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Performance Impact November 15, 2007. A New Kind of Corporate Social Responsibility. Fleishman-Hillard 200 N. Broadway St. Louis, MO 63102. A Little Humor …. A New Kind of Corporate Social Responsibility. Overview of Corporate Social Responsibility. CSR in the Past. “.

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performance impact november 15 2007
Performance ImpactNovember 15, 2007

A New Kind of Corporate Social Responsibility

Fleishman-Hillard

200 N. Broadway

St. Louis, MO 63102

csr in the past
CSR in the Past

There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.

–Milton Friedman, Capitalism and Freedom (1962)

what csr means today
What CSR Means Today

This obligation [of CSR] is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.

–Wikipedia

why it matters
Why It Matters
  • Growing recognition that companies can address social issues more effectively than some governments – Katrina brought this home to U.S.
  • American public is increasingly critical of big business – diminishing middle class, perception wealth flows to business elites
  • Worldwide attention to climate change – Europe leads the globe, Asia closing in, and U.S. catching up
  • Rapid growth and use of technology – alleged wrongdoing can be captured, put on YouTube, calling attention to a global audience within minutes
  • Heightened awareness from Wall Street
background
Background
  • Second annual survey set against backdrop of sweeping national political change (2006 midterm elections)
  • FH/NCL speculated consumer frustration over domestic issues (not just Iraq War) contributed to political change
  • 2007 survey:
    • Investigates Americans’ perceptions of CSR, including political party affiliation
    • Determines whether Americans expect government to play a role in realigning corporate America’s priorities
study design
Study Design
  • Partnered with National Consumers League
  • Surveyed diverse mix of U.S. adults (18+)
  • All 50 states
  • 2,078 telephone interviews; 30 minutes (avg.)
  • Sampling error = 1 – 2 percentage points (95% confidence level)
  • Conducted Q1 2007
key findings
Key Findings

In your own words, what does the phrase “corporate social responsibility” mean to you?* (Volunteered)

* Columns may not add to 100% due to multiple responses.

key findings11
Key Findings
  • Corporations should be engaged in ways that go beyond making financial contributions.
    • Corporations need to be committed to communities and, overall, to society (23 percent).
    • Corporations need to be committed to employees (17 percent).
  • For the second year in a row, corporate America receives low marks for its CSR performance.
    • The performance of corporations is better “in their own backyard” versus the nation as a whole.
key findings12
Key Findings
  • Americans believe that government should ensure the social responsibility of corporations.
    • Four out of five consumers say it is important for Congress to ensure that corporations address pressing social issues.
  • Consumers gather and communicate information about companies’ CSR from the Internet more than any other source.
    • Online sources outweigh traditional offline sources as preferred ways to learn about the CSR record of companies in consumers’ communities.
key findings13
Key Findings

Online Social Media Now Primary Source of CSR Information

What types of online resources have you used?*

*Columns may not add to 100% due to multiple responses. **Less than one-half of one percent.

treats employees well remains most important
“Treats Employees Well” Remains Most Important

Assuming that a company is operating its business in an honest and ethical manner, which one of the following is most important to you?

Nationwide (n=2,078)

Treats and pays employees well

1%

Goes beyond law to protect

3%

environment

3%

Responsive to customers' needs

9%

Contributes to community beyond

paying taxes

8%

Shares your values

38%

Ensures good profits for

9%

shareholders

Gives to charitable causes

14%

All the same/other

15%

Don't know/Refused

employee issues are important for business
Employee Issues Are Important for Business

What are your expectations of local companies’ participation in or contribution to their communities?

  • Companies should make non-financial contributions, such as volunteering time or effort (29 percent).
  • Companies should treat employees well, provide a livable wage, or provide employment (11 percent).

Non-financial contributions

Fixing problems created by company

Environmentally friendly practices

No expectations

employees should come before charities
Employees Should Come Before Charities

To what extent do you agree or disagree with the following statements:

Focus on generating business and employing more people, rather than making corporate donations to social causes.

Place employee salary and wage increases above making charitable contributions.

employee related concerns throughout findings
Employee Related Concerns Throughout Findings
  • Wages
    • Important to pay workers inside/outside U.S. a living wage (73 percent).
    • Agree salary/wage increases should be placed above charitable contributions (“strongly” or “somewhat” agree, 76 percent).
    • Among seven options, including “gives to charitable causes,” more than one-third selected “treats and pays its employees well” as most important (38 percent).
  • Jobs
    • Generate business and employ more people rather than making charitable donations (“strongly” or “somewhat” agree, 70 percent).
  • Employees vs. Environment
    • Assuming a company operates in an honest and ethical manner, it is more important for corporations to treat or pay employees well than to go beyond the law to protect the environment or give to charitable causes (38 percent versus 15 percent).
  • Credibility
    • Non-management employees are viewed as more credible than senior executives in relaying whether or not a U.S. company is operating in a socially responsible manner.
what it tells us
What It Tells Us
  • Americans expect companies to help solve pressing social issues in the communities in which they operate and define CSR expectations that go beyond just making charitable donations.
  • Americans continue to believe companies are not acting responsibly.
  • There appears to be at a “tipping point” with corporate behavior; so much so, that they are inclined to use government as a means by which to realign company priorities.
  • Look for external validation of company’s efforts.
  • The next election will reinforce this direction – not reverse it.
  • A majority of Americans now go online to learn more about CSR efforts – places where companies cannot control their message.
implications
Implications
  • Ignore CSR at your own peril
  • Active engagement
  • Give employees a voice
  • Educate employees on impact of CSR – to the company and themselves
recommendations
Recommendations
  • Put a stake in the ground
    • Transparency of efforts
    • Quantify the impact both in time and money
    • Regularly communicate progress
  • Validate efforts
    • Credible third parties
    • Employees and retirees
  • Sustained communications
    • Ongoing dialogue – internal and external
    • Social media monitoring
    • 2.0 Web site
a new kind of corporate social responsibility23
A New Kind of CorporateSocial Responsibility

Terri Owen

Senior Vice President & Partner of Internal Communications

Phone: 314-982-8620

E-mail: [email protected]

Tony Calandro

Senior Vice President & Partner of Public Affairs

Phone: 314-982-8725

E-mail: [email protected]

Visit the study online at www.csrresults.com.

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