Corporate Social Responsibility and Compliance: Obstacles to Effective Integration

This is the third in a series of posts reflecting excerpts from a chapter that I authored on corporate social responsibility (“CSR”) for the Corporate Legal Compliance Handbook

For some companies, integrating CSR commitments into the company’s overall compliance program may represent a significant shift. Corporate managers may view CSR as a set of programmatic commitments that are removed from the core business strategies of the company and there may be internal reluctance to integrate the relevant commitments into the company’s compliance systems. Compliance personnel may see CSR as outside the scope of their responsibilities and may be averse to cross-functional dialogues regarding the development of integrated compliance approaches.

In addition, CSR and compliance, while serving similar functions, also require different skill sets. A significant component of a strategic approach to CSR is an internal capacity to engage with and listen to stakeholder concerns. Companies need to develop a nuanced understanding of stakeholders’ expectations of the company: this requires proactive engagement and seeking out new perspectives, both internally and externally. Compliance personnel may lack comfort with this form of engagement and may not be familiar with the context in which stakeholder expectations have been formed. Effective integration of CSR and compliance, therefore, will require identifying how best to leverage and coordinate the functions and skills of different personnel within the company.

Finally, there may be considerable fears about the potential costs associated with a more comprehensive approach to compliance with both mandatory and voluntary standards. Despite the costs of failing to implement CSR commitments effectively, as well as the potential benefits of a more effective allocation of corporate compliance resources, management may be reluctant to dedicate the time and personnel resources necessary to foster the internal dialogues necessary to identify strategic opportunities for integration.

Excerpt reproduced with the permission of Wolters Kluwer from Theodore Banks & Frederick Banks (eds.), “Corporate Social Responsibility,” Corporate Legal Compliance Handbook, Chapter 15 (2016).  A copy of the full handbook can be purchased here.

 

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