Reaching Out to the Stakeholders to Promote Good Corporate & Social Governance

1. Reaching Out to the Stakeholders to Promote Good Corporate & Social Governance Erna Witoelar UN Special Ambassador for the Millennium Development Goals in Asia and the Pacific *

2. Role of Private Sector inDevelopment • Development challenges are growing and evolving with globalization and regionalization; also with decentralization in some countries. • The role of private sector as a development actor has increased significantly, from merely producing/ selling goods & services, to: • be responsible of creating more jobs/employment, • promoting technology & inventions, • protecting the environment, • improving public’s welfare, • galvanizing social cohesion, • advocating for policy changes, etc.

3. Stakeholders: beyond Shareholders • Hence the concept of stakeholders is also evolving, now including not only shareholders / investors, the management, workers, suppliers or buyers; • With decentralization, regionalization & globalization stakeholders exist at the: • local level: local communities, local authorities, and local civil society organizations (CSOs), local media • national level: public at large, national policy makers & politicians, CSOs & mass media • regional/global levels: regional/global public & authorities • Together - directly or indirectly - they determine business sustainability and its long term economy. In return, they are also being influenced by the companies’ behavior.

4. Good Corporate & Social Governance • Adopting Good Governance should not be seen only as a reaction to stakeholders’ “pressures” for the corporate to change, but should be seen as imperative to sustain the growth of shareholders, business, and the economy • Corporate governance is required to rule the relationships among all: • to ensure fairness, accountability and transparency, • to serve sustainable growth of the company, • in accordance with the overall economic objectives • Social governance is required to ensure that social costs & benefits of the companies are internalized and fairly distributed among the stakeholders.

5. Reaching Out to the Stakeholders:More Can Be Done • Nowadays, many associations/forums & chambers of commerce take concerted actions to promote & adopt corporate governance through concrete CSR or Corporate Citizenships policies & programs. • But more concrete actions can still be done, involving or collaborating with the stakeholders, i.e. in the core activity, social and philanthropic investments, or policy advocacy. • The Millennium Development Goals (MDGs) is an increasingly accepted platform, widely endorsed by global companies & their stakeholders. The MDGs encourage synergies in promoting good corporate and social governance.

6. The Millennium Development Goals: • Eradicate extreme poverty and hunger • Achieve universal primary education • Promote gender equality & empower women • Reduce child mortality • Improve maternal health • Combat HIV/AIDS, malaria & other diseases • Ensure environmental sustainability • Develop a global partnership for development MDGs is an inter-linked “development compact” by all UN (incl. ASEAN) member countries that tell actions required both by: - developing countries (Goals 1-7)  Pro-Poor Policies & - developed countries (Goal 8)  Pro-Development Policies

7. Diversity of ASEAN Countries The region consist of countries with diverse characteristics and levels of human development related to achievements of the MDGs: • Developed and high income: Singapore, Brunei. • Highly Progressing in Human Development: Malaysia, Thailand. • Moderately Progressing: Philippines, Vietnam, Indonesia. • Slowly Progressing: Cambodia, Myanmar, Lao PDR  These characteristics offer great opportunities for a regional solidarity to enhance MDGs achievements,  Disparities within a country also need a national solidarity.

8. ASEAN CHARTER as the contextforGood Corporate & Social Governance • Maintaining a realistic balance and harmony in ASEAN, recognizing it’s diversity in many aspects; • Enabling ASEAN to stay relevant in present development challenges that are evolving, which include good governance, peace & human rights • Enabling ASEAN members to build solidarity and partnerships to narrow development gaps and achieve the Millennium Development Goals • Strengthening ASEAN’s competitiveness through regional economic integrationshould be balanced with good corporate and social governance

9. Global Corporate Movements towards achievements of MDGs • Recognition of the broadening roles of the private sector in promoting development and achieving the MDGs, have come from many places: • UNDP, World Bank, ADB, UNESCAP and others have now special initiatives to work in partnerships with the private sector on achieving MDGs. • During the UN Millennium Summit 2005, there was in fact a parallel meeting between companies and the multilateral agencies discussing the roles and roadmap of business contribution towards the MDGs. • Increasing numbers of company and business networks are aware of and embracing the MDGs, incl. mainstreaming the Goals in their CSR policies

10. MDGs are Important for Business • Individual MDGs have been the CSR’s challenges for some decades. Now, they are gaining a new thrust from global / national momentum of solidarity: new opportunities, new approaches, new partners. • Whilst governments carry primary responsibilities for achieving them, it is increasingly in the interests of business to be part of the solution. • The MDGs is parallel to the objectives of Corporate Governance and Social Governance. In fact, the Goals give measurable, quantified targets and indicators for measuring the implementation of Good Governance.

11. Reasons Why Business Should Contribute to Achievements of MDGs Investing in Sound Business Environment: Any entities must prefer to operate in a stable and secure communities, healthy & competent workforce and prosperous consumers and investors. Also in an environment of open, rule-based, predictable and non-discriminatory systems and a non-corrupt and well-governed economy. Harnessing new business opportunities: Developing new products, services & innovations, or embrace economic of scales, & other embedded oppor- tunities & competitiveness. Managing Direct Costs and Risks: Environmental degradation, global climate change, ethnic conflict, and inadequate health and education systems, for examples, can add directly to the costs and risks of doing business. Adapted from: Nelson, J and David Prescott (2003) Business and the MDGs: A Framework for Action. IBLF & UNDP. London

12. Business’ Influence in Efforts Towards Achievements of MDGs Core Activity – The business of business must also be to ensure long term development and sustainability, in combining resources to produce value addedefficiently and abide the norms and standards for public’s welfare. Social & PhilanthropicInvestments – Use of its resources incl.profits, expertise, and its influence to advance and support social agenda that havelong term impact to business and societyat large. Policy Advocacy– contribute to societal change by influencing development policy process, promote enabling environment for further development with better equalities. Adapted from: : Nelson, J (1996) Business Partners in Development. IBLF. London

13. Reaching Out to the Stakeholders:Making MDGs Our Business • Enhanceexisting Good Corporate and Social Governance work:  empower and build dignity of the poor  from short term projects to longer term programs  from working alone to work in partnerships • Widen existing GC & SG work on one sector (health, education, environment, etc.) to achieve advances in multiple MDGs across sectors. • Focusthe work on a certain region/area, build partnerships with others to develop a holistic approach, to make a significant impact.

14. Conclusion There are many opportunities for companies to enhance their corporate and social governance by reaching out and involving their stakeholders MDGs is widely accepted as common objectives of development not only by governments, CSOs & media, private sector itself and their stakeholders, which can be used as common platform to generate concerted actions to achieve the Goals We are the first generation that have a real opportunity to actually see poverty eradicated, and we should refuse to miss this opportunity.

15. THANK YOU *) Presented at Seminar on Good Corporate and Social Governance in Promoting ASEAN’s Regional Integration, January 17, 2007; ASEAN Secretariat, Jakarta, Indonesia