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Owner's Expectations Manual

6 Social Responsibility

  • The SOE Act requires every SOE to operate as a successful business and, to this end, to be an organisation that exhibits a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these, when able to do so. Therefore, SOEs have corporate social responsibility (CSR) obligations that go beyond other companies.
  • There are a number of leading international frameworks available to provide guidance on how SOEs could approach CSR. These frameworks emphasise that CSR is not just about visible programmes, but more importantly it is also about values and behaviours evident in an organisation's day-to-day operations. Accordingly, prescriptive approaches to CSR are unlikely to be successful, and it is recognised that one size does not fit all.
  • However, it is important to note that, in addition to having CSR programmes in place, SOEs have a fundamental obligation to behave in a socially responsible manner at all times. This obligation should therefore be reflected in all policies and be evidenced by company practices. To this end, shareholding Ministers are particularly sensitive to any breaches of an SOE's obligation to act in a socially responsible manner.
  • SOE boards must report any such breaches to shareholding Ministers as soon as practicable after any breaches are brought to the board's attention. Likewise, breaches should also be disclosed in the companies' annual reports. Robust procedures and accountabilities should also be put in place to ensure details of any breaches are communicated to boards in a timely way.
  • The most effective and appropriate way to address the CSR obligations of SOEs is to integrate CSR into the existing business planning process, with officials providing guidance and monitoring input to help with the consistency and quality of CSR plans.
  • Such an approach puts CSR objectives on the same footing as financial objectives. CSR targets and objectives are set in the SCIs, and subsequently reported against to help ensure transparency and accountability for CSR practices.
  • Under the CSR framework, the onus is on each SOE to look hard at the way it conducts its business, and put in place appropriate values and objectives and monitor performance against them. Complementary to this, each SOE should assess its impact on the society and environment within which it operates, and adopt specific CSR programmes that are appropriate to that SOE's impact on the environment and its interface with society in general.
  • Shareholding Ministers expect each SOE to have the following in place:
    • specification of CSR values and behaviours, and how these are incorporated into the fabric of the company
    • objectives and performance targets reflecting good social responsibility practice
    • specific CSR programmes, and
    • the reporting framework to be used.
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