Corporate Social Responsibility (CSR) has taken many companies in Nigeria by surprise.
Now CSR activities have to be measurable with definite budgets. This has increased the scope for meaningful intervention by corporate Nigeria towards combating many problem areas and contributing towards inclusive growth.
One area of involvement could be towards creating employment opportunities through enterprise formation, particularly for women.
Support could be extended as part of CSR to women belonging to unemployment sector; and also to those individuals desiring to enter in to enterprise activities. The support could involve financial, training and marketing components. Enterprises could also be formed under the co-operative model with corporate hand holding during initial stages.
Checks by Daily Times reveal that most of what companies in Nigeria do and tag as CSR do not stand to benefit the woman who has been classified in Africa as the most neglected species.
For example, in developing countries like India, CSR gained popularity only in the new millennium, though business houses, particularly those like TATA ,had an early orientation towards service to society.
In the words of Jamsetji Tata, the founder of the Tata group, he said, “In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence”.
Approximately two- third of the equity of the parent firm, Tata Sons Ltd, is held by philanthropic trusts through which it utilises on an average about 8 to 14 per cent of its net profit every year for various social causes, which even at the beginning of the new millennium, had amounted to1.36 billion rupees.
In Nigeria, there is a wide gap between sections of people in terms of income as well as socio-economic status, an ideal CSR should contain both ethical and philosophical dimensions analysts believe.
As a matter of fact, a number of larger companies have spent millions of naira on various social causes and betterment of community in which they are conducting their businesses.
They have and continued to work towards improving health, education, basic amenities, condition of women and children and so on.
But experts posited that, with a good legislation, these activities would have to be streamlined and carried out in a regular and more systematic manner with definite budgets.
Reacting on this issue, a Senior Advocate of Nigeria(SAN) and the founding Partner of the law firm of Kenna Partners. Professor Fabian Ajogwu, said; “there was a proposal at the National Assembly to pass the corporate social responsibility bill.
“On the surface of it, it looks like it was going to promote the corporate social responsibility. But then, when you read further, it says that you will need a takeoff grant of about N1bn, it would have a DG, directors and so on. It was going to surcharge two per cent of every company’s profit to pay to this commission.
“We know that there is nowhere in the world where you make corporate social responsibility a mandatory thing. It is a desirable thing, but you don’t legislate on it. Once that is done, it is a taxation, by whatever name you call it. So, we went and made submissions to the National Assembly and said these are best practices across the world, we cannot be different.”
According to him, “in any case, the primary responsibility of the welfare of the people of Nigeria is vested on the government. Companies may be kind, nice and sponsor things; we cannot outsource our welfare to those companies.
“These are a kind of quite advocacy which we do. If we don’t raise it and the laws are made, they bind everyone. We also do the training of preparing people to become directors. People assume that you only prepare to enter university through Joint Admissions and Matriculation Board, prepare to go to post graduate, prepare orientation to become staff, they don’t feel that you now need to prepare yourself to assume directorship responsibilities.
” Very often, we have seen that uniquely, being a director is highest level of responsibility. But most don’t even know that that responsibility is coupled with a burden of leadership.
” If you fail, it is not just that you failed, you could end up in jail. Most times, you see that when companies go down, the real people that are taken are the directors”.
He said, “Rarely do you go looking for shareholders. So, we try to educate in board programme that has been specially designed by the society in collaboration with key institutions that still work closely with it such as the International Finance Corporation and World Bank. They have run programmes in association with the society to enhance the boards of financial institutions.
“You will see that the third wave which we had in 2009, where we had Intercontinental Bank, Oceanic Bank challenges, some of those challenges have to do with the quality and strength of the board.
” The society also collaborated with Lagos business school, the NDIC, the Nigeria Stock Exchange to train the directors of their dealing companies; and they were about 400 companies. In the last five years, the society has worked strongly with almost all the key regulators. It has supported the NCC in helping to issue its code of corporate governance.”
He stated that; “once we had a look at the market capitalization of 12 blue chip companies that included Nestle, Unilever, John Holt, Nigerian Breweries; and we found out that the total market capitalization of those companies was less than the market capitalization of MTN alone.
“Yet MTN, is a private company. It is not listed in the stock exchange, the code of corporate governance of the SEC is not applicable to it. NCC in its wisdom , decided that they have succeeded in launching out the industry.
“The next phase, also as important as network quality, is the behavior of those who are in charge of these industries. There is a phrase used in the corporate world for companies which had grown so big over the years, which is ‘too big to fail’.
” A company can grow to a point where its failure will lead to the failure of so many other people in the society. You cannot imaging where telecommunication company would collapse, it will drag down all the subscribers, network access and people would be laid off”.
According to him, “that company should regard itself as too big to fail. So it becomes important that the behavior of governance of the entities are adhered to. We should not be a nation that reacts only, we should be preventive.
“Much of these collaborations efforts is geared towards one thing – sending the message of corporate governance, behavioral governance, risk management across to those sectors. And what is the impact? The impact lies on the number of board members that have gone for the programme, which I will put at between 1000 and 1500; senior managements that have gone through this programme and the number of bills that have been properly conceived or amended because of our interventions.
” A whole of Nigerians only know about the law when it has become law. They don’t get involved when it is at the making process, where suggestions can be made to affect change.
” The society has tried to keep faith with its mission, which is to be the leading role player in the development and promotion of corporate governance within the Federal Republic of Nigeria. It has external partnership, but the emphasis today is to get it right at home.
‘The next phase of launch of the activities of the society now is the SOE’s, the State Owned Enterprises. They function like companies and it is important that they have corporate governance code.”
While speaking on Creation of Self-Employment Opportunities, a member of civil liberty organization (CLO), Comrade Philomena Aaron said; “business organisations can provide the necessary guidance towards the setting up of micro-enterprises by groups of women belonging to unemployed sector of the population, as well as individual women who want to operate an enterprise as a sole proprietor.
“Studies have shown that improper selection of the enterprise activity as well as the inability to market the product or service affects the viability and continuity of the enterprise over time.
” This is one area where the expertise and involvement of a corporate could make a difference. The suitability and viability of the project could be evaluated by the corporate and necessary direction and hand holding provided throughout the developmental stages of the enterprise.”
According to her, “some enterprise activities like the setting up of a food processing plant or a dairy would require bigger investments, due to larger scale of operations.
“The size of the business may then range from small to medium scale. In these cases, the corporate can also enter in to partnership with a large group of women to operate the enterprise jointly and could follow a social enterprise model.
“The ownership could either be a co-operative model where many stakeholders are involved and The corporate could subsidise the initial investment either through an endowment or a soft loan’.
He said the enterprise could be developed as a joint partnership, with the corporate having joint ownership (holding a maximum of forty-nine percent) along with the unemployed women seeking for empowerment.
“In this form of enterprise building, which could be the case in the case of a dairy, food processing /coir processing or any other small/medium scale unit, the women members are directly involved in the production and therefore would also be wage earners can take up enterprise activities that have either a ready local market or those that have demand in accessible urban areas”.
He said, “According to the suitability of the area or region, specific clusters could be devised, where large number of unemployed women can join together and engage in activities like dairy, poultry, fruit and vegetable processing and so on.
“Here, involvement of the corporate may be a necessary condition right from the incubation and planning stages.”