As a risk manager are you fully up to date with your company’s corporate social responsibility activities? If not, then current thinking suggests you should be.
Promoting CSR strategies in the context of effective risk management will be a priority for Airmic –(the association for insurance risk managers) in 2019 and it will be focused on three core strands – health & wellness; diversity & inclusion; and charity & community.
Airmic’s CEO John Ludlow says:
“Boardrooms increasingly recognize that a strong approach to corporate social responsibility is not just a good thing to do – it’s a business imperative. But not enough risk professionals recognise they have an important role to play in supporting their business achieve its CSR objectives.”
Airmic is urging risk managers to see these colleagues as ‘valuable allies’ in creating a resilient business. As Ludlow continues:
“CSR teams focus on ensuring that the issues society is most concerned about, particularly in relation to a company’s activities, do not become a barrier to achieving corporate objectives. This makes them part of the risk manager’s alliance: part of the three lines of defense.”
A business benefit
Certainly, CSR is increasingly viewed as a mainstream part of strategy, giving companies the opportunity to show they can do good, while encouraging customers to both trust and place more business with them. This includes many within financial services and as Larry Fink, the chairman of asset management group Blackrock, said:
“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show it makes a positive contribution to society.”
Meanwhile, Sarah Dickson head of philanthropy EMEA at global investments company BNY Mellon, says CSR work helps communicate company values effectively:
“Our CSR commitments are brought to life in many different ways. Recently, we have focused specifically on developing next-generation business and technology skills to help people thrive in a digital world. Employee volunteers help develop and re-skill future workforces through partnerships like our enduring relationship with the Salford Foundation.“Through our Board Service and Charity Trustee Recognition Program we enable employees to leverage their professional experience and contribute to the good governance of NGOs and charities too.”
Given there are growing shortages of finance professionals, CSR may also help with recruitment. It has been noted that millennials in particular look to work for ethical businesses and a strong and well-communicated CSR programme can do much to enhance a firm’s standing.
However, an involved CSR program also carries risks and setting up new arrangements can benefit from a risk professional’s oversight, for example:
- Ensuring there is sound financial management and transparency in any fundraising
- Providing guidance on whether any charity or community venture is the right fit for an
organization and making sure due diligence is carried out.
- Employees should be involved in any program such as through consultations and given
the increasing emphasis on whistleblowing, be able to report any concerns about a CSR
venture – Risk managers should also be aware of staff feedback.
CSR in a crisis
Financial services, being highly regulated, has little leeway if things go wrong. But, CSR
could provide a cushioning effect, suggests Ludlow. He believes where a business is mindful of society’s needs and wishes, building trust and credibility can help protect a brand in times of crisis:
“Public-spirited decisions fill the emotional bank accounts of stakeholders and build corporate reputations. When things go wrong, businesses draw down on these, so it is good business sense to keep them topped up. Failing to take corporate social responsibility seriously is a risk in itself. My challenge to risk managers is to do more to recognize CSR teams as a valuable ally in the drive to create sustainable resilience.”