations

What are the keys to make social work an important support in the development of Corporate Social Responsibility plans? In which manner do these policies align themselves with the activity and business of a company? How do we differentiate good social work from marketing with a cause or a collection of sponsorships?

Novartis:The integration of social action and the management of foundations in the CSR policy

Public Affairs

Strategy DocumentsC06/2011

Cases

Document prepared by Corporate Excellence with reference to, among other sources, the intervention of Antonio Argandona (Economics professor and holder of the ‘la Caixa’ chair in CSR and Corporate Governance at IESE) and Joan Josep Artells (Director General of the Health, Innovation and Society Foundation of Novartis Spain) during the sessions of the Executive Education Program “Making Social Responsibility Work: The Cornerstone of Sustainable Business” organized by the IESE Business School in Barcelona in July 2011.

Cases 2

contribute economically. In this sense, sharing certain causes through the development of social work which is linked to causes that fit with the philosophy and activity of the company, trying to influence, in turn, on aspects which worry, trouble or constitute a need or aspiration for society or interest groups as a whole is also a completely valid, necessary and complementary way of crediting company responsibility.

‘Projecting commitment with a responsible performance through social work contributes to making the company a fully responsible organization.’

Social work may be seen as mere philanthropy if it is carried out in a separate way from the other CSR policies or from company activity itself, but implemented within the strategy framework of Corporate Social Responsibility it becomes a practical expression of the relationship, dialogue and attention process to stakeholders and the company itself, globally.

For that reason, it is important to differentiate it from the pure sponsorship of events or third party activities, to the extent that it can become a marketing, communication or image tool far less focused on strategy, with many more risks, less ambition in its objectives, rigor in its procedures and efficiency in its results, as it can lead the company to incur great costs which, in the end, may not be compatible with what may globally be expected from each of these.

The activity of the Novartis FoundationThe Foundation for Health, Innovation and Society (SIS), created in 1999, defines as its main mission to contribute to the development, modernization and sustainability of the public health system in Spain, as well as the creation of an independent and informed opinion in social and health policy through the development of its own research activities or in collaboration with other public and private organizations and institutions, within three fundamental spheres:

1. Social Work.2. Experimentation in organizational innovations.3. Diffusion of good practices in clinical

management and promotion of health.

Not in vain, the President of the Foundation and of Novartis Spain, Jesus Acebillo, believes that the corporate culture of the company and its social commitment can be summarized in only two words, “responsible innovation”, thereby uniting the company’s two strategic themes of action, which are the ‘what’,

innovation in the field of health for the improvement in people’s quality of life, and the ‘how’, the ethical and responsible action in order to achieve it.

The activity of the Foundation centers fundamentally on four large areas of activity:

1. Institutional cooperation: through networks of collaboration with relevant health, business and social agents establishing agreements.

2. International conferences, seminars and courses: spreading knowledge, bringing cultures together, comparing and adopting better practices.

3. In-house research: lines of research applied to social sciences for the attainment of shared objectives with institutional contributors.

4. Publications: compilation and circulation in report, monograph, magazine and collection formats of the investigative and formative activities.

And to make such a mission possible and develop these activities, the SIS Foundation works with the various interest groups connected to the fields of health and biomedical investigation, advising them, cooperating in joint projects o generating new unpublished information. Its five main stakeholders are:

1. Managers of the National Health System in Spain.2. Health departments in Spanish regions.3. User and patient organizations.4. Investigators and academics in the bioscience field.5. Innovative economic and sector authorities.

The Novartis Foundation also promotes open and plural debates, as well as participation exercises, discussion and negotiation groups among these stakeholders, in the following areas:

1. Internationalization of investigation and support to the pharmaceutical systems with a bioscience base.

2. Continuous and sustainable modernization of the health system and constant social legitimization of the public health service.

3. Participation of the health user in government agencies of the health system and autonomy of the patient.

The integration of social action and the management of foundations in the CSR policy

Fuente: Novartis, 2011.

“Health departments in Spanish regions and Health and Consumer

Ministry”“Managers and leaders of assistance

mechanisms in the National

Health System”

“National and International

academic leaders and investigators in the bioscience

field”

“Consumer, patient and community representative organizations”

“Industrial and economic authorities, innovative business

sectors”

FundaciónSalud

InnovaciónSociedad

Definición de stakeholders de la Fundación

Cases 3

4. Development of multi-departmental public health policies and intervention in determinant social factors of health.

‘Social work may be seen as mere philanthropy if it is carried out in a separate way from the other CSR policies or from company activity itself.’

Keys to evaluate the effectiveness of social workFor Antonio Argandona, Economics professor and holder of ‘la Caixa’ chair in CSR and Corporate Governance at IESE, there are four keys that must be taken into account when evaluating the relationship between company and foundation, between the strategic policy of the company, CSR and the action, contribution and participation in social aspects:

1. As in the case of CSR, the management of a company must be equally involved and supporting the entire process.

2. Priorities must be jointly established by all the staff departments in the company.

3. The social work must be aligned with the entire CSR policy and with the business, but this must not interfere in it.

4. The evaluation of the social work must be constant and included in a continuous process of internal and external audit.

And to correctly evaluate these projects it is necessary to take into account several key elements, fi nd and put forward the necessary information on each one and submit it to critical judgment:

1. The sector or fi eld in which there is collaboration: type of organizations, prior knowledge of the sector and existing contacts.

2. The problem in contributing to its solution: knowledge, experience and skills and prior participation.

3. The result to be achieved: concrete results that were to be obtained.

4. Activities to develop: establishing a complete list, stages and calendar.

5. The resources to be used: existing or additional requested, including human.

6. The assigned budget: correspondence of costs with activities and control undertaken.

7. The impact achieved: in participative management, in autonomous or independent tracking and in multiplied effects achieved.

The value of anticipation and cooperationThe case of Novartis and its foundation is also relevant to the extent that it highlights the importance of not only developing good CSR practices and social work in that which is essential to the company (essential responsibility, the ‘we must’) or in that which is expected of it (the ‘we have to’), but also in that which is desired from the organization (the ‘we can’), the root of excellence in this type of socially responsible practices, something especially important in the case of a sector which is regulated, like the one in which Novartis operates.

And it is there where the capacity to be ahead and respond to needs, expectations and demands in many cases not formulated or specifi ed by society or its interest groups is key, something which the SIS

The integration of social action and the management of foundations in the CSR policy

Corporate Responsibility ExcellenceNices to

have (can)

Enlightened self-interest (ought to)

Essentials (must)

Good Management Practices

Corpo-rate Phi-lantropy

Corporate

Responsibility beyond legal duties (wise

strategic decisions)

Make profi t and comply with applicable law and

regulation

Source: Ethics World, 2011.

The hierarchy of Corporate Responsibilities

Foundation carries out permanently through the process of constant dialogue and active listening, according to Josep Artells.

Along these same lines, the display of a cooperative strategy with the use of partner networks (not strategic alliances) in projects is also fundamental, when choosing them (they should agree with the strategy and culture of Novartis), motivating them (look for points in common), linking them (mutual agreements and knowledge) and evaluating them (periodically).

Conclusions: social work in line with CSRThe case of Novartis shows how through good planning, tracking and evaluation we can implement a number of social works using a foundation as an instrument to close the circle of Corporate Social Responsibility and contribute, in a responsible and ethical manner, to the activity, operations and its consequences in the environment, with a constant dialogue with interest groups and society, towards social improvement, directly or in collaboration with third parties in the company’s immediate sphere of action.

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