CSR Europe needs new leadership and focus on the big responsible business issues

Of the challenges facing responsible business membership organisations, few can seem more daunting than those that face CSR Europe.

It has to achieve a fine balancing act. It covers a geographical region that is hugely diverse, with very different cultural responses to corporate responsibility.

It has its own corporate members, which provide it with the bulk of its income. At the same time it supports a range of national partner organisations (NPOs) that target the same members where they operate in their own countries.

It enjoys neither the benefits of the truly global organisation, such as a World Business Council on Sustainable Development – which is clearly for global companies – nor the benefits of the national organisation, which has clear relevance for companies based in one particular country.

Arguably, it has made good progress in treading a fine line. It has focused on those aspects that it can uniquely claim as its own, for instance speaking to the European commission as the business voice on corporate responsibility.

It has also made an asset out of the awkward fact that its turf overlaps with that of others by creating a formal network of those organisations and convening meetings to exchange best practice.

KPMG Europe’s head of CSR, Mike Kelly, is clear about the value he feels KPMG gets from its membership. “It is the only network organisation that works for us beyond national boundaries,” he says. “We use the CSR Europe newsbundle as a tool across 64 countries – primarily to inform at a local level. And it gives us the opportunity to profile some of our under-represented firms, such as those in Hungary or Slovenia, which is a great benefit internally.”

On the downside, the recession has seen a number of members reassessing their commitments, and some have decided to part ways. Janet Blake, head of CR engagement for BT – and a former member of the CSR Europe board – says BT has opted to stick with US-based group Business for Social Responsibility (BSR) because it has a “genuinely global outlook” and this is important to BT as a global company. A focus on Europe did not represent an important enough benefit to BT when it needed to cut costs.

A unique role

However, she says, the company ended its CSR Europe membership with regret. “I do recognise that CSR Europe has a unique part to play as a lobbying voice into the heart of the European commission.”

That role particularly came to the fore in 2006 when the commission dismissed NGO demands for a more robust regulatory approach to corporate responsibility. It announced instead the creation of a European Alliance on CSR, which would be business-led and would receive no funding from the commission itself.

Even some of the organisation’s critics acknowledge that CSR Europe played a key part in taking up the baton during those negotiations. It formed a series of “laboratories”, aiming to bring companies and non-profit groups together to innovate around shared areas of concern.

One close stakeholder who asks not to be named says CSR Europe has been the key delivery organisation for the alliance. “Give them their due – without them there would have been no results at all,” he says.

“But there are still questions about how CSR Europe engages with the European commission. In my view, it could be accused of spending too much time promoting CSR Europe as the delivery vehicle for corporate responsibility, rather than promoting CR and focusing on achieving social outcomes.”

And the outcome of those laboratories had been widely seen to be patchy, with quality being an issue. Some of the groupings produced serious and important work. For instance, the research project led by the European Academy of Business in Society – EABIS – on measuring the financial and non-financial performance of companies was highly regarded, and a document on responsible marketing addressed an important new audience within businesses.

Mish-mash

Too many, however, were seen as pulling together “a mish-mash of material that was already out there”. With no over-arching vision for what a laboratory should do, they achieved their primary aim – to show the commission that business could respond to the challenge of the alliance with activity. But they largely failed to achieve significant impact in furthering the development of corporate responsibility in Europe.

The next big focus defines the successor to the laboratories – an initiative called Enterprise 2020, which is currently being launched.

Enterprise 2020 poses the question: in ten years’ time, how will companies look? What are the challenges they will face?

The initiative will largely work through similar working groups, but this time with a greater engagement with outside stakeholders. It focuses on four broad themes: transforming markets, inclusive societies, health and wellbeing, and transparency for trust.

Tomás Sercovich from Business in the Community Ireland praises the new focus. “It’s great how the subject links so well with the political agenda that the European Union has set out – showing how CSR runs in parallel to key themes at that level.”

Several stakeholders additionally praised the inclusion of a more collaborative approach for the Enterprise 2020 initiative. But critics of the old laboratories generally agreed they were not yet sure that the new exercise would achieve any greater coherence or “intellectual depth”. CSR Europe, they believe, needs to be more proactive in ensuring that good quality outcomes are achieved.

Leadership drift

A key challenge for CSR Europe has been enduring a crisis of leadership. It is currently without an executive director, after previous incumbent Kerstin Born was removed from her post. A number of sources say the organisation suffered a period of drift during her tenure.

Former staff tell of difficult working conditions, which led to no fewer than nine senior people leaving over a two-year period. One, who asks not to be named, says working there had been “years of hell” with poor internal systems, and a loss of trust between the director and the management team, making it hard to achieve results.

“The only thing that held it all together was the total dedication of some of the staff who really believe in the mission, and tried against all odds to do good things.

“There is now a real opportunity, because CSR Europe has a lot going for it and can play an important role. With the right leader it could achieve a lot.”

The question of the executive leadership is not the only problem. Much of CSR Europe’s access to the European commission and general influence within business circles has no doubt been buttressed by the respect for its president, Viscount Etienne Davignon. Davignon, a former chairman of Société Générale de Belgique and a minister of state, has been one of the organisation’s greatest assets.

However, Davignon is in his 70s, and it is hard to see any current candidates matching his stature that will be in the wings when he eventually retires.

Membership organisations often have to work hard to carry credibility at senior levels. Some, such as WBCSD, or the International Business Leaders Forum, achieve this by getting top level bosses onto their boards – giving those people a real sense that they own the organisation and are committed to it. Others, such as CSR Europe, have done this through a president or chairman post held by someone that is an esteemed member of the peer group of top business leaders.

For some, this is indicative of another problem of governance. The CSR Europe board is made up of corporate responsibility managers. One stakeholder says: “The board lacks the heavyweight authority that it needs. There isn’t enough experience from people that are used to holding the executive to account.”

Others don’t agree. One member argues: “CSR Europe is a network for the CSR managers of its members. It is right that they have the control over how it operates.”

At the heart of the disagreement seems to be confusion over just what CSR Europe is for. In recent years it has given a lot of focus to meeting the needs of its members – with a highly regarded members’ helpline and the bulk of staff focused in membership services. But some feel it has failed to do what these sorts of organisations should strive to do, which is to challenge members to do more.

One former employee reflects on the financial crisis. “I do ask myself whether we did anything to pressure members in how they responded to the crisis. We were not proactive in defining our role in those circumstances, in the way that I saw some others doing.”

The big questions

This suggests that the new leadership will need early on to decide what kind of organisation CSR Europe is. An insider asks: “What kind of members does it attract? Are they the CSR leaders? Is it for leaders to come together? Is it a lobbyist? A thinktank? A broker between businesses and communities? A network of national membership organisations?”

One stakeholder said it needed to “get beyond the usual suspects to the unconvinced. It has spent too much time talking to the established CSR network”.

Thomas Koenen from German group Econsense, one of the chairs of the National Partners network and a CSR Europe board member, certainly believes that the organisation could be making more of what he sees as its key asset – a thriving network of organisations working with companies across the continent.

“This is the most interesting CSR network in Europe. People come together who experience similar challenges in different countries, and share together what has worked and what hasn’t. CSR Europe could do more to make the most of the network.”

A common theme among observers and members alike is that CSR Europe is an organisation facing a time of great opportunity. Whatever its challenges, it has good people, some important corporate members, a thriving network of goodwill, and a real part to play in helping the spread and evolution of CSR across Europe – and indeed wider.

There are worse places to start from than that.

CSR Europe declined to contribute to this feature. Mallen Baker was a board member of CSR Europe from 2006-08.

CSR Europe: key facts
70 corporate members
27 national partner organisations
16 staff
1996 – created as the European Business Network for Social Cohesion (changed to CSR Europe in 2000)
Figures from CSR Europe website, October 2010.