CSR Guidelines for the Financial Sector - page 6

More information about Lafarge's experience, can be found online at:
Roleand Importance of CSR inBanks
In emerging and developingmarkets, the financial sector plays a key role in creating and advancingmarket
practices through the deliverance of their services in general. This creates a dual fold valuewhereby the financial
sector can influence corporate practices through its own practices and requirements, creating substantial market
CSR is specifically of great importance to theMENA region for its highly desired effects in facilitating long-term
development, making good business sense, empowering the private sector to take part in regional development,
helping to achieve political stability, and gaining stakeholder loyalty, trust and support.
The project will significantly impact the development of theMENA region’s financial sector, in addition to help in
ensuring that a safe, sound, and functioning banking industry is in place.
CSR helps.
First, amajor stakeholder of an organization is its employees. CSR does not imply that downsizing should be
prevented, but suggests that companiesmust make an effort to organize layoffs in a socially responsiblemanner.
This could include early warning, counseling, re-training, temporary financial assistance etc. As an example of good
practice, Lafarge (Jordan) created the EmployeeConversion Program to ensure a sustainable and responsible
turnover process.
The tendency of companies to give immediate notice is both distressing and can be
counterproductive once re-hiring starts again. There is no doubt that there is an unequal power between companies
and employees. A company can recover; a redundant employee is not the same.
Second, CSR urges transparency of operations through socially responsible reporting of activities such as informing
shareholders and staff about off-balance sheet holding of debts. Enron, for instance, may well have been inmuch
better shape today if it had behaved in a socially responsiblemanner. Even though Enronwas a lavish donor, Simon
Caulkin of TheObserver (Feb 3rd, 2002) regarded this philanthropic form of CSR as a ‘figleaf’ and ‘of a piecewith
Enron’s overall strategy’. In fact, CSR is an overall strategy for systematicmanagement of all of a company’s
stakeholders and is not confined to philanthropy.
CSR FAB or Reality?
Is CSR a new flavor of month?
IsMilton Friedman right? “There is only and only social responsibility of business to use
its resources and engage in activities designed to increase profits.”
Is the dilemma: “whenmoney andmorality clash, what should a company do? “A real
Is Professor Arlich Steger from IMD right?Companies should aim for “responsible
shareholders ‘long term interests, but with that constraint, they shouldmeet whatever
social or environmental goals the public expects of them.
Is the business of business?Companies should focus onmaking profits while
government should regulate companies to be responsive to social and environmental
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