Walking the Second Mile before the First: A Corporate Social Responsibility Conundrum?

Abstract

Walking the first mile is mandatory, doing what is required, fulfilling what the law and regulation demand from corporate governance. The second mile is optional and voluntary. The laws of physics dictate that the first mile has to be walked before a second one can be attempted. However, corporate social responsibility (CSR) approaches and strategies appear not only to allow but also to extol the virtues of walking the second mile before completing the first, the assumption being that a second mile can help lift the corporate image even where the first mile of good corporate governance has not been walked. Banks and financial institutions spend millions of pounds promoting financial literacy education as part of CSR in order to address perceived low standards of financial education among the public. The expectation seems to be to generate a consumer-friendly banking image that helps to shift the public focus from irresponsible bankers to irresponsible consumers. However, as the second mile of CSR has often not been preceded by the first mile of good corporate governance, the image of banking has persisted as one of irresponsibility, fraud and malfeasance. How should banking companies go about developing corporate plans for CSR? If good CSR is to truly become the extra second mile walked by companies to promote social welfare, the mile of good corporate governance has to be walked first. Two simple suggestions are proposed. It is submitted that these proposals, if implemented, would be effective in promoting the corporate image of financial institutions as well the financial literacy levels of the general public, thereby achieving the aims of both good corporate governance and good corporate responsibility.