The benefits of corporate social responsibility for companies have been discussed for years. So when CSR advocates were challenged in 2010, they were bored, weary, and frustrated: "Come on, how long do we have to explain this to you?"
While the challenge might have sounded repetitive, there was a new shift in the CSR discussion. Because the conversation moved from the cubicle to the board room.
Until recently, the discussion about CSR was siloed within mid-level offices for human resources, philanthropy, and public relations; the company resources involved were minimal.
Today, it's the company CEOs who are interested in CSR; they're considering the potential benefits of CSR to advance the corporate mission and strategy and showcase the brand. Consequently, CSR is eliciting significant corporate resources with a worthy impact on shareholder value.
A Historical Perspective: CSR is Siloed
In the 1980's and early 1990's, CSR was merely a term that some companies used for their newly integrated volunteerism and philanthropy programs. Support staff or middle management might note just a couple of the benefits – like "teamwork"—to appeal to their bosses for a modicum of support.
A more comprehensive list:
- a)Human Resources: Personal and professional development, recruitment and retention, fostering engagement among people from diverse backgrounds, pride in company, and teamwork
b)Marketing: Appeal to customers, company reputation, media promotion, and cause-related marketing
c)Public Relations: Relationships with businesses, community, and government, and company reputation
d)Philanthropy/Foundation: Employee pride, improve the community where employees live and work, company reputation, align with causes that are relevant and meaningful to employees and also the company's purpose/product
In this earlier iteration, these company "CSR" programs:
- •Were not integrated across human resources, marketing, public and governmental relations, philanthropy, and so on
- •Had no overall strategy with involvement from senior executives
- •Had no particular connection with the company's mission or brand
- •Had no senior executive driving the programs to maximize their value in terms of public, community, and governmental relations; media; and human resources
- •Were not assessed with serious evaluations and analysis of the benefits to the company, and the company's social impact
- •Had no meaningful leadership from the CEO, much less the board of directors
- •Were not considered with regard to shareholder value
Additionally, companies were missing out on–and continue to–a tremendous leadership development opportunity.
Engaging Executives in CSR
For two decades, a core component of my approach to CSR has included training and placing executives on nonprofit boards through a purposeful and very high quality matching process. Through board service, companies benefit by providing unique, fulfilling, experiential leadership development opportunities for their executives and professionals, while also helping to build more effective boards of nonprofits that will advance the nation's and the world's NGO/nonprofit sector.
Twenty Years Later: CSR as a Corporate Strategy
Today, for a select group of visionary and opportunistic business leaders, CSR is becoming more fully integrated into the company's core strategy. In such cases, CSR is aligned with the corporate mission and showcases the company's brand, while also providing the above-mentioned human resources and public and community relations benefits – but on steroids.
Today, the CEO is engaging her senior leadership team and her board around CSR, and the CEO and the board are articulating how their company's approach to CSR can indeed increase shareholder value in the long term.
Today, a company commitment to CSR involves auditing and, if necessary, refreshing the company's approaches to corporate ethics, board governance, leadership development, environmental conservation, community engagement and NGO/nonprofit partnerships, supply chain management, and human rights, among others. Two obvious examples include PepsiCo–"Performance with Purpose"–and Walmart.
I contend that CSR is becoming such a force, that soon, if a company does not invest in CSR, that company's board and shareholders will ask how and why the CEO and his team made such a strategic decision.
That failing to have or integrate CSR into a corporate strategy will no longer happen by default – that one way or the other, CSR will be on the board's agenda.
--By Alice Korngold
Alice Korngold consults to global corporations on CSR, trains and places corporate executives on NGO/nonprofit boards, and consults to NGO/nonprofit boards. She is the author of "Leveraging Good Will: Strengthening Nonprofits by Engaging Businesses," (Jossey-Bass, a Wiley Imprint, 2005) and blogs for Fast Company.
An Interview with Alice Korngold: Discussing a High Impact CSR Strategy
CSR: Everything you always wanted to know, but were afraid to ask...
CSR 2010, Part III: Don't Let Your Job Search Define You
CSR 2010, Part II: Emerging Career Choices in Supply Chain & Sustainability
CSR 2010, Part I: The Sudden Explosion of Commentary on Corporate Social Responsibility
CSR 2010: Lasting Impressions From a Volatile Year
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