Setting the standard: Leading through philanthropy

Corporate social responsibility has become a major focus in Myanmar, particularly as civil society, human rights organizations, and foreign governments have called for a new and transparent way of doing business in a country that has been closely associated with corruption and exploitative practices.

The former President Thein Seinʼs government urged, and in some cases required, investors to allocate a percentage of profits to CSR projects, an initiative almost certainly to be continued by the new National League for Democracy government.

Local companies have been encouraged to undertake CSR efforts as well, going beyond traditional philanthropic efforts. In fact, Myanmar is a global leader in philanthropy, designated as the worldʼs most charitable country for the second year in a row in the “World Giving Index.”

Despite its charitable side, the broader aspects of CSR programs are relatively new to the country. The Myanmar Centre for Responsible Business has been tracking domestic companies on a variety of indices that measure corporate compliance with globally accepted CSR standards.

According to the MCRBʼs 2015 Transparency in Myanmar Enterprises/Pwint Thit Sa report — intended to encourage increased transparency by Myanmar businesses — local corporations have slowly begun to adhere to international standards, including by publishing company websites, implementing corporate governance policies, and promoting sustainability.

The leading companies such as Serge Pun & Associates Group, KBZ and Max Myanmar Group of Companies. Other well-known companies have also published websites with corporate policies, including ethics and human rights policies, and commitments to philanthropy through their respective foundations. In addition to the foregoing, City Mart Holding Co. Ltd, Asia World Group of Companies, Htoo Group of Companies, Dagon Group of Companies all have dedicated CSR projects.

Since easing sanctions in 2012, the U.S. government has consistently encouraged its businesses to invest responsibly. For example, it requires companies investing more than $500,000 to submit Reporting Requirements on Responsible Investment in Burma, which include questions on CSR programs, land acquisition, and environmental and social impact assessments.

Since the opening of Myanmar, U.S. companies have contributed to a variety of CSR projects, including Procter & Gambleʼs provision of $2 million to provide clean drinking water, promote better hygiene behaviors, and build capacity to deliver imported health services; Coca-Cola Foundationʼs implementation of a three-year program to empower nearly 25,000 women, focusing on financial literacy, entrepreneurship and business management, and General Electric Foundationʼs $7 million commitment to support broad training and capacity-building efforts to strengthen health care, energy infrastructure, leadership development, and rule-of-law.

Myanmar is at an interesting nexus in its development. A fresh round of outside investment is likely, especially after the successful Nov. 8 election, bringing in new projects and prospective joint ventures.

This will provide more opportunities to set the standard of corporate leadership in Myanmar by harnessing the “gold standards” of business engagement along with the scale and experience of foreign investorsʼ philanthropic endeavors and coupling them with the instilled Myanmar charitable values and local knowledge of needs and concerns of domestic players.

To be leaders, both local and foreign companies must consider specific factors in order to have successful CSR and philanthropic projects. Businesses must engage all stakeholders, including relevant government officials, political leaders, ethnic nationalities, civil society, and NGO groups.

Particularly important in the context of the countryʼs ongoing national reconciliation efforts is outreach to ensure a companyʼs vision and an impacted communityʼs expectations are matched and development initiatives are coordinated. So often, impacted groups are not consulted, and growing activism and widespread complaints have threatened to derail investments.

In a similar vein, companies must ensure that CSR projects fit the companyʼs business and the real needs of the impacted community. CSR projects should complement a companyʼs work and reflect experience in implementing such programs.

Additionally, a CSR project must be fully thought out and not executed just to check a required box or try to ensure good press. CSR projects should not supplant the Myanmar governmentʼs responsibility to its people, nor should the community be littered with empty hospitals and schools that lack the medical and school supplies needed to function.

Transparency is also essential, and CSR and philanthropic efforts can be publicly documented through Myanmarʼs growing use of social media, traditional print journals, TV and radio, or the internet. Companies can make accessible and verifiable their adherence to international standards, including financial oversight and management, and sound labor practices.

There is a real opportunity for investors to promote international standards and set a model of good corporate behavior, but also an opportunity to incorporate a sense of charity that permeates Myanmar. CSR and philanthropic efforts can take many forms, including in traditional areas of health and education, but also training and capacity building, supply chain and infrastructure improvements, expanding access to science and technology subjects, and environmental causes.

There is a full understanding that businesses must make profit to encourage market growth and bring key goods and services to the populace; however, there is a growing expectation that corporations should undertake efforts that improve society outside of for-profit services.

Demonstrating leadership in philanthropy must not be measured in the kyats (Myanmar currency) or dollars spent, but rather on the effectiveness of the programs and their ability to accomplish the mission.

EDITOR’S NOTE: This article is part of a broader piece originally featured in Crossroads, a quarterly business magazine in Myanmar.

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