The role of corporate responsibility in Thailand

Today we present excerpts from the interview we conducted with our first leader, Khun Anand Panyarachun, a former prime minister of Thailand. Q: When you look at the companies that have received the Thailand Corporate Excellence awards in the past five years, what do you see as the key drivers of their success?

A: There are many ways of judging these corporate units. Successful companies would need to show results in several areas and in several directions.

Lately, you often hear people talk about corporate governance. There are reasons for the governance factor to emerge as a very strong feature of any successful company.

What does governance imply? There is a need for the corporate body to project itself to all stakeholders that, in addition to the profitability level, there is an equally important feature that would be governance. Corporate governance is a multi-faceted subject but its main theme deals with issues of accountability and fiduciary duty. It is the set of processes and policies by which companies are directed and controlled.

You inject this governance feature into your systems. If people see that these companies take corporate governance seriously, I think they are assured that the products sold by these companies conform to environmental standards or conform to ethical standards, and that everything is done to ensure the interests of the consumers and the interests of stakeholders.

Governance applies to everything; it applies to production, it applies to mindset, it applies to the business culture of that company, and of course it applies to the boardroom.

Now, parallel to governance, the company has also embarked on corporate social responsibility, a concept that encourages companies to consider the interests of society.

The two elements of corporate governance and corporate social responsibility are not directly connected, but I think you can see the interaction between them. You will not have a company that focuses only on corporate governance to the neglect of corporate social responsibility and vice versa. You cannot have a good company or a successful company focusing on corporate social responsibility and neglecting corporate governance. The two things go together; they run parallel to each other. In a way, they are like Siamese twins. You have to do it together in tandem. There are some features of each that are similar but the end goal is the same _ it is not the bottom line. The end goal is to be a responsible corporate citizen.

Q: In general, how do you think companies in Thailand meet the standards of good corporate governance and corporate social responsibility?

A: I think that in about the last five years or so major companies in Thailand, particularly in the banking sector or large organisations, have embarked on these concepts quite seriously. But it's still not widespread. I think the encouraging thing is that there are more and more people talking about them. Unfortunately, in Thailand some large organisations still do not pay much attention to these two concepts. They have all the resources but they lack a sense of responsibility to society.

It is very important that we set up networking systems to promote these concepts. First of all, it is more effective to have a larger groups of people working together. Secondly, each unit has its own separate clientele. I am encouraged by this trend, but I wish the large companies in Thailand would pay more attention to both good corporate governance and corporate social responsibility as the big money is just not there.

It is important that the entire board is committed to these concepts. This is not just a management gimmick, and it's not a public-relations gimmick. For example, at Siam Commercial Bank, which I am involved with, we separate the corporate social responsibility budget from the public-relations budget. This is very important as corporate social responsibility and public relations are not the same.

Q: Could you elaborate more on why corporate social responsibility and PR have separate budgets?

A: Because public relations is to promote your brand, to promote your product and to promote your image. Corporate social responsibility is much deeper than that. Corporate social responsibility is not to take, it is to give.

I am not saying that public relations is a bad thing, but when you engage in public-relations exercises there is something that you want. You may want a better institutional image, better understanding of the clientele, promotion of your brand or you may want to promote your sales.

But corporate social responsibility is not to take. It comes up from your own conscience of having come this far, having done very well in terms of turnover, in terms of profitability, so that you want to give back to society.

We have to look beyond business activity. We have to look beyond the bottom line. We have to look beyond the valuation of the company on the stock exchange.

We have to ask ourselves: ''What can we do for society?''

Kriengsak Niratpattanasai provides Executive Coaching in leadership and diversity management under the brand TheCoach. He can be reached at coachkriengsak