GLOBAL CORPORATE CITIZENSHIP: A NEW AGE FOR CHILE AND THE AMERICAS BRADLEY GOOGINS PhD EXECUTIVE DIRECTOR googinsb@bc.edu August 2003 THE CENTER FOR CORPORATE CITIZENSHIP AT BOSTON COLLEGE 55 LEE ROAD • CHESTNUT HILL, MA 02467 • www.bc.edu/corporatecitizenship Economic Sector “Wealth Creation” Partnerships Planning Collaboration Reciprocity Civil Society Non Profits NGO’s Advocates Academia Legislative Input Mutual Education Political Sector Home Based Implementation Evaluation Research Policy Makers State and Federal Public at Large Corporations as Good Citizens Public Relations Outreach Source: Waddock, Bodwell, Leading Corporate Citizens, Boston College High Anxiety The Economist 09/2000 Globalization and Corporations Income disparities, environmental damage, and cultural degradation are pointing the spotlight on companies Slide courtesy of BSR Kofi Annan and the UN Global Compact “…let’s choose to unite the powers of markets with the authority of universal ideals. Let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of the next generations…” Kofi Annan, UN Secretary General John Elkington -CEO of SustainAbility “The speed of globalization often means that companies are moving ahead of the ability of current governance systems to monitor and police. Companies will be expected to fill at least some of the gap.” Quote from the Novartis Health, Safety Environment Report 2000: Sustainability and the UN Global Compact “We also want to benefit society through our economic contribution, through the positive environmental and social consequences of our activities and through an open dialog with our stakeholders.” Dr. Daniel Vasella, Chairman & CEO, Novartis AG Quote from the Novartis Commitment to the UN Global Compact - July 14, 2000 What does Corporate Citizenship look like? Employees Customers Community Government Involvement Affairs Environment Legal Stakeholder Engagement – The Key CC Issues Driven by Stakeholders CC Drivers of the “New” Corporate Citizenship Government Retrenchment Globalization & The Economic Power of Business New Activism and Compliance Pressures The Rise of Civil Society New Expectations for Business The Business Case The “War for Talent” The Scope of Citizenship Governance Identity “Integrating” corporate citizenship into the company’s “Infusing” corporate citizenship into the company organizational structure Practice “Embedding” corporate citizenship into business planning and operations SM Neighbor of Choice is a strategy that links business success to corporate citizenship. It is a blueprint for developing, implementing and institutionalizing a corporate-wide community investment strategy. It provides: •ROI (for the business and community) •Positions the business as a leading corporate citizen •Builds community support for the business The Neighbor of Choice Strategy SM Vision/Mission: links community & business success Building relationships of trust (identify stakeholders) Identifying key issues, concerns, and needs •external threats & opportunities Strategic programs/responses that serve company and community needs •social investment/contributions •partnerships •volunteerism source: Boston College CCCR What is the “community?” Where employees live/concerns Internet Cyber Community Geographical Fenceline Community Employee Community Site Community The Corporation in the community Immediate neighbors Impact Community Interest Community •Operations •Influence •Exit •Entry Common interests Your goal: build community support Be an asset in the community, and the community will be an asset to you... •recruitment •retention •productivity •attraction •image •commitment Reputation Value add Employee Value add Customer Value add •regulation •risk reduction •trust LTO/ Regulatory VA The Corporation in the community •virtuous circle •investors Business Value Add Community Value add •New markets •R&D •Address problems •Do the “right thing” A Roadmap to Excellence in Corporate Community Involvement The Standards of Excellence: 7 management principles and practices for creating corporate community involvement excellence. 1. 2. 3. 4. 5. 6. 7. Leadership Issues Management Relationship Building Strategy Accountability Infrastructure Measurement The Standards of Excellence in Corporate Community Involvement STANDARD I: Leadership Senior executives demonstrate support, commitment and involvement in community involvement efforts. STANDARD II: Issues Management The company identifies and monitors issues important to its operations and reputation. STANDARD V: Accountability All levels of the organization have specific roles and responsibilities for meeting community involvement objectives. STANDARD VI: Infrastructure The company incorporates systems and policies to support, communicate and institutionalize community involvement objectives. STANDARD III: Relationship Building Company management recognizes that building and maintaining relationships of trust with the community is a critical component of company strategy and operations. STANDARD IV: Strategy The company develops a strategic plan for community programs and responses that is based on mutual issues, goals and concerns of the company and the community. STANDARD VII: Measurement The company establishes an ongoing process for evaluating community involvement strategies, activities and programs, and their impact on the company and the community. Standards of Excellence: Leadership Company leadership Recognizes strong community relationships critical to business goals Endorses and ensures community vision statement Personal example and involvement Communicates expectations Board of Directors is involved Leading Companies • SC Johnson Wax • Dayton Hudson • IBM • Merck • Shell • BP Amoco Standards of Excellence: Strategy CR strategic plan – Linked to goals of business units – Linked to identified issues – Use variety of resources to respond to community needs, issues, etc. Communications plan Leading Companies • Merck • EDS • Whirlpool • Levi Strauss • Olin • Rockwell • Diageo • IBM • London Benchmarking Group Standards of Excellence: Issue Management Company IDs and monitors issues Stakeholders IDed and defined 2-way system to ID and analyze relevant issues Early warning system Community issues factored into business plans Leading Companies • Merck • Southland/ 7-11 • IBM • Levi Strauss • Wal-Mart • Target • General Mills Standards of Excellence: Relationship Building Proactive CR-building plan All employees involved Tactics emphasize 2-way communications to foster trust and credibility Leading Companies • Bell Atlantic • Target • Wal-Mart • Merck • State Farm • Ameritech • BP Standards of Excellence: Roles and Responsibilities Clearly defined and articulated Specific CR department: – Reports to top level – Develops CR plan – Consults with operating units Impact on communities considered by departments/ units Leading Companies • FedEx • IBM •Time Warner • Steelcase • Whirlpool • Honeywell • Target • Monsanto Standards of Excellence: Supporting Systems and Policies Cross-functional teams – Plan community strategies – Assure cross-functional linkage – Foster internal communications – Secure recognition Involve all employees Company-wide communications Leading Companies • Merck • Diageo • Arch Chemical • Home Depot • Timberland • Target • NOVA Energy • Texas Instruments Standards of Excellence: Measurement Ongoing process of evaluating CR strategies, programs Indicators developed for evaluating community priorities Evaluation results used to make future decisions Leading Companies • EDS • Battelle • Diageo • IBM • Pillsbury • London Benchmarking Group • PPL Partnership Building Blocks Communication Commitment Collaboration The Stages of Business and Community Development Stage 1: Awareness Traditional involvement in low- to moderate-income communities. Driven by community relations and philanthropy for community benefit, corporate responsibility and reputation enhancement. Less integrated, informal process Stage 2: Experience Pilot initiatives or specific programs designed to produce a clearly identified business and community benefit. Includes strategic philanthropy. Corporate involvement often limited to one or two business units. Stage 3: Integration Integrated, crossfunctionally aligned with supporting organizational structures and systems. Draws on a wide variety of corporate and community resources. Clear business and community value. More integrated, formal process Why Should We Do This? Motivational Silos Societal Factors Value Drivers Compliance Drivers * Right thing to do * Social mission * Legacy in our community * Regulation * Activism * Negative press Dominant Response Dominant Response * Philanthropy * Strategic Philanthropy * Partnership Events * Resistance * Minimum Compliance * Philanthropy Intangible Drivers * Social issues influence business (education, community, economic stability, employee safety) * Build reputation and image Dominant Response * Strategic social investment * Pilot BCD projects Market Drivers * Location * Customers * Labor * Suppliers Dominant Response * Strategic social investment * BCD projects * Direct investment Strategic BCD Framework Identify Issues Business challenges Societal pressures and opportunities Community needs Identify Stakeholders Societal Market Internal and External Identify Organizational Capabilities Core business resources Core Community Relations resources Community resources Design a Business and Community Development Strategy Draw on market and societal drivers Balance risks and opportunities Include internal and external partners Improve business performance Supports sustainable community economic development Success in the 21st Century Who you are and what you stand for are becoming just as important as the quality of your products and services