• Stakeholder involvement

Citizen participation and stakeholder involvement

This paper argues that the lack of responsibility in markets has led to today's current financial turmoil and recession in most international markets. The private sector has taken a huge blow but central control is not the answer. CSR provides the elements of a solution especially since its ideas were largely ignored by many of the big financial players to date. It suggests that CSR is a strategic approach to managing a company, not simply an add-on.

CSR is concerned with treating the stakeholders of a corporate body ethically and in a responsible manner. The recent turmoil in markets shows a role for more stakeholder engagement and legislation in previously unregulated areas. The author states that:

• a major stakeholder of a firm is its employees and CSR does not imply that downsizing should be prevented, but that companies must make an effort to organise layoffs in a socially responsible manner
• CSR urges transparency of operations through socially responsible reporting of activities such as informing shareholders and staff about off-balance sheet holding of debts
• CSR has not been given as much prominence, especially in the USA, simply because of the legal framework under which most corporations operate - US law actually inhibits executives and corporations from being socially responsible because the law baldly states that the purpose of the corporation is to make money for its shareholders, and any deviation from that could leave the corporation open to a lawsuit
• CSR has a positive impact on the intangible assets of a company and investing in CSR is not simply a cost but also a market opportunity - assets such as reputation and knowledge networks can turn into a source of market value and competitive advantage
• CSR has a long-term affect on improving a company's bottom line - there is a positive link between social and financial performance especially when looking at the increased relevance of intangible assets such as reputation and knowledge networks.

The paper suggests the private sector will contract in the short-term, but a growth area will be an increased compliance with CSR. A true stakeholder focus crystallised around reworked values is crucial for these difficult times and will help responsible companies eventually sail into calmer, safer waters.

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