Corporates, communities, communications

The inimitable, irreplaceable Nelson Mandela will be buried this week.

 

Despite his message (or because of his distinctiveness), very few South Africans expect the leadership that has followed to rise to the same level, but one thing both government and the private sector in his country will nevertheless continue to struggle with is managing the high expectations of especially younger people in terms of job-creation and service provision.

 

Questions of expectations management arose this week at the 'governance of natural resources' session of the Blavatnik School's 'Challenges of Government' conference I attended  in Oxford (here). This focus was somewhat natural since the conference theme looked at issues of people-power and access and accountability and legitimacy. Yet even if that were not the theme, any contemporary discussion of governance and resources in Africa would need to focus strongly on expectations management issues by communities, governments and investors -- especially in countries that have only recently made significant discoveries of sub-soil mineral wealth.

 

Managing community and other expectations in the extractive sectors is not solely about communication strategies, but they are a big part of it. Firms would be advised not to confuse rolling-out social investment and responsibility strategies with handling short- and longer-term expectations: mollifying expectations is not necessarily managing them.

The challenge is not just aligning with community needs and wants those initiatives and investments that firms think would be and look good. It is also to communicate in credible, accessible ways information that helps communities understand realities such as the long timeframes between discovery and production, and between production and profit, or the difference between government's duties and corporate responsibilities, with all the delicate and political balances involved where the host governments at various levels also face and hold high expectations.

 

Firms still tend to focus on external audiences (the market, or activists back in the first world) in terms of their efforts towards communication strategies on corporate responsibility issues; one question discussed at the conference was whether that focus needs to shift more towards firms communicating what they are doing, can do, cannot do, etc., to (a) local community and government audiences and (b) internally with the firm in terms of explaining social engagement issues in ways that are shown to protect and enhance, not distract from, longer-term shareholder value.

 

Moreover, corporate responsibility issues (beyond the more narrow phenomenon of CSR programmes) arguably lie at the heart of firms' risk-management and value-creation concerns, especially in some sectors. Yet in many cases the issues are dealt with as aspects of corporate communications -- non-core and essentially addressed to external audiences.

 

This week saw the publication of KPMG's annual survey of corporate responsibility reporting (here). This follows trends in reporting on corporate responsibility (by over 200 of the world's largest firms, and the 100-biggest firms across 41 countries).

 

This does not necessarily reflect trends in corporate responsibility practices per se, including how these practices or the issues they represent are treated by boards and executives within these firms. Nevertheless, by assessing firms' reports against several criteria (including whether and how a firm's reporting shows how its management governs responsibility / sustainability issues within corporate governance), the KPMG survey does offer some insight into the extent to which these issues may be migrating from the relative periphery to more core areas of strategic and commercial consideration. One sign of that might be where a firm incorporates these issues into its general reporting to the market, rather than (or in addition to) distinct responsibility / sustainability reports.

 

The report is worth a read. In an ideal world firms and governments are managing problems, not just managing (through communication strategies) expectations about problems. In the real world, the latter will continue to matter a great deal to firms invested in places where formal reports of the sort surveyed by KPMG do not necessarily speak to the issues that lead to political and security pressures on firms and the governments that host them.

 

Jo