A couple of weeks ago I attended the Economist’s Corporate Citizenship Conference in New York City. The discussion focused on the role of business in our society and the opportunity to do well by doing good. There was much discussion around the different approaches companies are taking: various CSR programs, NGO partnerships, sustainable product launches, etc.
I think most would agree that there is a positive bottom-line impact to make the case for corporate responsibility, acting sustainably or whatever you choose to call it. But still many companies are hesitant to open that door. During the conference, one of the panelists said that companies need courage. That comment really resonated with me – and I think it’s true. Courage is an important trait many companies need in order to start looking at themselves with a critical eye and begin adopting strategies to become more responsible corporate citizens.
This idea holds true in several ways:
The courage to admit that your shareholders are just one of your many stakeholders
- Having recently witnessed the failure of many of our financial institutions and massive layoffs combined with big bonuses, it’s hard not to view companies as in the business of making money to pay off corporate leaders and shareholders, above all else. Somehow they have shifted towards this narrow focus of shareholder maximization, leaving all other stakeholders in the dust – employees, communities, consumers. Responsible corporate citizens are recommitting to this broader spectrum of stakeholders and addressing the interdependency among them in order to achieve more sustainable growth.
The courage to collaborate
- While companies have an important role to play in society, they are just one part of the equation. Some of the most impactful efforts are born through partnerships between companies and NGOs. One of the programs highlighted at the conference was 10,000 Women, a program supported by Goldman Sachs. Its mission is to provide 10,000 underserved women around the world with a business and management education (starting in places like Afghanistan). Goldman Sachs works with multiple academic and NGO partners throughout the world to develop curricula and help reach women in need. Goldman Sachs sees this program as more of an economic investment versus charity. They believe these women will play a critical role in building local economies and ultimately help drive future business. In the meantime, the program is empowering these women and changing their lives in extraordinary ways.
- Companies also need the courage to collaborate with their competitors. We often see companies within the same industry developing separate standards to meet their definition of sustainable practices. This can result in confusion among suppliers as they try to adhere to multiple sets of standards. Competitors need to find common ground and come together to harmonize standards and unify efforts. One example of this is the Leather Working Group which brings together competitors in the leather shoe industry, including Timberland and Nike, to agree upon one set of standards and positively impact a critical piece of their supply chain for themselves, for the industry and for social good.
Courage to be transparent and authentic
- Being responsible also means being transparent and honest with your stakeholders. This can be a scary proposition for many companies unwilling to take the risk of exposing potential skeletons in the closet. But only by being aware can companies fully understand their impact and make the changes required to act more responsibly. It’s easy to talk about the great things we are doing, but it’s much harder to share those areas that need improvement.
The courage to innovate
- Being responsible (vs. reactive) means being proactive and able to adapt to change. Some of the best examples of responsible corporate citizens are also some of the best examples of innovative companies – Method, ZipCar, Aveda, all come to mind. P&G has taken this innovation for social good and turned it into a new product line called “Future Friendly”. Launching this month, this new line consists of environmentally friendly products to address the needs of the “Sustainable Consumer”. This line will enable P&G to help the earth while driving value via a niche consumer segment.
What do you think? Do companies require courage in order to be good corporate citizens? Please share your thoughts below.
- Erica Vogelei, Account Director