What is Responsible Business?
BEFORE WE DEFINE WHAT WE MEAN BY RESPONSIBLE BUSINESS
WE’LL BEGIN BY EXPLAINING OUR BROADER APPROACH TO BUSINESS.
We are passionate about small business.
We are passionate about entrepreneurship and thriving, profitable SMEs. We are, of course, equally passionate about responsible business. These passions and ambitions for business are not disparate. Quite the reverse in fact.
We believe that:
DOING GOOD IS GOOD FOR BUSINESS
Whilst operating ethically and responsibly is clearly morally the right approach, there is also a very strong business case for doing so.
The current capitalist system isn’t working
We believe the current capitalist system that drives consumerism and a throwaway society no longer serves this country or, indeed, any other country, well.
But however that capitalist model may change, we will always need businesses and we remain passionate about small business success.
Even more importantly, small businesses can drive the changes that will shape new standards in our society.
Profit is good
There is nothing wrong with businesses making a profit and good salaries being paid appropriately.
In fact, every type of organisation needs to make a profit – even if it is called a surplus. Quite simply, however it is termed, an excess of income over expenditure is essential for any type of organisation to survive: that applies from the tiniest community group to businesses of all sizes and the public sector – right up to balancing the economy of the country.
Profit doesn’t need to be the main driving factor for every organisation but sadly the term ‘not-for-profit’ is used totally inappropriately.
We hope being an #ORBmember will help your company increase profitability.
What is crucial is how profits are made and how those profits are utilised: the avoidance of greed, which is so often evidenced in excessive, even obscene salaries; a lack of equity in the workforce; and huge dividends paid to shareholders. This is just not acceptable in today’s society.
So what does RESPONSIBLE BUSINESS mean?
Is it the same as CSR?
Business responsibility is often known as Corporate Social Responsibility (CSR) or Corporate Responsibility (CR). The ‘corporate’ is rather a misnomer as CSR is applicable to any size of business, even a sole trader.
We prefer the term responsible business as it is far more small business friendly, but in essence it is the same thing. That said, CSR has had a bad press for many years because of the way the term has been abused by many large companies.
Embedding core values
Historically, many corporates have used CSR as a tick box exercise by creating a CSR department and a budget for ‘CSR projects.’ Whilst projects that are going to make a difference are to be encouraged, genuine CSR is about core values that are at the very heart of a business.
If an organisation hasn’t embedded those core values in every single aspect of operating their business, those CSR projects are fundamentally being used for greenwashing purposes i.e. trying to make the company appear more ethical and responsible than it really is.
Even at initial business development stage, it is essential for entrepreneurs to consider the core values of their new business and include those in their Business Plan.
Whatever size of business, those core values should be shared and promoted both internally and externally. (Naturally, being a member of ORB is an excellent way of doing that!)
Throughout the world, CSR has many definitions with some describing it as a more philanthropic activity. That doesn’t resonate with ORB.
ORB’s definition of responsible business is:
A responsible business operates efficiently and responsibly; meets and exceeds legislation;and always considers its impact on people (the workforce, the community and society at large); and the environment.
We use the phrase People, Planet Profit as the strap line in our logo because it embodies this approach to running a business.
Similarly, this holistic process of pursuing positive results for people, planet and profit can be referred to as The Triple Bottom Line, also reflected in our logo.
More recent terminolgy refers to this approach in the context of SOCIAL VALUE. Indeed, most public sector and many larger private sector organisations now include an element of social value in procurement processes. Currently, the weighting of social value is rather inconsistent but there is every indication that social value will be embedded in a increasing number of contracts and the value given by the scoring process used will also increase.
We have broadly grouped responsible activities in to five key areas. These can be summarised as shown below:
If you have employees, responsible business starts here!
The workforce is invariably a business’s greatest asset and should be treated as such. You will reap the rewards!
The evidence is overwhelming that a trained, engaged and motivated workforce will result in less absenteeism, less presenteeism, reduced staff turnover and more productivity.
If you don’t have any employees, the same principles apply – look after yourself!
Evironmental legislation continues to increase and there are few businesses that are not required to adhere to specific rules and regulations. And yet it is still estimated that business could make £6.4bn per annum in savings on costs such as paper, waste disposal, water, heating and transport.
How much could your business save?
Although there is without doubt a business case for reducing environmental impacts, the climate crisis and devasting environmental impacts of plastic and other waste streams is surely a far bigger reason to ensure you are embracing environmental changes in your business.
Most individuals are increasingly concerned about their personal environmental impacts and it makes total sense to take those concerns into the workplace. According to the size of your business, you may even find employees who would happily take on the role of ‘Environmental Champions’ to help ensure best practice is understood and embedded throughout the company.
Considering the needs of the local community and getting involved in a way that suits your business can have numerous benefits – and can be fun too!
Community engagement can boost your reputation and is an excellent way of engaging and motivating employees.
When possible, sourcing supplies and recruiting locally will also help support the local economy.
An important aspect of community engagement is considering how, if possible, you can support young people. This could be through a mentoring scheme, offering work experience or apprenticeships.
How well do you look after your suppliers, distributors and customers?
What improvement could you make to improve your businesses efficiency and reputation?
How do you ensure the goods and services you provide delight your customers?
Do you build good relationships with your suppliers?
And do you know anything about the supply chain involved in the goods you purchase? For example, could they have been made by child labour?
Values and Transparency
Do you operate in an open, honest and transparent way with employees, customers, suppliers, distributors and other stakeholders?
Do you bring your personal ethics in to your business?
Greed and lack of transparency has brought the economy to its knees. A new value culture is now imperative for business success.
We encourage companies to Nail Your Colours to the Mast: “to defiantly display one’s opinions and beliefs and show your intention to hold on to those beliefs until the end.”
In other words, not just to do the right things but also openly convey that message.
Whatever stage your business is currently at, if you seriously want to become a better and more responsible business you can start straight away.
We recommend small steps. We do not necessarily expect our members to make dramatic changes overnight but to continually push the boundaries that will both improve their business and increase their positive contribution to society.