Global Corporate Citizenship

2. Chapter 4 Global Corporate Citizenship Define Global Corporate Citizenship Stages of Corporate Citizenship Corporate Citizenship in Practice Corporate Social Performance Auditing

3. Corporate citizenship • Refers to businesses putting corporate social responsibility into practice. • Involves: • Proactively building stakeholder partnerships • Discovering business opportunities in serving society, and • Transforming a concern for financial performance into a vision of integrated financial and social performance

4. Corporate Social… Emphasizes… Responsibility obligation, accountability Responsiveness action, activity Performance outcomes, results Corporate Citizenship Concepts

5. Corporate Citizenship • Good corporate citizenship includes a commitment to ethical business behavior, balancing the needs of stakeholders and working to protect the environment (Exhibit 4A). • In simpler terms, corporate citizenship can be thought of certain responsibilities that they must perform in order to be perceived as good corporate citizens. • Companies practice good corporate citizenship to earh their “license to operate.” (i.e. a right to do business from society)

6. Global Corporate Citizenship at Microsoft At Microsoft, we believe that every successful corporation has a responsibility to use its resources and influence to make a positive impact on the world and its people. Microsoft’s commitment and responsibilities as a global corporate citizen are grounded in our company mission and values, manifested through our business practices and operations, and carried out by thousands of Microsoft employees and suppliers worldwide. Microsoft’s ongoing work in the area of global citizenship is focused on mobilizing our resources across the company to create opportunities in communities around the world, to foster economic growth, and to serve the public good through innovative technologies and partnerships with government, industry, and community organizations.

7. Global Citizenship at Pfizer • Decision-making at Pfizer is guided by our values and the needs of our stakeholders. Written policies and procedures provide the maps and our values are the compass to decision-making. We strive for integrity to underpin all our business activities and relationships. Following are brief descriptions of key policies and practices: • What We Do—Improving Health • Access to MedicinesOur vision for the world is one of universal access to basic health care. We will work in partnership with governments, nongovernmental organizations, multilateral organizations, private industry, academic institutions and others to help realize that vision. • Safety of MedicinesWe have detailed internal policies, practices and procedures to maintain some of the highest ethical, scientific, clinical and manufacturing standards in the world to ensure Pfizer medicines are safe. • Quality Health Care—The Five I'sWe strive for ideal qualities of health care: inclusive to all patients, individualized treatments, innovative research, information on health, and incentives for good health. • Philanthropy and Social InvestmentWe strive to make an impact on communities by deploying the skills, knowledge, technology and resources of our company. Our philanthropic approach involves measurable outcomes that allow for scalable and sustainable solutions.

8. Stages of Corporate Citizenship • Companies do not become good corporate citizens overnight. • The process takes time as new attitudes have to be developed, new routines learned, new policies and action programs designed and new relationships formed. • Model (shown on next slide) by Mirvis and Googins shows that firms typically pass through a sequence of 5 stages as they develop as corporate citizens.

9. Stages of Corporate Citizenship Figure 4.1

10. Corporate Social Performance Audit • Is a systematic evaluation of an organization’s social, ethical, and environmental performance. • Can take 2 forms: • Performance measured against a company’s own mission statement or policies • Performance measured against a set of established standards • Like the Davenport Principles presented earlier, or the global standards presented on the following slides

11. Corporate social performance audits • Social Audits usually report three categories: • Human Resources (equity & diversity, employment indicators, remuneration etc) • Community (the impact of the firm’s operations on the local population and stakeholders) • Labour standards (does the organization have good labour practices?)

12. Global Social Audit Standards Figure 4.2

13. Additional Social Audit Approaches Balanced Scorecard • Set of key financial and non-financial indicators • Financial measures are no longer sufficient for guiding companies. • Companies must now emphasize ethical considerations, innovation and learning, employees and internal business processes.

14. Balanced Scorecard

15. Triple Bottom Line Triple bottom line • In the one “bottom line” approach (i.e. only looking at the firm’s financial bottom line), the impacts or benefits of corporate citizenship cannot be fully measured or appreciated. • The stakeholder perspective views that a firm has “multiple bottom lines.” When companies report to stakeholders not just their financial results but also their environmental and social impacts. Financial, social and environmental results, taken together as an integrated whole, constitute a company’s triple bottom line.

16. Corporate Citizenship Awards • In Malaysia: • Hibiscus Awards by the Prime Minister’s Department • Malaysia Environment and Social Reporting Awards (MESRA) by the ACCA • NACRA Awards (National Annual Corporate Report Awards) jointly organized by Bursa Malaysia, MIA, MIM and MICPA.