Some companies, especially larger ones, create nominally independent trusts or foundations to manage their CSI. Some outsource the management of these trusts, while other trusts manage themselves. Most companies, though, carry their CSI work internally, sometimes as a stand-alone department and often as a function within marketing, human resources or corporate citizenship.
It is when CSI is such a line function that its positioning within the company’s power dynamics becomes important to its chances of achieving good community development results. That’s partly because CSI, by definition, is not an income generating activity and thus can tempt colleagues to direct its budget to fashionable causes or short-term community needs, often decided by staff whim.
Yet development work is at the heart of good CSI, and this is most often a thing of the long-term and of nuance.
It matters then, that a company’s CSI function or department is understood within the company as operating under set rules and consistently clear processes and with easily understood internal reporting lines that carry the approval of the company’s executives. Company size and CSI budget will obviously determine whether or not the company’s personnel responsible for CSI carry managerial seniority.
Where they do, they will be more easily able to explain and defend CSI’s proper developmental role in society. Where they don’t, they would do well to find executives who will take an active interest in doing this on their behalf.
Just as CSI is no longer reported on to stakeholders separately from other company activities, so it is also true that CSI can hardly be kept away from other company work, and nor should it be. Good CSI developmental strategies take cognisance of overall brand strategy and feel, and dovetails with the company’s broader public persona wherever appropriate.
Still, it is a deft-of-foot CSI manager who is happily able to combine his function’s broader developmental work in society with the often more immediate wants of colleagues who are necessarily focused on the short-term bottom line. It is a task made immeasurably simpler by executive endorsement, strong internal communication of the ‘why’ of this work, and the protection of transparent and accountable CSI mandates and processes.
For some companies, CSI is carried out through nominally independent company-associated trusts or foundations. These have their own Boards of Trustees and they are typically governed by public benefit law relating to the SA Revenue Service and/or the Companies Act of 2008 as it affects non-profit companies.
Other companies manage their CSI as a line-function within the company, and governance and reporting requirements are set by the company itself. The latter also applies where companies devolve CSI functions to individuals who may have other jobs within their portfolio of work.
Governance and reporting of CSI are thus dependent on how CSI functions within the overall structure of a company.
Whether this takes the form of a trust with a board, a foundation or an in-house department will determine the level, frequency and format of reporting.
In most scenarios, annual CSI reporting is included in an integrated or sustainability report, in conjunction with the financial and other department reports. The advantage of this is the recognised and inclusive nature of having CSI form part of the overall presentation of the company to the public. Within these publications, it is often required for a full financial report on the CSI activities and department to be included, as well as guiding principles, objectives, beneficiaries and supporting case studies.
Depending, once again, on the structure and nature of the company and the reporting that is required, internal reporting may benefit from a more frequent interaction with either a social or ethics committee, or management/the board itself. This offers a degree of transparency and continued alignment to the values and course of the company. It also allows CSI to potentially take a considered role in any decision-making that has an effect on CSI practice and its community impact.
From a practical perspective, keeping abreast of CSI reports and governance on an ongoing basis allows for ready access to this information as and when needed, rather than for a scramble for information at the last minute, which may put CSI practitioners, as well as beneficiaries, under pressure.
Regular, detailed and easily-understood reporting should be part of any funding agreement between a company and the receiver of CSI support and is an opportunity to present the good work that a company does to both internal decision-makers and to outside stakeholders to greatest effect.
- Paul Pereira, WHAM! Media. This article is extracted from Nation Builder’s “The Good Partner Guide for Business”, available at https://proudnationbuilder.co.za/resources/.