Download - Sizwe Nxasana - Making CSI Matter
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The Role of Business in DevelopmentDevelopment
Making CSI Matter Trialogue Conference 2012Trialogue Conference 2012
Sizwe Nxasana
May 2012
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Agenda
1. Structural Challenges
2. Why Corporates must get involved in development and CSI
3. Partnership and Collaboration
4. Volunteerism
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Agenda
1. Structural Challenges
2. Why Corporates must get involved in development and CSI
3. Partnership and Collaboration
4. Volunteerism
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South Africa's structural challengesg
SA is the world’s most unequal middle income country and the trend is increasing
POVERTY
UNEMPLOYMENT
EDUCATION
DEPENDENCE ON GRANTSGRANTS
2000 – 2011 average
Source: UNDP HDR REPORT 2011
one of the world’s highest gini coefficients
Source: UNDP HDR REPORT 2011
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South Africa's structural challengesg
POVERTY • Total number of unemployed is currently around
4.5 m people
UNEMPLOYMENT• Women are 1.2 times more likely to be
unemployed than men
EDUCATION• SA's labour force participation rate is 54.7%
compared with a world average of 64.1%.
DEPENDENCE ON GRANTS
p g
• Youth unemployment rate is 35.9% compared
with a world average of 12 6%GRANTS with a world average of 12.6%
• Only 1.2 million South Africans are self-
employedemployed
• By 2015 more than half of the working age
d lt ill till b t f kadults will still be out of work
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South Africa's structural challengesg
%POVERTY % Lower unemployment
rates associated
UNEMPLOYMENTwith higher
levels of education
EDUCATION
DEPENDENCE ON GRANTSGRANTS
The rate of unemployment is
worse in Free StateState,
Mpumalanga and Eastern Cape
Source: Stats SA, Q1 2012 Survey
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South Africa's structural challengesg
• Illiteracy rates currently stand at around 18% of adults over 15 years old (about 9-million adults are not functionally literate
POVERTY
UNEMPLOYMENT
not functionally literate
• While 65% of whites over 20 years old and 40% of Indians have a high school or higher qualification
EDUCATION
Indians have a high school or higher qualification, this figure is only 14% among blacks and 17% among the coloured population
DEPENDENCE ON GRANTS
• 1 out of 3 matriculants are unemployed
GRANTS • Student participation rate is almost 20% (proportion of 18- to 24-year olds in higher education• Whites 57%Whites 57%• Indians 45%• Blacks 13.3%• Coloureds 14 8%• Coloureds 14.8%
Source : StatsSA
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South Africa's structural challengesg
Growth in grants is acceleratingPOVERTY
UNEMPLOYMENT• Spending on social grants projected to reach R122bn in
FY2014/2015 – 3.2% of GDP
EDUCATION • 5.9 m tax payers are supporting 15.3 m people who get
DEPENDENCE ON GRANTS
grants – this is not sustainable
GRANTS• Recipients to reach 16.7 million in next three years
• No incentives to work – promoting a culture of
d ddependencySource : BUSA
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Agenda
1. Structural Challenges
2. Why Corporates must get involved in development and CSI
3. Partnership and Collaboration
4. Volunteerism
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Future of Capitalism• Impact of the global financial meltdown
p
• Increased social isolation
• Civic alienation
• Flaw of “Everyman for himself” mindset exposed
• Image of business fraternity damaged• Investors
• Customers
• Government
• General publicGeneral public
• Desperate need for business community to• Repair image
• Re-examine value system
• Give a “human face” to capitalism
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Why get involved in development and CSI
Customer Employees
Corporate
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
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Why get involved in development and CSI
• Meet customer needs• Establish strong customer grelationship
• Maintain strong consumer value• Sustainability
Customer Employees
Corporate
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
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Why get involved in development and CSI
•Working conditions•Employee engagementp y g g•Reciprocity•Volunteerism
Customer Employees
Corporate
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
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Why get involved in development and CSI
Customer Employees
Corporate
ShareholdersSociety
•Sustainability•Corporate Citizenship•Brand image
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
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Why get involved in development and CSI
Customer Employees
Corporate
ShareholdersSociety
•Accountability•CSI / Partnerships•Private•NGOs•Government•Society
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
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Types of CSI
Strategic/ P t hi /Partnership/ Integrated Approach
Market Driven
Corporate Philanthropy
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Types of CSI
Strategic/ P t hi /Partnership/ Integrated Approach
Market Driven
Corporate Philanthropy
• Act of genuine benevolence• Fund causes that touch the heart• No real strategic benefit• May receive favourable publicity
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Types of CSI
Strategic/ P t hi /Partnership/ Integrated Approach
Market Driven
Corporate Philanthropy
• Fund causes that will create good publicity• No or minimal strategic benefit irrelevant• Driven by marketing or corporate affair dept.
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Types of CSI
Strategic/ P t hi /Partnership/ Integrated Approach
Market Driven
Corporate Philanthropy • Invest in social causes that will enhance long-
term strategic position• Design their CSI programmes• Strategic benefits independent of publicity.
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Significant shift in relationship between private enterprise and societyprivate enterprise and society
Financial Performance
Environmental Performance
Social Performance
Ethical imperative towards
i t linvestors only
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Proper governance and management focus on social and ethical matterson social and ethical matters
Financial Performance
Environmental Performance
Social Performance
Responsible business
conduct and good
t
N C i A t 71 f 2008
corporate citizenship
• New Companies Act 71 of 2008• Came into force May 2011
• Approach sourced from King III Report on Corporate Governancepp g p p• Shift from ‘shareowner compact’ to ‘stakeholder compact’
• States that reputation is a company’s most significant asset
• Management and effective stakeholder engagement crucial• Management and effective stakeholder engagement crucial
• Company acting in a responsible and ethical manner leads to
• Good financial performance in long run
• Maintaining productive relationships with government and regulators
• Requirement to establish • Social and Ethics Committee
• Social and Advisory Panel to assist committee
• Ensures proper governance and management focus on social and ethical matters
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Reputation is keyp y
Source: 2012 Reputation Institute
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Agenda
1. Structural Challenges
2. Why Corporates must get involved in development and CSI
3. Partnership and Collaboration
4. Volunteerism
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Partnership and Collaboration Planet
• Corporate-to-Corporate level
p
Profit
People
• Not much has happened
• CSI viewed as competitive
• Failure to distinguish betweenFailure to distinguish between • sponsorship to benefit business
• “right thing to do”
• Corporate-to-Government level• Trust, a major factorj
• Foundation to build trust• Value importance of relationship
D l h d d i i t th• Develop shared and common vision together
• Invest in relationship and nurture it
• Honesty is vital
• Differences must be understood
• Focus on commonalities
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Partnership with Communities Planet
• Consultative manner
p
Profit
People
• Greater involvement from company
• More sustainable solutions for beneficiaries
• Need to talk and listen to communities• Understand intricacies of initiatives
• Design solutions for the communities
• Avoid imposing company/NGO-created solutions
• Takes more time to set up, implement and follow through
• Benefits of approach• Ensures beneficiaries receive most suitable and sustainable benefits
• Easier to gain deeper understanding of involvement areas
• Focus through fewer areas of specialisation
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Agenda
1. Structural Challenges
2. Why Corporates must get involved in development and CSI
3. Partnership and Collaboration
4. Volunteerism
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Volunteerism-Partnership with Employeesp p y
• Doing good must be embedded in the values
• Employee participation drives better employee engagement
• Leadership development tool• Leadership development tool
• If the company contributes 1% of its after tax profits employees can contribute 1% ofIf the company contributes 1% of its after tax profits, employees can contribute 1% of their work time to volunteerism. At least 3 days per year per employee.
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FirstRand Volunteers Programme Planet
• Falls under the FirstRand Foundation
g
Profit
People
• Launched in 2003
• Includes staff, “heart of the business”
• All four divisions participateAll four divisions participate
• Voluntarily donate both time and money
• More than R22 million contributed since launch
• Charity organizations selected by employees, across a range of sectors:• Orphaned and vulnerable children• Orphaned and vulnerable children
• Community engagement
• Health
• Education
• Community care
A i l lf• Animal welfare
• People with disabilities
• The elderlyy
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FirstRand Volunteers Programme Planet
• Collaboration between the four divisions encouraged
g
Profit
People
• Host annual group drives to • Maintain the momentum• Maintain the momentum
• Ensure sustainable difference to the needy
• Teams encouraged to share and give feedback on their success stories
• Chairman’s Volunteer Recognition Awards Programme• Run every second year
• Active volunteer teams and individuals invited to submit entriesActive volunteer teams and individuals invited to submit entries
• Hosts a “Community Conversation”• Run every second year
• For charity organizations supported across the group
F t f ti• Forma t of conversation• Do we help or hinder?
• How we can be of better support?
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Planet
Profit
People
“ there is ultimately a limit to how much regulation can do In the... there is ultimately a limit to how much regulation can do. In thefinal analysis, you could write all the rules you want, but there hasto be a philosophy of ethical behaviour that comes from humanbeings operating in a professional a ”beings operating in a professional way”
By William H Donaldson
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The Role of Business in DevelopmentDevelopment
Making CSI Matter Trialogue Conference 2012Trialogue Conference 2012
Sizwe Nxasana
May 2012