International Concerns for Charities: Due Diligence and Reputation Risk13 November 2014 by Dr. L S Spedding
Introductory Remarks
Charities operating internationally often work with partners in other countries. In this instance the term partner can vary from a formal agreement along the lines referred to below to more informal arrangements. In any event both due diligence and reputation risk management are vital and an understanding of shared values and commitments extremely important form the outset. In this article it is intended to consider aspects of due diligence and reputation risks mainly from the perspective of a UK based Charity considering overseas collaboration and projects. A phased practical approach has been recommended by the Charity Commission in the UK as follows:
1. Research.
networking with similar organisations home and abroad
fact-finding missions
talking to local groups overseas about needs and possible projects
talking to experts at home about practical aspects of possible projects
2. Implementation
deciding to operate in a particular country
selecting one project from shortlist
visiting the selected project to:
3. Long term aims
drawing up long term aims/mission statement (i.e. to relieve poverty by setting up income generating projects and by the provision of training facilities);
establishing future contacts with other organisations with similar aims;
drawing up procedures for selection of projects and beneficiaries with the following features:
Combining resources can be a cost-effective and efficient way to achieve a charity’s purpose. It is well known that much international work is based on collaboration, for instance, between a UK charity and a local partner in another country. There are key practical issues that relate to the choice of partner or relationship that will enable the charity to operate effectively wherever it forms relationships. Therefore when making a decision to carry out activities overseas the charity – particularly the Trustees – must be abreast of the legal requirements not only in the UK but also in the jurisdiction of choice. Thorough understanding of the overseas location is vital and it is submitted that travel to that jurisdiction is very important to enable a form of due diligence that can cut through much of the paper based due diligence or reliance on local inputs through technological or other methods. Before entering into any form of collaboration it is prudent to carry out a preliminary simple due diligence exercise to ensure that are aware of who they are dealing with and that any arrangements are reciprocal, balanced and clear as far as possible. Selected headings for this exercise are:
It is very useful to gather as much information as possible in advance and to check the accuracy of the information by some form of cross or spot check with, for example, stated beneficiaries. When considering the collaboration strategy, any reputation risks must also be taken seriously so that the collaboration is really effective and in the interests of all parties. Even after the preliminary steps have been taken there should be an ongoing evaluation of such issues. Simple headings or issues to regularly review in checklists that are relevant in any collaboration are:
Relationships are a human experience that should be prioritised and cherished. Respect for the local partners or those organisations – including their decision makers – that the charity is in collaboration with is a key point that can often be overlooked. In this article a short overview is given to raise awareness of some issues that may be relevant whether in the context of working with a local non profit organisation or with a profit organisation as part of their corporate responsibility. It is considered that in view of the global nature of many activities – especially given the impact of rapid technological advance and recent regulatory trends – that integrity, trust and transparency are crucial ingredients throughout the life of any international project or relationship.
Reputation Risk Management
Reputation risk management has become an increasingly recognised and important area of risk management in most jurisdictions, particularly over the last two decades, mainly because:
Good practice tips on staff engagement reputation risk management are:
Procedures for Ongoing Reporting
It should be noted that the due diligence referred to here not only has regard to the setting up of the relationship but also the ongoing needs and requirements to enable a project to realise its potential. Of course these can vary to suit the nature of the relationship and partnership arrangements. The project or activity that is under consideration by way of a form of partnership should work towards achieving the aims of both parties.
In most jurisdictions Charity trustees have overall responsibility for how the charity’s funds are spent. However, they may delegate administrative duties connected with the day-to-day running of projects to local representatives. Trustees need to receive timely and accurate reports from local representatives. This will give them the information they need to make decisions. It will also help them to demonstrate that they are fulfilling their duties. The most important consideration is what projects will best fulfil the charitable purposes and provide maximum benefit to beneficiaries.
A basic due diligence that is recognised in most jurisdictions should cover:
local culture and traditions
the political situation
advice, information and views from local groups
As part of the checks (and in accordance with published guidance by the UK Charitable Commission) it is advisable to:
speak to others with the same interests to identify potential partners
take up references wherever practical
assess the viability of the potential partner
get to know the type of people and organisation you are dealing with and the way in which they operate before entering into a written agreement
require all potential partners to provide costed budgets and forward plans
identify clearly what results you are working towards and how to know when they have been achieved
establish local audit procedures, bearing in mind what is practical and possible
check local regulations on partnerships between local and foreign organisations
Many countries have specific laws and regulations relating to partnerships between domestic and foreign charities or non profit organisations and to the employment of local staff in foreign organisations. As noted the staff – and volunteers – can be natural ambassadors positively for the Charity and their treatment is a matter of concern. It may be useful, for instance, to recommend that the charity:
arranges for basic security training for all staff and volunteers employed to work in an unstable or challenging environment – this is usually available from a number of training suppliers or organisations
has a security policy in place. Staff and volunteers should receive a written assessment of security and health risks, emergency evacuation procedures
and insurance arrangements.
Arrangements with Potential Partners
Any collaboration arrangements or forms of association, coordination or cooperation should seek to enable charities to:
As the UK Charity Commission has also indicated in respect of overseas activities, local rules should be checked before entering any arrangements to ensure that:
the activities they intend to carry out through their local partners are in furtherance of their charity’s purposes
their partners are – and continue to be – appropriate for the charity to work with the trustees have taken reasonable steps to monitor the use of funds to make sure that:
a) their partners can and will apply funds for proper charitable purposes
b) relevant funds reach their partners and end beneficiaries
When a partner is selected, a formal agreement with all parties setting out what is expected of each is useful. Many recent regulatory changes internationally have aimed to improve transparency and best practice. Of course much of this relates to financial issues or concerns. In the UK, for example, the recent Bribery Act has led to more processes being put in place to prevent difficulty or breach at home or abroad as regards companies operating overseas (see publications noted below). In the context of charitable activities or projects, Trustees may have to delegate some day-to-day duties and responsibilities to local representatives. Evidently Trustees may need to allow the local representatives to make decisions and to authorise expenditure of funds without prior reference to the charity. It is vital to have checks to make sure that representatives are carrying out their duties properly, according to the trustees’ instructions. For example, the charity trustees may authorise local representatives to spend a certain budget without prior permission.
Financial diligence or best practice covers the need to consider:
implications of local tax laws (sales, income, corporation tax)
any local accounting or reporting requirements to government or a local regulator
differing business methods
whether local currencies are easily converted/repatriated
how much money to convert into a local currency
how to develop appropriate accounting and reporting systems and internal financial controls, taking account of local factors
staff training to ensure adequate accounting records are kept and budgets approved
variations between countries in providing evidence of transactions;
how to keep cash and documents safe
monitoring transactions that occur in different countries
meeting the financial reporting requirements of different institutional donors
In order to mitigate any risks, Trustees should ensure that:
the scope and extent of duties and responsibilities delegated to local representatives is documented
local representatives have procedures manuals (translated where necessary), have read them and understand what is required
local representatives can only spend up to a certain limit
local representatives know what types of expenditure they have authority to make if there is a risk that an activity which the trustees are planning will be subject to local legal challenge the trustees should:
assess the extent of the risk that they would be running and the extent to which that risk could be removed or reduced
use their knowledge of local conditions and of the needs of beneficiaries to consider what course of action would be in the best interests of the charity
take appropriate legal and other advice
balance the benefits of carrying out that activity against the dangers and disadvantages of doing so – these include the potential human, financial and reputational cost
Practical Tips
See also the books and articles by the Author on Due Diligence, Corporate Governance and Risk Management which include relevant guidance and tools to assist when checking partners listed on www.lindaspedding.org
A Partnership Agreement
A signed agreement with partners overseas should generally cover or include:
agreement by the partner to provide regular donor reports – these should be of actual spend in a set format and signed off by a senior manager
agreement to apply funds only for the purposes given (a restricted fund)
the maintenance of appropriate accounting records
right of access at all times (announced or unannounced)
milestones and timetables
audit provisions (internal, external or both)
Corporate Relationships and CSR Initiatives
Here corporate governance and related issues are treated as an inevitable outcome of the process of integrated reputation risk management in today’s world. Briefly, it can be regarded in two ways: in a limited sense that covers financial controls; and more broadly, it can be taken to extend to all of the responsibilities and policies of the business, including such matters as environmental concerns. Between these two approaches there are, of course, many variations. What is clear is that the trend is in favour of widening the scope of the term.
As with other debates over such issues as sustainability, it is recognised that the role of business in today’s global economy is profound and that accountability should be extensive. Stakeholders, including members of the public – and not only those with a direct interest in the company – are demanding more transparency and evidence of responsible behaviour. Therefore, for many observers corporate governance is becoming a value, including ethical and moral dimensions, that forms part of a framework under which business decisions are taken that also has key consequences for its reputation. This means that when working with charities or on charitable projects or initiatives such values are very important and can impact the relationship and outcome as a whole.
Corporate Responsibility (CR) Management
Elements of CR management are often identified with corporate social responsibility (CSR), corporate accountability, corporate citizenship, sustainable responsible business, and more recently corporate sustainability . They can have an impact upon reputation, both through adding value to reputations, and by predicting and mitigating potential reputational damage. More recently, conscious capitalism, aspects of conscience and moral or values-driven leadership, including cutting edge thought leadership, may be noted. The history and increasing coalescence of these terms should be borne in mind as subjects of ongoing relevance. Reference may be made to relevant comment in other publications by the Author in this connection.
It is interesting to note that the term ‘corporate social responsibility’ came into use in the late 1960s and early 1970s and was used to describe corporate owners beyond shareholders. Similarly, by way of example, in the Indian subcontinent CR evolved long ago based upon attaining a licence to operate in the community through providing community facilities as well as employment. Family dynasties often built their reputations in this way. Meanwhile, in the West the well known sector leader, Cadburys, followed a similar approach. Influential thinkers in this field were Howard Bowen (1953) in his book Social Responsibilities of the Businessman[i], where he conceptualized CR as social obligation by the individual: the obligation ‘to follow those lines of action which are desirable in terms of the objectives and values of our society’. Archie Carroll developed this idea further and theorised that businesses have a social responsibility which:
‘…encompasses the economic, legal, ethical, and discretionary expectations that society has of organisations at a given point in time”.
In 1984 R. Edward Freeman released an influential book, Strategic Management: A Stakeholder Approach, which also offered the message that stakeholder relationships are fundamental as good management practice really is based on relationships: relationships with stakeholders who both comprise and affect, or are affected by, the business. This point is noteworthy also for the purposes of the current discussion, particularly in the context of transboundary and cross cultural participation. Indeed the debate over stakeholders and appropriate communication has developed as a key driver for best practice in many respects.
Concluding Remarks
It has become increasingly understood that risks can also offer positive opportunities and in any discussion a charity should aim to identify these prior to entering into any formal collaboration. Such debate can also reveal important cultural and policy approaches that can indicate compatibility in objective and ways of working to maximise effectiveness. For example some organisations prioritise lobbying and campaigning opportunities while others prefer to work in a discreet and low key way. Another useful tip is to clarify what the relevant parties understand by various terms so that the association enhances efficiency rather than creating confusion. In this regard it is helpful for proposed members of any collaboration to carry out a risk identification exercise – which can also be helpful in any work proposal or fund raising activity – to enable more understanding and to attain some insight into possible opportunities that can also enhance respective organisational reputations.
Dr Linda S Spedding holds an LL.B. (Hons), LL.M., and Ph.D. Qualified as a Solicitor (England &Wales), an Advocate (India) and an Attorney (USA), she has been an international adviser and author – and activist for positive change – for over 27 years. She has also been a friend and supporter of the NGO community over this period, assisting many and raising awareness of their contribution through her writing and advisory activities. In addition to larger organisations, Dr Spedding has assisted many SMEs , business associations and chambers with their proactive risk strategies and has worked to encourage good communication between the responsible parties, that is public, private and non profit. She has been committed to the debate on improving ongoing due diligence, corporate governance and ethical conduct as well as appropriate risk management: she has advised, trained and published extensively in these areas. She also provides the ideal mix of experience as an international legal practitioner with her specialist understanding of international environmental law, who has achieved a substantial reputation as an author and lecturer (www.lindaspedding.org). Dr Spedding has been an international advisor to many commercial and sprofessional bodies both in the private and public sector. From the outset she has been committed to corporate social responsibility, often termed CSR, and corporate responsibility. She is a Trustee and officer of various charities internationally. Throughout her career Dr Spedding has assisted a small international multi – cultural charity as part of her work life balance. She serves on several committees of non profit organisations, including the SCI Business Strategy Committee, the ABA CSR International Committee and NAWL International Committee. She is also International Adviser to SAARCLAW and the BCCCF. In her non profit activities she has led training sessions and roundtables on governance and has worked with the International Department of the UK Charity Commission to improve regulation and best practice among the non profit community through improved communication and relevant tools. In her professional life Dr Spedding is well known for her contribution to ethical and environmental concerns, sustainable development and appropriate investment developments, including the global environmental and energy debates. She has been part of the gender and leadership debate and is Founder of Women in Law and Women in Law International (www.womeninlawinternational.com). Dr Spedding’s voluntary, pro bono and charitable activities have been well respected for many years.
[i] Bowen, Howard. Social responsibilities of the businessman. New York, Harper (1953).
Introductory Remarks
Charities operating internationally often work with partners in other countries. In this instance the term partner can vary from a formal agreement along the lines referred to below to more informal arrangements. In any event both due diligence and reputation risk management are vital and an understanding of shared values and commitments extremely important form the outset. In this article it is intended to consider aspects of due diligence and reputation risks mainly from the perspective of a UK based Charity considering overseas collaboration and projects. A phased practical approach has been recommended by the Charity Commission in the UK as follows:
1. Research.
networking with similar organisations home and abroad
fact-finding missions
talking to local groups overseas about needs and possible projects
talking to experts at home about practical aspects of possible projects
2. Implementation
deciding to operate in a particular country
selecting one project from shortlist
visiting the selected project to:
- establish viability and long term benefit to the community,
- check availability of local skilled staff to undertake project work
- work out detailed costs
- setting fundraising targets
- identifying target groups for fundraising
- arranging local media coverage
- contacting possible grant makers
3. Long term aims
drawing up long term aims/mission statement (i.e. to relieve poverty by setting up income generating projects and by the provision of training facilities);
establishing future contacts with other organisations with similar aims;
drawing up procedures for selection of projects and beneficiaries with the following features:
- all trustees to review applications
- a personal meeting with leaders of partner organization before proceeding
- only deal with organisations with an established track record
- ask independent experts to assess viability of projects
- undertake in-depth analysis of a local situation
Combining resources can be a cost-effective and efficient way to achieve a charity’s purpose. It is well known that much international work is based on collaboration, for instance, between a UK charity and a local partner in another country. There are key practical issues that relate to the choice of partner or relationship that will enable the charity to operate effectively wherever it forms relationships. Therefore when making a decision to carry out activities overseas the charity – particularly the Trustees – must be abreast of the legal requirements not only in the UK but also in the jurisdiction of choice. Thorough understanding of the overseas location is vital and it is submitted that travel to that jurisdiction is very important to enable a form of due diligence that can cut through much of the paper based due diligence or reliance on local inputs through technological or other methods. Before entering into any form of collaboration it is prudent to carry out a preliminary simple due diligence exercise to ensure that are aware of who they are dealing with and that any arrangements are reciprocal, balanced and clear as far as possible. Selected headings for this exercise are:
- Accurate full name and address of organisation and its officers;
- Year of formation and registration (if applicable) and standing;
- Legal status;
- Key contact details;
- Main objectives and activities;
- Financial overview;
- Current relationships and stakeholders;
- Relevant resources including fixed assets; and
- Reputation and references.
It is very useful to gather as much information as possible in advance and to check the accuracy of the information by some form of cross or spot check with, for example, stated beneficiaries. When considering the collaboration strategy, any reputation risks must also be taken seriously so that the collaboration is really effective and in the interests of all parties. Even after the preliminary steps have been taken there should be an ongoing evaluation of such issues. Simple headings or issues to regularly review in checklists that are relevant in any collaboration are:
- Ongoing objectives;
- Local and international drivers including administrative and legislative developments;
- Finance or Banking environment;
- Relationships including Contracts;
- Customer or beneficiary and stakeholder care;
- Culture and Ethics;
- Human resources / personnel;
- Information technology;
- Management approach and policy;
- Marketing (if any);
- Property or fixed assets (if any);
- Regulatory concerns including health and safety;
- Reputational Issues;
- Security;
- Time constraints and priorities; and
- Other relevant available information
Relationships are a human experience that should be prioritised and cherished. Respect for the local partners or those organisations – including their decision makers – that the charity is in collaboration with is a key point that can often be overlooked. In this article a short overview is given to raise awareness of some issues that may be relevant whether in the context of working with a local non profit organisation or with a profit organisation as part of their corporate responsibility. It is considered that in view of the global nature of many activities – especially given the impact of rapid technological advance and recent regulatory trends – that integrity, trust and transparency are crucial ingredients throughout the life of any international project or relationship.
Reputation Risk Management
Reputation risk management has become an increasingly recognised and important area of risk management in most jurisdictions, particularly over the last two decades, mainly because:
- A good reputation is considered the key asset in strategic approaches to risk;
- Continuing globalisation and a shrinking world affects the style of most relationships and the speed with which they develop ; and
- The ever-growing influence of internet technology (IT) applications can have a major impact upon reputational goodwill or value.
- Aligning an organisation – from top to bottom and vice versa – with its brand is crucial for managing a brand in the eyes of stakeholders;
- Aligning the organisation, its operations, and its culture around its brand values brings to life the ‘promise’ that the brand makes.
Good practice tips on staff engagement reputation risk management are:
- Respect the role of staff, as well as volunteers, to be ambassadors
- Communicate honestly with staff about relevant operations, goals, financial performance, and policies
- Have clearly communicated policies and practices that are relevant to staff and such as retirement, health care, insurance, compensation, and other benefit plans;
- Provide mechanisms to protect internal reputation, including due attention to rights, health and safety, and executive and staff compensation schemes; and
- Maintain and publicise mechanisms for individuals to seek guidance and alert management and the board about potential or actual misconduct without fear of retribution, known as ‘Whistleblowing’ arrangements. Some Countries mandate the protection of corporate whistleblowers, with the US SEC offering the reward of a proportion of any fines or penalties resulting from activities uncovered by the whistleblower. Some individual companies also have programmes to offer reward to whistleblowers to help uncover any wrong doing, and thus avoid the involvement of regulators.
Procedures for Ongoing Reporting
It should be noted that the due diligence referred to here not only has regard to the setting up of the relationship but also the ongoing needs and requirements to enable a project to realise its potential. Of course these can vary to suit the nature of the relationship and partnership arrangements. The project or activity that is under consideration by way of a form of partnership should work towards achieving the aims of both parties.
In most jurisdictions Charity trustees have overall responsibility for how the charity’s funds are spent. However, they may delegate administrative duties connected with the day-to-day running of projects to local representatives. Trustees need to receive timely and accurate reports from local representatives. This will give them the information they need to make decisions. It will also help them to demonstrate that they are fulfilling their duties. The most important consideration is what projects will best fulfil the charitable purposes and provide maximum benefit to beneficiaries.
A basic due diligence that is recognised in most jurisdictions should cover:
local culture and traditions
the political situation
advice, information and views from local groups
As part of the checks (and in accordance with published guidance by the UK Charitable Commission) it is advisable to:
speak to others with the same interests to identify potential partners
take up references wherever practical
assess the viability of the potential partner
get to know the type of people and organisation you are dealing with and the way in which they operate before entering into a written agreement
require all potential partners to provide costed budgets and forward plans
identify clearly what results you are working towards and how to know when they have been achieved
establish local audit procedures, bearing in mind what is practical and possible
check local regulations on partnerships between local and foreign organisations
Many countries have specific laws and regulations relating to partnerships between domestic and foreign charities or non profit organisations and to the employment of local staff in foreign organisations. As noted the staff – and volunteers – can be natural ambassadors positively for the Charity and their treatment is a matter of concern. It may be useful, for instance, to recommend that the charity:
arranges for basic security training for all staff and volunteers employed to work in an unstable or challenging environment – this is usually available from a number of training suppliers or organisations
has a security policy in place. Staff and volunteers should receive a written assessment of security and health risks, emergency evacuation procedures
and insurance arrangements.
Arrangements with Potential Partners
Any collaboration arrangements or forms of association, coordination or cooperation should seek to enable charities to:
- work together effectively;
- find solutions and problem solve collectively; and
- be generally mutually supportive, specifically to manage risks and to realise opportunities in connection with resilience, sustainability and fundraising.
As the UK Charity Commission has also indicated in respect of overseas activities, local rules should be checked before entering any arrangements to ensure that:
the activities they intend to carry out through their local partners are in furtherance of their charity’s purposes
their partners are – and continue to be – appropriate for the charity to work with the trustees have taken reasonable steps to monitor the use of funds to make sure that:
a) their partners can and will apply funds for proper charitable purposes
b) relevant funds reach their partners and end beneficiaries
When a partner is selected, a formal agreement with all parties setting out what is expected of each is useful. Many recent regulatory changes internationally have aimed to improve transparency and best practice. Of course much of this relates to financial issues or concerns. In the UK, for example, the recent Bribery Act has led to more processes being put in place to prevent difficulty or breach at home or abroad as regards companies operating overseas (see publications noted below). In the context of charitable activities or projects, Trustees may have to delegate some day-to-day duties and responsibilities to local representatives. Evidently Trustees may need to allow the local representatives to make decisions and to authorise expenditure of funds without prior reference to the charity. It is vital to have checks to make sure that representatives are carrying out their duties properly, according to the trustees’ instructions. For example, the charity trustees may authorise local representatives to spend a certain budget without prior permission.
Financial diligence or best practice covers the need to consider:
implications of local tax laws (sales, income, corporation tax)
any local accounting or reporting requirements to government or a local regulator
differing business methods
whether local currencies are easily converted/repatriated
how much money to convert into a local currency
how to develop appropriate accounting and reporting systems and internal financial controls, taking account of local factors
staff training to ensure adequate accounting records are kept and budgets approved
variations between countries in providing evidence of transactions;
how to keep cash and documents safe
monitoring transactions that occur in different countries
meeting the financial reporting requirements of different institutional donors
In order to mitigate any risks, Trustees should ensure that:
the scope and extent of duties and responsibilities delegated to local representatives is documented
local representatives have procedures manuals (translated where necessary), have read them and understand what is required
local representatives can only spend up to a certain limit
local representatives know what types of expenditure they have authority to make if there is a risk that an activity which the trustees are planning will be subject to local legal challenge the trustees should:
assess the extent of the risk that they would be running and the extent to which that risk could be removed or reduced
use their knowledge of local conditions and of the needs of beneficiaries to consider what course of action would be in the best interests of the charity
take appropriate legal and other advice
balance the benefits of carrying out that activity against the dangers and disadvantages of doing so – these include the potential human, financial and reputational cost
Practical Tips
- Develop improved risk management systems which act as a barometer of public sentiments and as an early warning system for emerging risk issues;
- Keep stakeholders satisfied that these risks are noted and managed;
- Improve corporate governance structures and access to capital;
- Potentially increase cost savings, such as energy and environmental efficiencies, and more measures against corruption;
- Improve community relationships and building of trust;
- Communicate well;
- Attract and retain employees;
- Build better relations with governments, at home and abroad
See also the books and articles by the Author on Due Diligence, Corporate Governance and Risk Management which include relevant guidance and tools to assist when checking partners listed on www.lindaspedding.org
A Partnership Agreement
A signed agreement with partners overseas should generally cover or include:
agreement by the partner to provide regular donor reports – these should be of actual spend in a set format and signed off by a senior manager
agreement to apply funds only for the purposes given (a restricted fund)
the maintenance of appropriate accounting records
right of access at all times (announced or unannounced)
milestones and timetables
audit provisions (internal, external or both)
Corporate Relationships and CSR Initiatives
Here corporate governance and related issues are treated as an inevitable outcome of the process of integrated reputation risk management in today’s world. Briefly, it can be regarded in two ways: in a limited sense that covers financial controls; and more broadly, it can be taken to extend to all of the responsibilities and policies of the business, including such matters as environmental concerns. Between these two approaches there are, of course, many variations. What is clear is that the trend is in favour of widening the scope of the term.
As with other debates over such issues as sustainability, it is recognised that the role of business in today’s global economy is profound and that accountability should be extensive. Stakeholders, including members of the public – and not only those with a direct interest in the company – are demanding more transparency and evidence of responsible behaviour. Therefore, for many observers corporate governance is becoming a value, including ethical and moral dimensions, that forms part of a framework under which business decisions are taken that also has key consequences for its reputation. This means that when working with charities or on charitable projects or initiatives such values are very important and can impact the relationship and outcome as a whole.
Corporate Responsibility (CR) Management
Elements of CR management are often identified with corporate social responsibility (CSR), corporate accountability, corporate citizenship, sustainable responsible business, and more recently corporate sustainability . They can have an impact upon reputation, both through adding value to reputations, and by predicting and mitigating potential reputational damage. More recently, conscious capitalism, aspects of conscience and moral or values-driven leadership, including cutting edge thought leadership, may be noted. The history and increasing coalescence of these terms should be borne in mind as subjects of ongoing relevance. Reference may be made to relevant comment in other publications by the Author in this connection.
It is interesting to note that the term ‘corporate social responsibility’ came into use in the late 1960s and early 1970s and was used to describe corporate owners beyond shareholders. Similarly, by way of example, in the Indian subcontinent CR evolved long ago based upon attaining a licence to operate in the community through providing community facilities as well as employment. Family dynasties often built their reputations in this way. Meanwhile, in the West the well known sector leader, Cadburys, followed a similar approach. Influential thinkers in this field were Howard Bowen (1953) in his book Social Responsibilities of the Businessman[i], where he conceptualized CR as social obligation by the individual: the obligation ‘to follow those lines of action which are desirable in terms of the objectives and values of our society’. Archie Carroll developed this idea further and theorised that businesses have a social responsibility which:
‘…encompasses the economic, legal, ethical, and discretionary expectations that society has of organisations at a given point in time”.
In 1984 R. Edward Freeman released an influential book, Strategic Management: A Stakeholder Approach, which also offered the message that stakeholder relationships are fundamental as good management practice really is based on relationships: relationships with stakeholders who both comprise and affect, or are affected by, the business. This point is noteworthy also for the purposes of the current discussion, particularly in the context of transboundary and cross cultural participation. Indeed the debate over stakeholders and appropriate communication has developed as a key driver for best practice in many respects.
Concluding Remarks
It has become increasingly understood that risks can also offer positive opportunities and in any discussion a charity should aim to identify these prior to entering into any formal collaboration. Such debate can also reveal important cultural and policy approaches that can indicate compatibility in objective and ways of working to maximise effectiveness. For example some organisations prioritise lobbying and campaigning opportunities while others prefer to work in a discreet and low key way. Another useful tip is to clarify what the relevant parties understand by various terms so that the association enhances efficiency rather than creating confusion. In this regard it is helpful for proposed members of any collaboration to carry out a risk identification exercise – which can also be helpful in any work proposal or fund raising activity – to enable more understanding and to attain some insight into possible opportunities that can also enhance respective organisational reputations.
Dr Linda S Spedding holds an LL.B. (Hons), LL.M., and Ph.D. Qualified as a Solicitor (England &Wales), an Advocate (India) and an Attorney (USA), she has been an international adviser and author – and activist for positive change – for over 27 years. She has also been a friend and supporter of the NGO community over this period, assisting many and raising awareness of their contribution through her writing and advisory activities. In addition to larger organisations, Dr Spedding has assisted many SMEs , business associations and chambers with their proactive risk strategies and has worked to encourage good communication between the responsible parties, that is public, private and non profit. She has been committed to the debate on improving ongoing due diligence, corporate governance and ethical conduct as well as appropriate risk management: she has advised, trained and published extensively in these areas. She also provides the ideal mix of experience as an international legal practitioner with her specialist understanding of international environmental law, who has achieved a substantial reputation as an author and lecturer (www.lindaspedding.org). Dr Spedding has been an international advisor to many commercial and sprofessional bodies both in the private and public sector. From the outset she has been committed to corporate social responsibility, often termed CSR, and corporate responsibility. She is a Trustee and officer of various charities internationally. Throughout her career Dr Spedding has assisted a small international multi – cultural charity as part of her work life balance. She serves on several committees of non profit organisations, including the SCI Business Strategy Committee, the ABA CSR International Committee and NAWL International Committee. She is also International Adviser to SAARCLAW and the BCCCF. In her non profit activities she has led training sessions and roundtables on governance and has worked with the International Department of the UK Charity Commission to improve regulation and best practice among the non profit community through improved communication and relevant tools. In her professional life Dr Spedding is well known for her contribution to ethical and environmental concerns, sustainable development and appropriate investment developments, including the global environmental and energy debates. She has been part of the gender and leadership debate and is Founder of Women in Law and Women in Law International (www.womeninlawinternational.com). Dr Spedding’s voluntary, pro bono and charitable activities have been well respected for many years.
[i] Bowen, Howard. Social responsibilities of the businessman. New York, Harper (1953).