Social responsibility — who’s responsible?


I WAS invited to a seminar about social responsibility in Saudi Arabia, sponsored by a major Saudi bank. In attendance, there were a number of business editors in Saudi media. The program started with a presentation of social projects and initiatives sponsored by the bank. They included training, education and jobs for orphans and girls, in addition to support for disabled children.

During the questions and answers time, journalists were demanding more of banks —much more! They regarded the said programs as “too little, too late.” Some went even further calling for the government to tax banks and companies for charity works. The bank’s representatives were in the defensive mode, showing how much they spend for these projects (hundred of millions), the benefits they achieve for the target public, and the recognition they receive from the concerned government departments. Still, the media were not convinced, demanding more responsibility from the “fat cats that earn billions in profit and give back mere millions!”

In my speech, I told them that businesses owe us nothing. Banks and companies’ are owned by people like us. Boards are elected by the shareholders to serve their interests. The main task of management is to make maximum profits on shares and bring them back to owners.

In free markets, like ours, companies’ responsibility toward society is to provide good jobs and products. Their duty to government is to pay due taxes and abide by its laws. They help the nation prosper, advance and compete in world markets. With applied research they lead the development in science and technology. Their training centers help improve the education and experience of their employees and increase their productivity. And, of course, their success is reflected on the success of the nation and prosperity of their stakeholders (owners and employees).

Banks and companies are not charity organizations, except for the zakat they pay to the government, which in turn is passed on to the needy. Still, businesses might improve their reputation by providing good services to society. By playing the responsible neighbor, they support local schools, clinics and civic centers. As an outstanding corporate citizen, they may sponsor educational and training programs, arts and culture events, youth and women initiatives, and support charity organizations. Such Public Relations help in improving the corporate image and winning customers’ trust, and state cooperation. Therefore, it is a win-win formula, most shareholders would accept.

Many businesses already do that. Corporations like ARAMCO, Al-Ahli Bank, Saudi Research and Marketing Group, and SAVOLA are award-winners for their social responsibility programs. Other privately and family owned companies, like Al-Rajhi, Abdulatif Jameel, Fakeeh, Albaik, SEDCO and Nesma are doing even more. That’s because those families own their businesses and don’t need the approval of general assemblies to give some of their fortunes away. Sheikh Sulaiman Al-Rajhi alone has given every riyal he owns (more than 40 billions) to charity. His endowment (waqf) includes his shares in Al-Rajhi bank as well as all other companies, farms and real estate. He and other volunteers run the endowment as non-profit organization. They managed to expand and double its value in recent years.

Teach me how to fish, instead of giving me a fish everyday. Social responsibility is not about giving cash and food to the poor. There are organizations and individuals who do that. Saleh Kamel, Mohammad Abdulatif Jameel, Abdullah Bugshan and Abdullah Bahamdan, among many others, are providing scholarships for excellent students from disadvantaged families. Sulaiman Al-Rajhi built a whole university for girls in his hometown in Qasim. What we need more is to help the underprivileged to learn, train and work.

We also need banks for the poor. Commercial banks do not lend small loans for small or risky projects. Bab Rizq Jameel, part of Abdulatif Jameel’s social responsibility programs does that. In addition, they provide education, training and enable young men and women to find jobs in Saudi Arabia, Egypt and Morocco by connecting them with existing job opportunities.

However, it is not enough. We need a non-profit state-sponsored bank to help less educated people, productive families, and young eentrepreneurs enter the market. We also need supportive legislations, cooperatives, advisory centers, reduced-rent shops, and similar initiatives to give them needed dose of support and head start.

Social responsibility, ladies and gentlemen, as planned in Saudi Vision2030, is for all, in the public as well as private sectors. In fact, it is for each and every one of us. We are all responsible and required to give what we could to our nation and society. Let’s talk next about the virtues of volunteering —another form of social responsibility.

Dr. Khaled M. Batarfi is a Saudi writer based in Jeddah. He can be reached at Follow him at Twitter:@kbatarfi