CSR in Community Development: A System Under Delusion

Eche Munonye

In most developed and developing countries, it has become fashionable to view corporate social responsibility as the panacea for alleviating poverty, improving the welfare of lives and a responsibility towards the survival and corporate development of the community. Empirical evidence, however, had shown that the success of any organization in the twenty-first century depends to a large extent on the corporate bodies’ ability to set down and re-examine the various roles expected to be played by them towards the society’s well-being. That is, a meeting place of many interests such as the interests of not only the shareholders but also the stakeholders, the community in which it operates, its employees, and its directors whose interest must be reconciled and balanced.

However, without each of these various interest groups and their contributions, the organization will not be. For instance, without the government approving the incorporation and providing infrastructural facilities, the firm cannot take off. Neither can the firm start operation without land provided by the community, if the employees refuse to work, it would have nothing to produce and if the public (Customers) do not patronize it, it cannot make any headway, neither can it stay afloat if shareholders, creditors/suppliers do not supply the funds, raw materials, etc. thus, each of these groups is justified in wanting to get the highest reward for its contributions.

In Nigeria, several companies have implemented CSR programs aimed at community development. These initiatives often focus on areas such as education, healthcare, infrastructure development, and poverty alleviation. While some of these programs have achieved positive outcomes, it is true that there are limitations and challenges to their effectiveness. One of the key challenges is the lack of coordination and alignment between CSR initiatives and the broader development goals of the country. CSR programs are often driven by the individual priorities of companies and may not be aligned with the needs and priorities of the communities or the nation as a whole. This misalignment has continued to limit the long-term impact of CSR initiatives on community development.

While these efforts are commendable and almost all the time appreciated, it is to be noted that a major issue is the faking of data or making false claims by these organizations.  Indeed, the problem with an approach that lets business define corporate responsibility is that it is not grounded in a set of principles about what it means to be a responsible business. So, corporate social responsibility as we know it today, is whatever companies want it to be, and often, what is most convenient for them.

For all its success at prodding companies operating in today’s high risk environment to pay attention to their social and environmental roles, the CSR movement suffers from two fundamental problems.  One relates to a lack of standards defining what counts as corporate responsibility, leaving it up to business managers to decide. The second relates to the over-reliance on citizen oversight – sometimes referred to as ‘civil regulation’ – to make CSR work. These two problems are closely linked: because there are no clear standards for corporate responsibility, civil regulation cannot function well.

This definitional ambiguity presents problems not only for stakeholders seeking to hold companies accountable, but also for businesses themselves. John Ruggie, the author of the UN Guiding Principles for Business and Human Rights, noted that those companies that do not adopt a rights-based corporate responsibility programme “typically approach the recognition of rights as they would other social expectations, risks, and opportunities, determining which are most relevant to their business operations and devising their policies accordingly.” A discretionary approach leaves companies open to considerable risk, as evident in the numerous corporate lawsuits, protests, and criticism directed at companies that do not pay adequate attention to all human rights and community issues. As it is today, the concept of CSR rests on the idea that businesses operate with a social contract granted by society. Fulfilling that contract requires businesses to respond not only to their shareholders, but also more generally to civil society. Companies that do not behave responsibly in relation to civil society demands risk losing their ‘social license to operate’

So, you find that many CSR programs across the world, nay Nigeria are short-term and project-based, focusing on immediate outcomes rather than addressing the underlying systemic issues. Sustainable development requires long-term strategies that address root causes and promote capacity building within communities. Additionally, there can be issues with transparency and accountability in the implementation of CSR programs. In fact, it is a known fact that some, if not most companies engage in CSR activities primarily for public relations purposes or for tax rebate, without genuine commitment to community development. This lack of transparency and accountability undermines the potential positive impact of CSR initiatives. However, it is important to acknowledge that not all companies in Nigeria approach CSR in the same manner. There are organizations that have made substantial contributions to community development through sustainable initiatives, job creation, and capacity building. These companies have recognized the importance of aligning their business goals with the needs and aspirations of the communities they operate in.

To overcome these challenges, it is crucial for companies to adopt a more strategic approach to CSR in community development. This involves conducting thorough needs assessments, engaging with local stakeholders, aligning initiatives with national development priorities, and ensuring transparency and accountability in the implementation and monitoring of CSR programs. Furthermore, the government has a significant role to play in creating an enabling environment for effective monitoring of CSR. This includes establishing clear regulations and guidelines, promoting collaboration between companies and communities, and providing incentives for sustainable CSR practices.

Ultimately, while CSR has the potential to contribute to community development in Nigeria, it is essential to address the existing challenges and ensure that CSR initiatives are well-designed, sustainable, and aligned with the broader development goals of the nation.

Companies should prioritize long-term and sustainable projects that address the root causes of community challenges. This could involve partnering with local organizations and community members to identify the most pressing needs and co-create solutions that have a lasting impact. Fostering dialogue and engagement between companies, communities, and other stakeholders is crucial. By involving the affected communities in the decision-making process and seeking their input, companies can ensure that their CSR initiatives are aligned with the actual needs and aspirations of the people.

It is also very important that independent monitoring and evaluation of CSR projects should be encouraged to provide an objective assessment of their impact. This would help build trust and hold companies accountable for their commitments, while also enabling them to learn from successes and failures.

To make sure companies start taking CSR seriously, social and environmental reporting should be made mandatory and public. And more importantly, the public needs to hold companies accountable when they fail to keep their promises.

By taking these steps, Nigeria can unlock the true potential of CSR in community development, creating a more inclusive and sustainable future for its citizens. And this requires a collective effort from the government, civil society, and businesses to move beyond the delusion and work towards genuine and impactful CSR practices.