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Corporate Responsibility: Three Things It Isn’t
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Corporate Responsibility: Three Things It Isn’t - Executive Leadership Articles

Corporate Responsibility: Three Things It Isn’t

Executive Leadership Articles

Corporate Responsibility: Three Things It Isn’t

CSR is Creeping into Ubiquity

It doesn’t take a lot of searching nowadays to find great stories of successful companies who have embraced their corporate social responsibility (CSR) to the benefit of their customers, employees, communities, environments, and shareholders. B Corporations certified by the B Lab organization (“the B stands for beneficial”) hold themselves to high standards of transparency, social consciousness, environmental stewardship, and employee well-being, among other values. As they thrive in their realms, the world pays attention to their diligence at the “triple bottom line,” and expectations are raised for other businesses in their fields.

Yet CSR is a big, dynamic concept with about as many different looks as there are B Corporations. One company’s emphasis on clean drinking water for the neighborhood may be completely inapplicable to another, whose big initiative might be free, high-quality, on-site childcare for employees. Companies striving to be sensitive to the needs of their stakeholders may find new, uncharted ways of expressing social responsibility. They (and we, as their competitors, clientele, and critics) would be well advised to keep in mind a few things that CSR is NOT.

CSR is not charity; it is practiced for the best interest of all stakeholders, including the company’s own viability.

Andrew W. Savitz and Karl Weber remind us in their updated edition of The Triple Bottom Line: How Today’s Best-Run Companies are Achieving Economic, Social, and Environmental Success—and How You Can Too (Jossey-Bass, 2014) that a company’s goal is its own success. When that success is defined beyond mere financial profitability, it serves all three parts of the triple bottom line: people, profit, and the planet. Charity has its place, but it is about giving something up for the well-being of someone in need. CSR is about working in service to all stakeholders so that everyone benefits. In other words, when CSR works, companies practice it because it’s good for them.

CSR is not a merit/demerit system; it is an established culture and system in the company’s makeup.

An article in Time* summarizes the research of Elaine Wong of the UC-Riverside School of Business Administration and Margaret Ormiston of the London Business School, which reveals that firms that are focused on pursuing a socially responsible agenda are more likely than other businesses to behave in a socially IRRESPONSIBLE ways later. And companies whose bosses are inclined to talk about their CSR are even more likely to engage in socially irresponsible corporate behavior. Gary Belsky, who wrote the Time article, offers the grand, socially conscious gestures of companies like Enron and British Petroleum before greater irresponsibility led to enormous, far-reaching crises. Wong and Ormistron say that for every five acts of corporate responsibility, we can predict one act of corporate irresponsibility. Whether we’re looking at companies resting on laurels or accepting some kind of social permission to look the other way on some things because of their good acts on other things, no well-meaning company can find that five-to-one ratio acceptable. Rather, it should maintain CSR as a top priority and remain vigilant against complacency or self-satisfaction.

CSR is not something the big boys do; it is something companies of all sizes should strive for.

The big companies get the big media attention, and they are more likely to practice CSR on a grand scale with enormous reach. This does not mean that smaller companies are absolved of CSR in whatever way they might pursue it. Most (if not all) of the motivations for big corporations to pay attention to social and environmental concerns apply as well to smaller companies: employee well-being leads to improved morale in a company of any size, for example. Yet there are some motivations that apply even more directly to smaller companies, such as improved relationships with communities. A Forbes article by N. Craig Smith** reminds us that small companies are likely to be managed by their owners, who are also likely to be founders. When a smaller company practices social responsibility, there can be greater investment by company leadership, since the committed manager will be more likely to get owner and founder on board, which is to say that the manager committed to CSR faces less pushback from other company executives. Smith adds that for smaller companies, healthy personal internal relationships and external relationships can make all the difference in a company’s success.

As your company searches for its own identity, keep in mind that the possibilities are endless, that a company of any size can reach out to all stakeholders, and that every good act is not a karma point to be saved toward some future misdeed, but it is a springboard toward the next good act, which offers more possibilities for future good acts.

 

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Corporate Responsibility: Three Things It Isn’t - Executive Leadership Articles

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