According to MAALA (Business for Social Responsibility in Israel), corporate responsibility has become an increasingly integral element in Israel’s business environment.Even with war clouds hovering and profit margins of Israeli companies shrinking, the CEO’s of Israel’s biggest companies gathered last week to talk about something they consider just as critical: corporate social responsibility.

Prime Minster Ariel Sharon addressed the MAALA – Business for Social Responsibility in Israel – group conference telling them that corporate responsibility is especially necessary now as the government’s ability to provide for all the needs of its people has decreased as more of the state budget is diverted to this year’s urgent security needs.

“You can fill the gap,” Sharon encouraged the executives.

He added that the corporations’ work should not necessarily be defined as charity because “it contributes as much to those who give as to those who receive.”

Representatives of over 200 companies including some of Israel’s largest such as Globes, the First International Bank, TEVA, Cellcom, the Strauss Elite Group and others convened for the day-long event in Tel Aviv.

“The focus of this year’s conference is on the role business plays in the community in times of crisis,” said MAALA President, Talia Aharoni.

Jeffery Schwartz, CEO of the Timberland Company, a trailblazer in corporate social responsibility, traveled from the United States to address the conference, sending the message that “doing well and doing good are not separate ideas, in fact they are inseparable.”

Aharoni noted that “these are clearly challenging times – economically and politically – times that sharpen the paradox and dilemma that responsible businesses face. MAALA is working with corporate leaders in creating social investment programs that match today’s climate and best meet their business goals.”

Representatives of the “communities in crisis,” which Aharoni mentioned, criticized the government for failing to invest more in social programs. Mayor of the Israeli and Arab towns of Ma’alot-Tarchisha, Shlomo Buchbut said that “now is the time in which we need to cull all of our resources. We need to take matters in our hands and do something about [local poverty], because the government isn’t.”

He has turned to the corporate world for help. For example, RAD chairman Zohar Zisapel, who became convinced that every child must have training in and access to a computer, established a computer clubhouse for youth in Buchbut’s town. He also volunteered his own employees to train the youngsters in using the internet and other applications.

Zisapel maintains that “money is important, but it’s not enough. The main thing is to become personally involved.”

But Ma’alot and Tarchisah are just some of the few cities in trouble. Michael Strauss, chairman of the Strauss Elite Group, has in recent years been instrumental in the effort to rehabilitate Israel’s northern coastal city of Acre. Also a city with mixed Arab and Jewish population – with an additional burden of a large number of new immigrants – Acre suffers from spiking unemployment and sagging salaries. Strauss has endeavored to draft a five-year plan for the city to get it back on a positive fiscal track, and is working with municipality authorities, from the mayor down, to jumpstart the city economy.

Education remains a priority for the corporate community as uncovering the next genius could potentially aid the corporation as much as it does a community. Three years ago, Israel’s First International Bank initiated a project that aimed to get students through matriculation.
FIBI (as the bank is known) currently operates 22 centers across Israel where about 1900 students are trained annually.

Ralbag, vice president, and head of Retail and Commercial Banking said that she expects the program, which has almost trebled in size since its inception, to go past the 2000 mark this year.

MAALA claims its corporations are working on doing their part, but not only in the community. Over the past three years the corporations have pushed through Knesset legislation requiring public companies to report on their social investments. In addition, corporate responsibility has become an increasingly integral element in Israel’s business environment. Company profiles have increasingly begun include corporate social agendas to lure clients, while some companies have begun hiring community relations professionals to devise social investments.

While certainly charitable, MAALA has been using the logic of profits and not altruism to lure Israeli companies to join. Practicing corporate social responsibility is not only good for the community it is also good for the bottom line, goes the logic. A recent study conducted by the Harvard Business Review found that a direct link between happy employees and higher profit margins. It seems that employees get a boost from public works which then boost their effectiveness which increases efficiency by a solid 5%.

Schwartz, whose company allots all its employees with 40 paid hours of volunteer service, charged the representatives to begin their social responsibilty programs now. Only by building a civic society immediately, he said, can corporations reap the benefits of their hard work. And their role is increasingly important as the world looks increasingly unstable, and “is poised on the edge of war.”