The role of corporate social responsibility in the financial crisis

In order to understand this new economic environment we need first to look at the context and some of the facts. Firstly society has lost a lot of faith with two important institutions, politics and business. There is a lack of trust in both. The UK political scene has been hit by several scandals involving poor ethical behaviour such as false and fraudulent expenses claims by members of the UK parliament. This has created distrust in politicians according to many surveys and polls such as for the BBC which found 80% of voters did not trust politicians to tell the truth (BBC News 24, 18 March 2010). This distrust arguably created political ambiguity and the country and contributed to the first ‘hung parliament’ in the United Kingdom for many years with no overall majority for one party in the 2010 general election. This subsequently resulted in the first coalition government since 1945 between the Liberal Democrats and the Conservatives (UK General Election, 6 May 2010). In the United States, Barak Obama in an attempt to differentiate himself from the cosy business-Bush presidential era developed a presidential campaign message about ‘restoring trust’. Arguably companies need to do the same as we enter the second decade of the second millennium. According to the 11th annual Edelman Trust Barometer (2010) we have seen trust figures plummet with two-thirds of the study's public trusting companies less than a year ago. Furthermore in the context of organisations' responsibility, just 38% trust business to do what is right, which is down 20% from just the previous year. Perhaps most disturbing of all for corporations only 17% trust the information coming from a company's CEO (chief executive officer). For companies that is a terrifying statistic. In previous eras rolling out the organisational head was a sure fire way of getting media coverage as well as influencing key stakeholders such as institutional investors and also in building and developing credibility. This was achieved because organisational stakeholders when listening to corporate messages heard it ‘from the horse's mouth’, the CEO. Now these individuals are tarnished with the labels of greed, excessive pay and the abuse of managerial power.