Privately held businesses (PHBs) are adopting corporate social responsibility (CSR) policies not just to save the planet but because they are having to in order to survive and prosper. According to the latest Grant Thornton International Business Report, 65% of PHBs cite recruitment and retention pressures as their main CSR driver, closely followed by cost management concerns (63%), suggesting that controlling costs is not only good for business but also good for business ethics.
While multinational companies may engage in CSR activities to manage their reputation, PHBs are ignoring expensive PR campaigns and focusing on the basics - making themselves more attractive as employers and suppliers. 71% actively promote workforce health, 64% promote equality and diversity and 62% have flexible working practices, benefits that have previously been associated with large employers. These statistics show that the individual's choice in where they are employed is influencing company behaviour at PHB level. As significantly, 56% of PHBs report having formally adopted transparent CSR policies, a measure of the influence companies higher up the supply chain are having on potential suppliers.
Alex MacBeath, global leader of privately held businesses says: "PHBs should be applauded for the advances they are making in the CSR field. While less accountable to multiple stakeholders than listed companies, and despite their lack of resources, experience and peer pressure to develop best practice, the sheer critical mass of the PHB sector means their collective efforts will have a significant impact on the global CSR picture. PHBs are putting substance before style in their CSR activities and rightly focusing on their bottom line but their efforts are in danger of being drowned out by the noise of the multinationals."
He added: "The individuals who own PHBs have a speed advantage over the multinationals, however, as their ethical policies can be adopted much more quickly than within the more complex structure of larger companies. The PHBs that introduce ethical business practices quickly and efficiently will survive and prosper, as they will secure the skilled workers and the future contracts with the multinationals."
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Issued on: 27 February 2008
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