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Board of directors (BoDs) of companies must not approve Corporate Social Responsibility (CSR) budget beyond the financial capacity of their organisations in a bid to support the fight against COVID-19, Dr Abraham Ansong, the Head, Department of Management at the School of Business, University of Cape Coast (UCC), has advised.
He explained that though CSR was an important function of corporate bodies, it was not their core business, and thus spending on it must not affect their financial stability in this period of COVID-19.
“Companies should avoid spending greater part of their budget on CSR when they don’t have funds to promote their core activities,” he stated during the UCC fifth e-seminar held in Cape Coast on Wednesday.
The programme which had the topic, ‘Coronavirus pandemic and CSR strategies’, was organised by the UCC School of Business and chaired by the Provost of College of Humanities and Legal Studies, Professor Francis Eric Amuquandoh.
Dr Ansong explained that spending on employees and close communities by companies was an important thing for companies to do, especially in this era of the Coronavirus pandemic.
Dr Ansong, however, cautioned that organisations must be moderate on their spending on CSR and that CSR activities must be properly targeted to achieve the intended purpose.
CSR programmes, he said should not be “merely about showmanship and pressure of companies to spend part of their budget,” but well thought-out programmes to benefit the society.
A lecturer at the Department of Accounting of the University of Professional Studies, Accra (UPSA), Sharon Donnir said CSR programmes must be properly budgeted for and approved by the BoDs.
She said CSR should be done with the long term goals of the organisation, adding that, ” While CSR is good gesture during this pandemic era, there should be a responsible limit since CSR is not the core activities of companies.”
The Executive Director of Institute of Directors-Ghana, Mr Frederick Aryeetey, explained CSR should not be seen to be an activity for only big companies, but micro, small and medium-scale enterprises and informal sector businesses should all play their part.
He explained that the essence of CSR during the pandemic was for businesses to use a portion of their income to support their stakeholders, and entreated companies hardest hit by the Coronavirus pandemic not to lay off their staff, but rather reduce their salaries.
Mr Aryeetey appealed to companies who have enough buffers to increase their CSR budgets, adding stressing that “taking good care of employees in various ways during this pandemic is a good spirit of CSR”.
Prof Amuquandoh said CRS had become crucial especially at the time when communities and employees had become vulnerable due to the Coronavirus outbreak, adding that, “Coronavirus is now a daily word with many thoughts about what to do and how to do what is appropriate.”
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