Aligning business operations with social values in the Middle East and North Africa (MENA) region is an emerging vogue, but whether the region can sustain it is a question that pundits are hard at work trying to answer. Exactly what challenges await the take-off of Corporate Social Responsibility (CSR) in the MENA region remains to be seen over the next few years. What is sure for now is that CSR is taking hold at an encouraging speed though a few bumps ahead must be considered.
Major businesses in this region are either family-owned or state-fostered, which has created a forbidding culture of resistance to change. Save a few philanthropic efforts, for a long time corporate giving has been a cultural nemesis to the traditional growth of business. Some of these major businesses are now experiencing drastic transformations, having overcome decades of economic instability, and today are being led by a new generation of western-educated family heirs. Though this is an encouraging sign for CSR, it should not be a sign of optimism that business culture is experiencing a metamorphosis towards making the world a better place.
On the demand side of the equation, a lack of awareness for the need and importance of socially responsible companies is flagrantly evident. This makes it onerously difficult to mobilize advocacy and lobbying campaigns in favor of company disclosure and good business practices. Very rare are the voices in the region demanding the adoption and promulgation of social values by companies. Successful CSR rests on the two pillars of accountability and transparency, both of which are produced by business disclosures, which are rarely a legal requirement in the business practice of companies in the region.
The success of CSR depends not on companies alone, but also on the ability of the public sector to encourage such practice through taxation-sensitive policies and on civil society’s maturity and efforts in motivating companies and offering them the needed assistance in making CSR a reality. The role played by non-profit civil society is key in developing necessary watchdog mechanisms and creating indicators and measurements of success. The weakness of the civil society sector and its lack of expertise in the MENA region in general stand as key impediments to the success of that sector in pushing forward a culture of CSR.
Against what yardsticks will business social responsibility be measured? This is a question that needs to be answered at the outset of CSR work and without which business performance will remain the work of the arbitrary whims of CEOs. Tying business performance to social responsibility is, for starters, an initial indicator for measuring success. Measuring companies’ practices and their impacts on employees, community and the environment is another example of developing measures and indicators of success in CSR.
While there is significant success in developing corporate governance of companies in the region and in certain areas of corporate giving, the region remains an underachiever when it comes to such important issues as human rights, business ethics, environmental policies, community development, poverty alleviation, gender and diversity issues, among others. Civil society, along with governments, is normally the leader of debates on these issues but in this region the case is different. It is hence unclear how companies can blaze the trail on these issues without the necessary infrastructure that they require and the awareness that underpins them.
Some of the major challenges slowing down the full emergence of CSR in the MENA region are the fight against terrorism and the restrictions that this fight has imposed on the existing culture of corporate giving. While the so-called war on terrorism calls for politically responsible corporate giving, the restrictions imposed on companies have mitigated efforts of streamlining corporate giving with the requirements of sustainable development. Lest they be accused of sponsoring terrorism, companies in the region have significantly curtailed programs from poverty alleviation to tsunami relief efforts.
While the balance of factors is still not fully in favor of CSR in the region, encouraging signs persist. The newly acquired resilience of regional companies and their tireless efforts to link with the global economy are signs that bode well for the future of CSR in the MENA region.
Oussama Safa is the general director of the Lebanese Center for Policy Studies
