Understanding Corporate Responsibility

By Susan Ennis, APR

Companies have long supported their communities in various ways, from sponsoring little league teams to encouraging executives to serve on nonprofit boards of directors.  For many, the motive has been as simple as being interwoven into the community – “giving back.”  Over time, there has been a significant shift in focus.  Corporations began to realize the benefits of utilizing community outreach programs as public relations strategies and linking sales objectives to cause marketing campaigns.

In recent years, the term “Corporate Responsibility” has emerged to reflect the importance of a unified approach to stakeholder relations.  According to Jay Whitehead, president and publisher of CRO Magazine, only two executives had the title of corporate responsibility officer in 2006.  Today, more than 650 professionals serve their companies in this role.  Whitehead expects the numbers to continue to grow. “The rate at which companies are engaging professionals specializing in Corporate Responsibility (CR) is growing at a similar pace as when companies began placing more importance in retaining Human Resource (HR) professionals.  There were only 40 HR professionals employed in North America in 1982, in contrast to the more than 250,000 professionals employed in HR today.”

Often referenced as Corporate Sustainability and Corporate Citizenship, the practice of CR focuses on four principles.  Social responsibility, which rose in importance in the 1960s and 1970s, reflects the obligation that business organizations have to benefit society at large.  Environmental sustainability, which has ballooned in importance since the onset of global warming, concentrates on the responsible use of natural resources and reducing the company’s impact upon the environment; for instance, minimizing the company’s carbon footprint or identifying marketing and production procedures that more efficiently utilize resources.  The third area of CR takes into account government risk and compliance which grew out of the Sarbanes-Oxley Act.  Corporate philanthropy, many times administered through a company foundation, rounds out the areas of responsibility that fall under the CR umbrella, which is more broadly defined as how companies manage business processes to produce a positive impact on society.

Business leaders understand the strategic importance of establishing a mutually beneficial partnership with a nonprofit organization in order to further its CR goals.  Despite the size of the company, care should be taken in forming these partnerships.  Programs should be evaluated as they relate to the company’s values and corporate culture, taking into account the value stakeholders place on social and environmental objectives.   Look closely at the nonprofit’s track record for achieving outcomes and ensure that its mission statement meshes well with the company’s values.  Above all, partners should be held accountable.

While companies that have heavily invested in Corporate Responsibility celebrate their successes, cynics abound, pitting shareholder value against being a good neighbor.  CR executives are finding that measuring the impact of their programs and sharing information through regular reporting is of critical importance.

During a break-out session at this year’s FPRA Annual Conference, Dr. Mary Ann Ferguson, Ph.D. Communications University of Florida, shared research findings on effective CR reporting.  During the presentation, Ferguson stressed the importance of transparency as companies take on an attitude of good citizenship.  The trend is to move from annual reports to Web-based reporting models that allow for ongoing updates.  Measuring and reporting can be too time consuming and expensive for small to mid-size businesses, but Ferguson recommended that the Global Reporting Initiative, which has been adopted by many large corporations, may hold some best practices that smaller businesses can adopt.

CR strategy should be carefully integrated into the brand and care should be taken to not overstate accomplishments.  Much can be learned by studying the efforts of the many companies that have established themselves as leaders in CR – Ben & Jerry’s, Patagonia and Timberland are a few standouts.  Ferguson suggested studying the efforts of the Forbes list of The 20 Most Responsible Companies.

Values-based companies recognize the competitive advantage of CR, strategically leveraging the value of the company’s philanthropy and volunteer services to benefit not only its community and employees, but also the company itself.  Business models that succeed in driving profits while making a positive impact are attractive to shareholders and customers.  As a result, more CEOs and boards of directors are adding CR to their agenda, embedding initiatives into the way they do business.

Susan Ennis,  president of EnSpire Communication Consultants, is accredited in public relations (APR) by the Universal Accreditation Board, a mark of distinction held by fewer than 10 percent of public relations professionals.  She combines more than 20 years experience in business development and marketing communications with her expertise in PR to develop and implement strategic communications plans for clients.

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