Ithmaar Chairman urges better governance participation in global social issues

This, he said, would not sacrifice profitability but improve it in the long term.

Ithmaar Bank Chairman Khalid Abdulla-Janahi made his remarks during a Plenary Session
chaired by World Economic Forum Founder and Executive Chairman Klaus Schwab during the two-day meeting that was hosted in Tianjin, China from 27to 28 September.

Also participating in the Session were PricewaterhouseCoopers International (USA), Chief Executive Officer, Samuel A. DiPiazza Jr. (who also served as a Mentor), Lenovo (China), Chairman of the Board Yang Yuanqing, Unison Capital (Japan) Partner and Representative Director, Nobuyoshi John Ehara and Sinosteel Corporation (China), President Huang Tianwen.

Other Mentors at the Forum included Citigroup ,Senior Vice Chairman and Citibank NA Chairman President and Chief Executive Officer William R. Rhodes, Ernst and Young Chairman and CEO James S. Turley and Deloitte, Global Chief Executive Officer James H. Quigley.

Janahi,said:

"Philanthropy is part of our culture in the Middle East. In fact, it comes within the strict definitions of Zakat, the fourth pillar of Islam. During the past 15 years however, companies in countries like ours are now going global - and they also need to think of global matters."

Janahi stressed that an important precondition to going global is ensuring proper corporate governance and urged organizations to impose adequate self assessment measures from within before they start considering issues from a global prospective.

"This calls for a change in mindset and that is not easy. Shareholders need to understand that they are not the only stakeholders, that the stakeholders are the people around you the social fabric that surrounds you in every place you are going to work and that you need to think of issues that affect everybody. You need to get involved in this social fabric. You don't need to sacrifice your profitability to do so - in fact, you become much more profitable that way," he added.

That, in choosing the issues in which to engage, companies should consider their operations and corporate objectives and how what they might do aligns with their core business strategy. "There may be certain investments for which you won't see a return immediately. you cannot do things by textbook; you have to believe in them," said Janahi.

He also noted that CEOs play a pivotal role in driving corporate social engagement. His remarks were echoed by the other panellists.

DiPiazza,said:

"People always look towards their leader. The CEO has to define the strategy and culture of the business. If the CEO is just about numbers and profits,I don't think the business will be sustainable in the long term."

Janahi also stressed that, with what he described as "the current economic deterioration," organizations must live up to challenge. "We all have responsibilities whether big or small and we need to live up to them," he said.

Schwab said, "Instability in the markets and the financial turmoil of recent weeks should not deter companies from continuing their engagement in society. When we face a crisis, corporate social responsibility and corporate global citizenship should not be put on the back burner."

"As a global company, you are a global citizen who does not only have rights or the license to operate on a global scale but also duties. We have a global space that has to be administered and global challenges that cannot be solved by government or business or NGOs alone. Companies have to engage in public-private partnerships together with government and civil society to engage in those social issues," he added.

Business leaders on the panel agreed. "If you want to be a global company, a company that is built to last, not only should you consider how to contribute to your shareholder but you also have to consider how to contribute to society," said Yang Yuanqing. "It is important not just for a company's short-term success but for the long term."

Ehara said, "When we become principal shareholders, we try to instil the notion in management that corporate global citizenship or corporate social responsibility is a very significant agenda for us."

"We should not just focus on profits but on long-term value. This can be established very quickly if the company is very efficient with an action plan. They could establish a reputation in a matter of only a few years," he added.