July 01 2005
by Briefing StaffMark Felt, newly revealed as Watergate's 'deep throat', famously advised Woodward and Bernstein to "follow the money" in their search for the truth. That's not a bad motto for CSR either. As companies are first and foremost economic instruments, any examination of social responsibility should start by asking the question: who gets the money?
Yet the one thing virtually every CSR report fails to address in any meaningful way is remuneration: facts about pay differentials, low pay compared to actual cost of living, eligibility for fringe benefits, who gets stock options and ultimately the share of profits that accrue to employees compared to investors. This is all the more surprising given the reputational risks involved, with newspapers daily full of lurid headlines about fat cats, outsourcing and off-shoring to low wage countries, redundancy announcements triggering share price rises and the like.
Of course it takes a very brave CSR manager to tell senior executives their pay packets are going to be examined in the CSR report - not just the details that appear in the annual report small print but contrasted with employees and subjected to stakeholder feedback. Ouch.
Still, as we report above, the facts about earning and bonuses are out there in the public domain and the picture the numbers reveal may not be too bad. Compared to directors, £4,000 for a Tesco checkout worker or £1,000 for a postal worker may not look much, but as a percentage of basic pay it starts to look much better. And pay differentials are endemic in society: just compare what we pay nurses who save our lives with accountants who save us tax. Following the money won't provide all the answers but it can start the debate.