Saudi Companies in the 21st Century

This study assesses the relationship between business and society in Saudi Arabia within the context of Corporate Social Responsibility (CR). It highlights some of the key challenges and ways forward for corporates in Saudi Arabia and for business to be an effective driver for the long-term sustainable development of the Kingdom.

The report notes that Saudi companies are more engaged in social issues than what is actually reported or disclosed in public information. This lack of reporting has underrepresented Saudi CSR in international benchmark studies and indices giving the general impression that Saudi companies are not doing much in this field. It argues that despite the limitations, Saudi companies are still in a good position to move CSR in the right direction and assume a leadership role in the region. Unlike the experience of CSR in developed economies and other emerging economies, Saudi companies are not subject to adversarial tensions that pit business against society. There are also the prevalent values of generosity and goodwill. Saudi companies, therefore, are in an interesting position to influence the social context, rather than being reactive or in a crisis management mode.

To move forward, the study highlights a number of areas where Saudi companies need to pay greater attention. These include:

• companies need to be more strategic in their CSR activities. This requires serious organising for CSR and more systematic efforts to identify and prioritise the social issues for each business.
• there are different models of engaging depending on the choice of strategy and focus. They demonstrate a diversity of opportunities and approaches. Intelligent philanthropy and competitive CSR are just a few of the examples
• the Government and public authorities have an important role to play by enabling better framework conditions for the CSR movement to shape up. The message from business leaders is that the market incentives are not yet there for proactive companies, and bureaucratic obstacles still exist for companies that want to contribute to certain social and/or environmental issues
• Governmental procurement policies can surely help in that direction. Partnerships with the private sector on education and training are needed more than ever. Clarity of goals on issues such as women in the workplace is needed as well
• the Government can also provide national coherence to the CSR agenda by supporting nationwide forums and information platforms for exchange of ideas and experiences.