If you are a corporate citizenship professional it is not hard to feel that corporate citizenship has really come into its own in the past decade. Corporate citizenship seems to have passed the “stress test” as companies continue to embrace corporate citizenship despite the worst economic crisis in 50 years.
Our 2009 State of Corporate Citizenship survey last fall showed most American C-suite executives now realize the business value of corporate citizenship and are actively working to integrate corporate citizenship policies into their companies’ business strategy and practices. There is a rapidly growing corporate citizenship consultancy and ranking industry, which seems to further confirm that corporate citizenship is now material to business and not simply a “do-gooding sideshow” as the Economist once characterized it.
Given all this activity it is easy to lose sight of the bigger questions: Is all this activity adding up to anything meaningful? Are we really driving a fundamental transformation in the way business impacts society? Is business really stepping up its contribution to helping solve the immense social and environmental challenges now facing us? Are we measuring progress in inches when we need to be making progress in miles?
While we can point to any number of individual success stories, the truth is that while we may be winning some battles, we appear to be losing the war. Tracking by GlobeScan and other public opinion firms shows a continued widening gap between public expectations and business performance in corporate citizenship over the past decade, while the scale of social and environmental challenges we face continues to grow.
What will it take to close this gap and truly make corporate citizenship a fundamental driver for business strategy and practice? At the Boston College Center’s annual International Corporate Citizenship Conference next week, this question will be the focus of the breakout session The Corporate Citizenship Journey: What Have We Learned, What’s Next? We encourage you to bring your ideas to this session and consider some challenges I think we need to address.
Risk management >Business innovation
The focus of corporate citizenship as a business driver still centers on risk and issues management for most companies. The challenge for corporate citizenship leaders now is to help their companies understand and use corporate citizenship as an innovation driver for the core business. This is the key to driving real transformation of business’ impact on society as mainstream companies such as Wal-Mart and GE demonstrate with their integration of sustainability into their core business strategies. To meet this challenge, corporate citizenship leaders will need new ways of thinking and new competencies. The difficulty of meeting this challenge is not to be underestimated. In a survey of investors we did last year with McKinsey & Company, investor relation executives and corporate citizenship leaders (How Virtue Creates Value for Business and Society), it was corporate citizenship leaders who had the least appreciation and most difficulty in articulating the business value of corporate citizenship.
Philanthropy >Shared value social partnerships
While there are many innovative examples of business/community partnerships, most companies still equate social issue engagement with philanthropy and volunteering. This is grossly insufficient if business is to truly contribute to solving the systemic social and environmental challenges we now face. We need a new model for corporate engagement that involves and mobilizes the full spectrum of intellectual, financial and human capital resources of companies in addressing these challenges in ways that create value for society and the company. Again, for community involvement leaders this will require new levels of influence and capability. It will require leaders who are connected across the business, and can design full-spectrum social initiatives for the company that align with the company’s strengths as a company and strategic interests as a business. It will require leaders who understand public policy and know how to engage their government affairs colleagues in lobbying for public policy innovations that can support the programmatic initiatives the company is working for, while increasing trust and respect for the company among legislators.
Corporate citizenship reporting>Corporate citizenship performance management
Much of what passes for corporate citizenship measurement and reporting today has little in common with the performance management systems and metrics that are driving the business. Companies can learn to play the CSR ranking game by tweaking reports without any real learning or continuous improvement going on within the company. The truism that “you can’t manage what you can’t measure” is as applicable to corporate citizenship as any other part of the business. For corporate citizenship leaders to make corporate citizenship relevant at the line level, they must be able to connect corporate citizenship to the real drivers of the business and an ability to integrate measurable corporate citizenship metrics and targets into the performance management systems that define and reward business success.
Reactive>Proactive
Underneath all the challenges facing the corporate citizenship field going forward is the need for greater leadership both at the C suite and corporate citizenship leadership level. Without this leadership corporate citizenship cannot realize its true potential. It is striking that among all the various public opinion poll surveys done these days, almost no large company in America stands out for its leadership in corporate citizenship in the public’s mind with the highest-ranking companies identified by no more than 6 percent of Americans. There is clearly both an unfilled demand and opportunity for leadership in corporate citizenship that has the potential to reward those who seize it.
Submission by By Chris Pinney, Director of Research and Policy, Boston College Center for Corporate Citizenship
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