True social investing requires corporates to exercise patience
An interesting billboard is strategically placed at one of the terminal walkways that lead to the doors of the jumbo jets at OR Tambo International Airport. It reads: “It doesn’t take two hours and 30 minutes to perform Swan Lake — it takes 20 years.”
The billboard was put up by Allan Gray, one of SA’s top asset managers, whose philosophy is premised on patience: it requires time and effort to achieve a good return on investment.
So, if corporate SA widely understands this analogy, why do companies expect quick returns from their corporate social investment (CSI) programmes? After all, unlike financial instruments such as equities and bonds, investing in social development has an intrinsic “human developmental” element that requires the management of change. This takes time and effort.
Many reasons for this thinking come to mind. This piece outlines at least three schools of thought that exist under the CSI theme.
The first, internalisation, relates to CSI being part of a broader corporate social responsibility agenda. Practitioners and corporates belonging to this school of thought are concerned about being “responsible” corporates that look after the communities and environments they come into contact with.
Although they contribute to CSI, they are more concerned about corporate social responsibility, which is linked to the sustainability of their operations.
For example, mining companies have social labour plans that are linked to licensing requirements regulated by the Mineral and Petroleum Resources Development Act.
Most corporates following this school of thought have programmes that have an intrinsic link to the company’s survival, and there is thus companywide buy-in. Essentially corporate social responsibility is the main driver of CSI decisions.
The second school of thought sees CSI as an important part of business but it is considered fundamentally “external” and just about giving. Such practitioners understand CSI to be philanthropic in nature.
Practitioners belonging to this school of thought are concerned about SA’s social ills, such as poverty, unemployment, inequality and shortfalls in education and health, to name but a few, and do want to be involved in fostering change.
They generally have a CSI strategy but implementation is very programmatic — that is, spending is fragmented and generally targets small projects that can have an immediate effect.
Arguably, most CSI practitioners belong to this school. CSI is external because it is done mostly for the sake of compliance — particularly to earn broad-based black economic empowerment points.
Then there is a school of thought that has brought the winds of change to the CSI landscape and has become a pioneer of systematic change through CSI.
Aware that 1% of net profit after tax is not nearly enough money to tackle all the country’s social ills, practitioners in this category focus on collaboration and building partnerships with like-minded organisations to create bigger systems to drive change, as opposed to investing in small projects.
The “systemic change” school of thought is not interested in brand or company level recognition, nor is it emotionally attached
INVESTING IN SOCIAL DEVELOPMENT HAS AN INTRINSIC ‘HUMAN DEVELOPMENTAL’ ELEMENT
to philanthropy. It recognises that small projects are important, but that they are not sustainable without a systemic change outlook. It realises that more substantial investments may be required over a longer period, and change will not happen overnight. As the Allan Gray billboard sought to inculcate, change requires time and effort.
The fundamental difference between these schools of thought is patience. An inability to resist the demands of a fast-paced society that is eager for quick returns makes corporates forget that Swan Lake requires 20 years of dedication, focus and commitment. That is why systemic effects in education, health and other key sectors eludes us, despite the substantial investment corporates have made in development.
The days of company founders or executives giving a cheque here and there are fast approaching extinction. SA’s societal challenges will not be solved without collaboration. Successful collaboration requires company founders, their executives and CSI practitioners to shift their thinking from quick-win projects to long-term systemic interventions. That is how we will achieve sustainable change.