What was once a line in a company’s mission statement is now becoming an integral part of corporations’ business strategies. As companies like BP and Lehman Brothers becomes more and more entangled in the general condition of our society, social responsibility is becoming a part of business that cannot be nicely summarized on a page of a website. It must be action.
Last month was the annual meeting of the Clinton Global Initiative, a forum created by former President Bill Clinton for influential world leaders in the private and public sectors to discuss how to turn ideas into action to solve some of the world’s most pressing issues. One topic Clinton discussed was the trend in corporate philanthropy and involvement in humanitarian efforts such as the forum. It has become about more than just writing checks, it’s about investing in causes that could produce millions of dollars worth of improvement.
“Standard Chartered Chief Executive Peter Sands said actual donations of money were important but that companies could achieve greater good by shaping their business and investments to have a positive impact.” (from Reuters)
The challenge with any social efforts is justifying the investment and it’s effect on the bottom line. At the core of capitalism is profit. It’s undeniable. So any good executive must ask – will this actually improve the success of my company? In a word, yes. According to a new report published by McKinsey & Co, the following is a number of ways that social responsibility can be quantitatively valued in terms of overall business effect:
- The most widely known way that environmental, social, and governance programs create value is by enhancing the reputations of companies—their stakeholders’ attitudes about their tangible actions.
- Financially valuable objectives—such as better regulatory settlements, price premiums, increased sales, a reduced risk of boycotts, and higher retention of talent—may depend, at least in part, on a company’s reputation for environmental, social, and governance programs that meet community needs and go beyond regulatory requirements or industry norms.
- Growth in markets, products, customers, market share, and innovation
- Return on Capital from operational and workforce efficiency.
- Risk management through regulation and public support.
- Management quality in leadership development, adaptability, and long-term strategic views.
The study goes on to site case studies in each value-added area.
So how does your organization – and you, as a leader – view and emulate social responsibility for your employees and clients? Old National Bank, who won the 2010 Corporate Engagement Award, outlines a well-rounded plan for CSR.
- Have visible and genuine leadership from the CEO, with support from the board of directors as well
- Use your CSR program to enhance your company’s brand. Old National prides itself on being a community bank and engages in philanthropy and service to further emphasize and support its commitment to community
- Establish a CSR program that will strengthen neighborhoods where your company’s employees and customers live and work (and sometimes, for global companies, where you are investing to develop future customers–such as in developing countries)
- Integrate philanthropy, volunteerism, and nonprofit board service for the greatest impact, and also to develop your employees and to enhance their experience with your company
- Integrate community service as part of your business strategy in human resources, public relations, client relationships, and so on
- Establish meaningful partnerships with nonprofits that are effective in strengthening the communities where your company has a presence
- Measure and report on the impact of your CSR program as you go
At Paragon Leadership, social responsibility is built into the business plan and the hearts of all of our employees. We love nothing more than partnering with our clients to support important causes in our communities. From TeamKAL projects to a call to action to support a co-worker’s organization, we want everyday to be about more than business, but about using our business as a powerful tool to support the causes that really matter.