Social responsibility and strategic goals are not mutually exclusive. The more enlightened directors sitting on the boards of corporates understand that there is a moral imperative to engage with local communities, plus other stakeholders, before embarking on projects which have the potential to disrupt lives. It’s a pity that far too many businesses around the world continue to struggle with this basic concept.
For some, it’s a classic case of prioritising profits above everything else; for others it’s a lack of awareness about how to plan and then communicate appropriately. Anne Stevens, Vice President for People and Organisation at Rio Tinto Copper, says: “Before you’ve even applied for permits or licences of any kind, you need to engage the full range of affected parties at the earliest opportunity.
“That means consulting with the local community, local and national government, NGOs and all of the other key stakeholders... Where there is lack of early engagement and less of what I would call ‘a collaborative approach’, there is an increased risk of local resistance and we have even seen examples of community outrage within the mining industry.”
Sandy Stash, Group Vice President of Safety, Sustainability and External Affairs at Tullow Oil, comments: “A common error is assuming that government speaks for all the stakeholders. Clearly, you need to do your homework and look at every dimension of how you can engage with everyone, including government, as early as possible. This needs to start with the planning process – you can’t wait until implementation.”
A company shouldn’t be too prescriptive in its approach if it wants to know what makes a local community tick, especially when operating in different countries. Anne says: “A common mistake made by leaders is to go in with their own mindset and... apply the same recipe or approach that was successful before in a different [place], without really engaging and understanding the requirements of the local environment.”
If trust is to be gained – or at least a workable compromise found – then leaders within the business need to be on the ground and talking to the relevant parties. Luke Wilde, founder and CEO at business consultancy twentyfifty, says: “Communities need time to get to know the company and face to face communication is going to be critical in that.
“It's unlikely that any CEO is going to be able to give that sort of time, [so it would be] better for a senior local manager to give the company a 'human face', to demonstrate the time and willingness to listen and to be available for the community to raise concerns with at any time.”
Sandy comments: “The CEO needs to foster a culture where people are interested in and engage with the communities where the organisation has an impact, but the local business managers need to take responsibility and be the sponsors for making community engagement work.”
Without that interaction, tensions can quickly bubble to the surface. Kevin Craven, CEO of the Services division at infrastructure provider Balfour Beatty, says: “We have found, to our cost, that if our local management is not really attuned to the local community’s needs, then you do get problems.
“For instance, although I’ve done about eight street lighting PFIs [private finance initiatives], there was one location... where we hit a road bump because the local community was very particular [about the aesthetics of the lighting]... so we decided to put somebody in as a dedicated community officer and arranged town hall meetings with residents.”
Business leaders shouldn’t underestimate the importance of delivering on promises that were made in order to receive the green light for a project. Bob Davies, a portfolio NED and former CEO of Renold and GE Druck, both manufacturers, comments: “Mistakes are often made where expectations are set incorrectly. There are so many different conversations with different entities—local governments, local unions, local newspapers—that a false image can be created of what you’re actually trying to do, so it’s vital that the CEO ensures absolute clarity of what is planned.
“This might not be a big issue on day one but two years down the line, when the local government was expecting you to employ 400 people and your plan was always 40, can be where the angst starts to give rise.”
Community engagement forms one part of what’s required to be a socially responsible organisation as it feeds into employment law, health and safety, corporate governance, supply chains and the environment. While few get it completely right, the intense spotlight on companies means none can afford to pay lip service to the notion of behaving in a way which shows respect to others.
I hope to see you soon.