CSR - Reach out

Good hearts in the business community are seen as hard to find. Excepting a few wealthy philanthropic individuals, the business world has not historically been famed for its generosity and scant regard was paid previously to anything that detracted from the bottom line. However, during the 1980s and 1990s, there was a significant movement towards corporate social responsibility and firms have begun to take a much keener interest in how their actions affect their employees, the communities in which they operate and society at large.

But what exactly is CSR, is it something that insurance brokers should be bothered with and also, who stands to gain when firms make it a central consideration in their day-to-day operations?

In answer to the first question, The World Business Council for Sustainable Development, in its publication Making Good Business Sense by Lord Holme and Richard Watts, used the following definition: "Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." It is therefore not surprising that many CSR strategies have revolved around the environment and the impact of business on it.

However, this is not the whole story, as CSR has a large part to play in community relations, charity and staff well being.

Insurance is often referred to as a people business. Relationships are everything and it is their strength that determines how well firms have done in the past, how good their reputations are in the market and how well they have been able to hold on to and expand their client bases.

For a sector so geared towards forging and nurturing these relationships, it is perhaps unsurprising that, often, brokers have very effective CSR programmes and play a part in their local communities.

Mark Freeman, a director at Shropshire broker Henshalls, comments: "We just feel this is something we should do and it is something we enjoy. Our CSR approach has evolved over time." Most of the firm's directors are involved with local organisations such as the Chamber of Commerce, sports clubs, schools and charities, while the fund-raising ideas tend to come from the staff.

Involvement

Whether it is a charity auction, a coffee morning, rafting down the River Severn or playing rounders, Freeman says that staff members like to play their part. According to him, there are a few champions that tend to start the ball rolling for most events, though he adds: "It is ad hoc but very regular. People see what is happening locally and then try to become involved."

There is no three-line whip when it comes to events organised by the firm, which Freeman says helps create a relaxed and positive atmosphere around the office.

For example, when everyone is working hard and trying to deal with the stresses and strains of everyday office life, he believes that the charity work creates a great diversion, helping to keep everybody grounded.

Jon Whiteley, managing director at ProAktive Risk Group, a broking, risk management and financial planning operation, feels much the same. Based in Doncaster, Whiteley says that his firm has given over £50,000 to the local foundation in the last four years, with the money going to various local charities. There are no rules as to how or when the money is raised but he says it is never less that £10,000 in a single year.

There tends to be one big annual event that is put forward by the management, while the more regular dress-down days and money-raising initiatives are organised by the staff. Whiteley remarks: "The atmosphere, the craic and the smiling faces prove that it works."

From a commercial point of view, Whiteley adds: "I think it does have a positive effect on how clients view us as a company. It also develops friendships and business relationships and helps make us more accessible."

By making a concerted effort to support local sports clubs, Whiteley comments that the brand is well recognised in the local area and that this makes it easier to source opportunities to speak to new business opportunities. By helping others with their involvement in the local community, there is little doubt that ProAktive and others are also doing a lot to help themselves.

In-built

This is a significant part of the strategy when it comes to the CSR stance of South-west broker Higos. The firm also undertakes a lot of small events but, in addition, commits £20,000 a year to a marketing budget aimed specifically at promoting the brand and helping local initiatives and causes.

Whether it is supporting the Somerton Arts Festival, helping bring reindeer to the city centre of Wells or organising special events insurance for concerts in the cathedral, many community events would not be able to take place without the firm's support.

Managing director Ian Gosden says that the firm tries to keep its support for children and cancer causes, as they have such a wide-reaching impact on so many people's lives, though otherwise there are few firm rules.

Outreach

Gosden also takes time to give talks to local schools and colleges to explain the possibilities that the insurance sector has to offer and try to provide some motivation for people to achieve the qualifications that they need to succeed in life. He remarks: "We train our own staff and we have to have a good reputation if people are going to want to work for us."

Whether through sponsorship, charity events or involvement in local clubs and organisations, taking an active role in community support helps firms to raise their profile and put them in touch with potential new clients. Yet, if firms try to do their bit for the local community then any of them that are mindful of social responsibilities will begin with their employees.

This is how Gosden feels: his employees own 28% of the firm. The health care insurance offered to employees provides cover with no exclusions regarding pre-existing conditions and he says that there is a generous pension scheme in place. He believes that putting employees on a sound footing gives them the support that they need to be valuable members of the community.

Without there being any obligation on staff to work long hours, he also says that extra shifts are available for those wishing to take them on and, while the company benefits from the work done, Gosden comments that employees also have the opportunity to earn extra money when they need to. As such, the firm's flexible approach makes it easier for employees to cope with things that may arise out of the blue.

ProAktive also runs flexible working hours and staff can choose to work a basic nine-to-five, or start and finish earlier or later. The idea, according to Whiteley, is to create extra flexibility for staff, although he says that full flexi-time is not possible due to potential disruption that it would cause to customer service.

The firm works hard to move away from a long-hours culture, which Whiteley says is damaging to staff, their families and the wider community in turn: "Long hours and working at that pace leads to stress, broken relationships and poor quality of life. How can that be good for the community?"

It may be easy for some to write off CSR at a local level as nothing more than people being busybodies but, when considering the millions of pounds raised because of such activity, the positive impact that it has and the benefits generated, it becomes difficult to see why not all firms have embraced this approach to CSR fully.

CSR has come a long way over the last 30 years and, given the momentum that the movement has built, it is likely that we will see it progress further in the coming years.

BENEFITS OF ADOPTING CORPORATE SOCIAL RESPONSIBILITY

- A good reputation can make it easier to recruit employees.

- Employees may stay with a firm for longer, potentially reducing the costs and disruption caused by recruitment and retraining.

- Employees can become better motivated and more productive.

- Engaging in CSR activity helps to ensure that you comply with regulatory requirements.

- Activities such as community involvement provide promising opportunities to generate positive press coverage.

- Good relationships with local authorities can make doing business in the community easier.

- Understanding the wider impact of your business can help you to generate profitable new products and services.

- CSR can make you more competitive and may reduce the risk of sudden damage to your reputation and sales. Investors recognise this and are may be more willing to offer finance.

Source: Business Link.

GOVERNMENT ADVICE FROM BUSINESS LINK

Working with the local community brings a wide range of trading benefits including local customers, which are an important source of sales for many businesses. By improving their reputations, it can be easier for firms to recruit employees. A good relationship with local authorities can also make business life much easier. For example, some local authorities prefer to award contracts to businesses with a record of community involvement.

There are many ways to become involved. Some businesses choose to support or sponsor a local charity or event and it makes commercial sense to seek involvement in an activity related to a firm's product or service. This approach allows companies to use their expertise as well as show the human face of their businesses; for instance, some restaurants provide food to local homeless groups, while builders may give free labour and materials to community projects.

Firms should look for opportunities that will benefit them directly, perhaps by generating publicity or improving the neighbourhood in the vicinity of their premises. Many businesses involve their employees in working with the local community, sometimes by supporting charities chosen by employees. Some encourage employees to volunteer for community activities and also give them paid time off to do this. As well as improving business-community relations, this can help motivate employees and help develop their interpersonal and team-participation skills. Firms could even give employees the option of making regular charitable donations that are deducted from their pay at source.