Corporate social responsibility and micro-economic reform

There remains, however, a glaring caveat here. By and large, business operates within the area of common business and community interest. We do so because our shareholders require it. We cannot expect them to tolerate management simply giving away company resources because that was thought to be a good idea. So we limit our activity to the overlap between the business and the community interest because it makes sense and passes the credibility test.

What Should Business Encourage Other Sectors To Do?

Business will be involved in community support more deeply and more prominently in the 21^st century. But it will look to others for where it can find common cause with its own interests. For their part, through a vast and heterogenous private foundation sector, wealthy Australians will inevitably become more involved in community support. Sometimes there will be strings attached, sometimes there won’t. There is no doubt that as adjustment to the new Australia proceeds, private community support will significantly outweigh corporate support and become the dominant partner with government here, as it is in the United States.

We are on the threshold of developing new alliances for business to meet its corporate social responsibility obligations in Australia. Alliances with private philanthropy are one dimension. In Rio Tinto’s case, we have organised some key philanthropic affinity networks with some of Australia’s leading private philanthropic family funds. They can do more if we are involved and vice versa. We have also agreed memoranda of understanding with Federal Government departments. For its part, for instance, Rio Tinto has entered into important bilateral relationships with environmental and community NGOs to ensure appropriate networks and outcomes. These include associations with bodies such as WWF, Earthwatch and so on.

Of course, what publicly listed companies can or should do is bound by the restrictions that a rational business case must still apply. Compare this to the discretionary spending available to, say, a family-owned company. In this situation a family business can make absolutely capricious decisions about the sort of community relationships it will support. But these in the end may have more to do with the family than the business.

Conclusion

In the guise of talking about 21^st century enterprise I have spoken instead about 20^th century enterprise and what lessons it holds for the way business should manage its social relations in the century to come. I suppose that the first point is that unless business does manage its social relationships, then some friendly or less friendly government will come in and do it instead. So, the threat of re-regulation is constant and urgent. This said, it doesn’t have to be the case that business leaves its major relationships to others. In a more de-regulated world, the importance of the social relationships and social positioning developed by business is even more critical.

In my view, a 21^st century enterprise will know these things and will have the capability to manage them. It won’t take the mistakes of the mining industry to demonstrate what has to be done. The signposts are already with us.