Corporate Citizenship and the Role of Government

A new report aimed at Federal politicians argues that existing public policy on corporate citizenship is minimal, but advocates against a program of legislative intervention in favour of a more supportive role of ‘non-regulatory activism’.

The report called Corporate Citizenship and the Role of Government: the Public Policy Case was written by independent researcher Dr. Gianni Zappala.

The report describes corporate citizenship or corporate social responsibility (CSR) as understanding and managing a company’s influence on society and all its stakeholders. Put simply it can be defined as being about ‘business taking greater account of its social, environmental and financial footprints’.

Dr. Zappala says that developing an appropriate role for government in corporate citizenship is not an easy task, in part because the definitions and conceptions of corporate citizenship are fuzzy, varied and constantly evolving.

Nevertheless, he says just as companies should understand the business case for corporate citizenship, governments should understand the public policy case for corporate citizenship.

Dr. Zappala says the policy options available to government cover four broad areas: do nothing, use regulation and legislation, engage in non-regulatory activism or demonstrate best practice.

The report says that in Australia, apart from some ad hoc legislative and non-regulatory activities, public policy in the area of corporate citizenship is minimal despite the fact that several other countries and companies have recognised the micro and macro benefits of corporate citizenship.

Dr. Zappala argues in favour of ‘non-regulatory activism’, which takes the view that while corporate citizenship should remain a primarily voluntary activity, government has an important role in providing for its support and development.

He says the closest initiative within this policy route in Australia has been the establishment in 1999 of the Prime Minister’s Community Business Partnership (PMCBP), an advisory group of prominent business and community representatives appointed by the Prime Minister.

However he points out that while the work of the Prime Minister’s Community Business Partnership should be applauded, it lacks the resources, authority and profile to lift the understanding of corporate citizenship in Australia above its more narrow focus on corporate philanthropy.

For instance, it recently called for submissions on new and innovative ways to encourage philanthropy in Australia. Outside of a broader framework of corporate citizenship that has strong political leadership, the impact of such exercises is likely to be limited.

Th report suggests that governments can do much more via supportive, coordinated policies and showing strong political leadership on the issue.

Several policy recommendations include:

• appointing a Minister for Corporate Citizenship. The minister’s key roles would be to promote corporate citizenship, provide political leadership on relevant key issues, ensure a whole of government approach is taken to corporate citizenship as well as coordinating corporate citizenship activities across all government agencies at Federal and State levels

• the minister’s portfolio could be supported by creating a new ‘corporate citizenship unit’ within a department such as the Department of Industry, Tourism and Resources. This would link the internal and external focus of the unit more closely to issues of industry and competitiveness. The existing PMCBP could be moved from its present location within the Department of Family and Community Services to this Department and provide the initial resources and point of departure for a strengthened and renewed ‘Corporate Citizenship unit’

• another key role of the unit would be to commission research into all aspects of corporate citizenship, including undertaking a major national survey of corporate citizenship practices and attitudes among companies in Australia. This survey would be similar in scope and function to the previously commissioned Australian Workplace Industrial Relations Surveys (AWIRS) and provide an evidence base from which corporate citizenship policies could be developed in future

• the unit’s work should also include a focus on corporate citizenship developments in the Asian region and their implications for Australian business

• together with other relevant agencies the unit could review and suggest revisions to existing legislation on corporate behaviour and compliance to ensure it encompasses best practice developments and thinking on corporate citizenship.

Dr. Zappala concludes that policy inactivity may well create increased pressure for legislation from the electorate that may inadvertently hinder the longer-term development of genuine corporate citizenship.

He says while there is a role for legislation, it is suggested that governments can do much more via supportive, coordinated and enabling policies and showing strong political leadership on the issue.

The report was commissioned by the Federal Parliamentary Library as a resource to, principally, sitting members and was delivered just prior to Mark Latham become Federal Opposition Leader.

Dr. Zappala says given the leadership change and recent statements by Latham regarding citizenship and community there may be renewed pressure to put policy planning around corporate citizenship back on the public agenda.

Dr Gianni Zappala is Director of Orfeus Research, a consultancy specialising in working with organisations to develop responsible citizenship strategies through research, evaluation and training
(www.orfeusresearch.com.au). He has degrees in Economics, Industrial Relations and Political Science from the Universities of Sydney, London and Cambridge.

Prior to establishing Orfeus Research in January 2003, he was the Research Manager at The Smith Family for three years and has also held various teaching and research positions at the Universities of Sydney, Cambridge (Fellow of Emmanuel College), Wollongong, the Australian National University, and Parliament House, Canberra.

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