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Corporate responsibility - best left to the big boys?

Apart from being a nice thing to do, why should an SME bother about corporate responsibility? Let's be honest, small businesses are cost-conscious and don't have spare resources to squander on pointless exercises. For small businesses, corporate responsibility can seem a luxury a long way down the priority list. More than that, it can be viewed as a somewhat fluffy peripheral issue that larger companies are guilt-tripped into paying lip service to, but which smaller organisations can thankfully avoid!

I believe that businesses who buy into that view are missing a trick however, so in effort to convince you, here are three good reasons for developing and implementing an effective policy on corporate responsibility:

  1. Corporate responsibility can save you moneyCorporate responsibility can save you money
    Far from adding to a company's expenses, implementing an effective approach to corporate responsibility can achieve cost savings by improving the management of resources and reducing waste. Simple steps can be effective:
  • how much paper would you save if you switched to double-sided printing as standard?
  • how much energy would you save if you made sure lights were switched off when not needed and set computers to automatically go to 'sleep' mode when not in use?
  • how much could your business travel costs be reduced if journeys were better planned and alternative modes of transport, car-sharing or more efficient vehicles were used?

Remember 'what gets measured, gets managed'. Until you start measuring usage of various resources, how do you know how much you could save with a little extra thought?

  1. Corporate responsibility can increase your profitability
    Corporate responsibility is not all about savings, it is about every aspect of your business – what you do and how you do it. Treating others well – your customers, suppliers, employees and the wider community – engenders loyalty which can pay enormous dividends for a business. Whether that makes you more a valuable customer to your own suppliers who appreciate that you always pay on time and will therefore be more willing to go that extra mile for you when you need them to, or means your staff feel proud and motivated to work for such a fair employer, the benefits of treating others as you would like to be treated yourself can be enormous. And in the same way that some consumers will seek out organic or fair trade products, some potential customers will also only want to buy from an organisation which has a reputation as being fair and ethical. Imagine how fast you'd grow if each of your clients recommended you to other new customers! And, as big businesses become more conscious of the need to check out their supply chain, companies that can provide rock-solid credentials on issues such as employment practices and prevention of bribery and corruption are far more likely to attract lucrative contracts from larger customers.
  1. Corporate responsibility enhances your credibility
    SMEs that take an active stance on ethical and social issues and communicate their position effectively, will not only tick the right boxes in terms of providing assurances to others that they are a reputable organisation, they may also give customers, suppliers and competitors the impression that they are a larger and more mature businesses than they might actually be. After all if you've got sufficient resources to develop and make public your position on issues such as the environment, ethics and community, then surely you must be a big player! Simply publishing a corporate responsibility statement, can lend your business credibility and make it more attractive to other responsible businesses too, thereby helping you to attract quality customers.

So now you’re convinced, what next?
The business case for corporate responsibility is becoming increasingly compelling but, to really stand out from the crowd, it’s not enough to take a piecemeal approach, with say one part of the business adopting virtuous practices while elsewhere the organisation rides roughshod over the environment, its employees, suppliers or customers.  To achieve a cohesive approach across the company, leadership and direction from the top is crucial.  Directors or, as is often the case for an SME, its owner/managers, must take an active lead and place corporate responsibility at the heart of their decision-making if they wish to achieve a ’corporate personality’ reflective of their stance on ethical, social and environmental issues. 

Boards are now recognising the importance of corporate culture more and more and this is where SMEs often hold a huge advantage over their larger competitors. When it comes to implementing a positive corporate culture, their smaller size and more nimble decision-making processes give SMEs the upper hand in implementing change across their entire organisation. SMEs tend not to have embroiled themselves in bureaucratic systems and hierarchical processes which often present barriers to change for larger businesses and they are less likely to have tied themselves into long-term arrangements from which they cannot easily extract themselves. Moreover with smaller teams, getting buy-in to a single vision is infinitely more achievable for SMEs than it is for multinationals with staff perhaps dispersed over many locations in several countries with different cultures, values and priorities. The achievement of truly embedded responsible policies can be the sort of reality for SMEs which many large businesses can only dream of.

So, far from being a pain in the corporate backside, corporate responsibility offers real opportunities for creative SMEs to add credibility to their business and to achieve a competitive advantage through the adoption of organisation-wide responsible practices. Such developments will not happen by accident however. Perhaps it's time for your directors to take the lead!

ChadwickAbout the author
Bernadette Barber has more than 20 years' experience of advising private, public and third sector organisations and their boards on company law and corporate governance. A recognised expert in her field, she is author of the publication ICSA's Corporate Governance Handbook and director of specialist company secretarial and corporate governance consultancy, Chadwick Corporate Consulting. Bernadette is committed to adapting corporate governance best practice, traditionally reserved for FTSE100 companies, to make it relevant and proportionate to smaller organisations.
Bernadette can be contacted by email: Bernadette@chadwickcc.com or phone: 01702 668381.


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