the mount vernon report summer 2008 - vol. 8, no. 2

8/8/2019 The Mount Vernon Report Summer 2008 - vol. 8, no. 2

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S p r i n g 2 0 0 8 v o l . 8 n o . 2

I s su e s Af f e c t in g Repu ta t i on Manag emen t and S t r at e g i c Communi ca t i on s

Corporate social responsibility might just be a misnomer. Abetter way of describing the practice would be collectivesocial responsibility. We are our brothers keeper. Ourlives are inter-connected and the earths destiny is

dependent on a mosaic of our collective behaviors. Each of us playsa role in helping others by the intended positive actions we take tomake this earth a better place to live. However, culturally this can betricky to accomplish in practice. We all want the best for ourselvesfirst, and then our families, our tribes, our villages and our nations.But the world neednt be a division of haves and have-nots. We canand should behave civilly and treat others the way in which we wish to

be treated remember the golden rule.

We all occupy space and use the worlds resources. Some of us in thedeveloped world use much more than those less advantaged folks inthe developing world. We Westerners have all the benefits ofrefrigerators, air conditioning and comfort appliances. We take forgranted clean air and clean water. We even assume that we will haveenough to eat and be able to grow enough food in our nation. Theseassumptions are being challenged as the world becomes morepopulated, faster moving and more mobile. At one time the worldspoor may have lived in blissful ignorance of the excess of wealth andprosperity in the world. The poor are now exposed to the disparity.

They have been provided a vision of what is possible. As capitalismspreads, and with it democracy and its accompanying human rights,there will not be room for corporate exploitation. People and theirelected leaders will not stand for it. Enlightened governments willwant the best for their people and they will in turn force corporationsand their leaders to behave ethically and provide fair businesspractices; offering fair prices for goods and services. Perhaps the ageof cheap labor has passed and along with it, permission to exploit theworlds natural resources.

Does this mean to behave with social responsibility we will need toaccept some form of socialized government? I do not think this is

the inevitable outcome. I believe the strength of entrepreneurialcapitalism will always reward the ingenuity of the person who makesthe better mouse trap and also will enable them to charge a premium.The challenge is that some corporations believe it is better for themto make products with short term integrity and design obsolescence.

They need to be reminded of the importance of quality, integrity andethics. Not in a preachy waybut by our ability to reward orpenalize them through our purchases. We have the power to boycottand turn away from bad companies and bad behavior. The breakdownof the worlds geographic barriers and the opening of markets haveliterally taken people out of the jungle, off of the farms and put theminto the urban world. Recently I saw an ad for carpets in anarchitectural design magazine advising us to be certain that the rugswe buy are not made by exploited child labor in the third world. Iwould suggest most of the fine carpets we treasure were made in thistribal practice for centuries. People did not know any better and did

not have the opportunity to have their children hope for a better life.The responsibility for corporations is obsolescence greater today tonot take advantage of the poor or the disadvantaged.

The world is at once a vast distribution of races, ages, ethnicities,religions and cultures. We are different while at the same time part ofthe same human race. Our actions often have unintendedconsequences. Im reminded of the butterfly effect in chaostheorywhich describes the seemingly innocent beating of the wings ofa butterfly affecting the velocity of a typhoon thousands of miles away.Each of us must beat our wings in a positive rhythm to createharmony. We must also remind ourselves of that other powerful law of

unintended consequenceswhen we do something that is wrong,unethical or harming to the environment, we must realize the conse-quences can be much greater and more long lasting than we thought.

Lastly, Im reminded of that wonderful story of the man walkingdown the beach with his child. They come upon the incoming tideand hundreds of star fish washed upon the shore. The child begins tothrow the starfish one after another back into the sea. When theparent admonishes the child what does it matter? The child turnsto the parent and saysto this starfish it matters.

We all must remember doing good matters.

Our Actions Matter

Peter Morrissey can be contacted [email protected] Excellence: www.morrisseyco.com/blog

The Price Of Greatness Is Responsibility.~ Winston Churchill


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Everyone from mom and pop shops to international corporationslike Coca-Cola is announcing corporate social responsibility(CSR) efforts. Worldwide, more than half of all privately held

businesses have some sort of CSR program in place. But what is CSR,and why is it important for reputation management?

CSR, also known as corporate citizenship, is a business ethical reactionto our global reality. CSR is about finding a way to support andimprove our communities through strategies like supplier diversityprograms, environmental sustainability efforts, philanthropic initiativesand community outreach.

The world is not nearly as large as we once thought; in a globaleconomy, every action and decision has a consequence somewhere.While it may be easier to manufacture goodsin a country with lower pollution laws, doingso will contribute to poor air quality in thatregion, and may also result in other unin-tended effects such as an increased incidenceof cancer and neurological disorders. Anation with low regard for the environmentmay not place a high value on human rightsor craftsmanship.

With the realization that the Earth is notcomposed of isolated countries comes theunderstanding that business does not operatein a vacuum. We are all connected. Thisunderstanding is shaping the way businessoperates and the way consumers makechoices between brands based upon their

responsibility and reputation. The generalpublic has become increasingly aware of thepower of their individual choices. Considerthe rise of organic and fair trade labels: nearly three-quarters ofAmericans at least occasionally use organic products because of theirenvironmental benefits.

In our increasingly socially-conscious world, consumers and investorsare keeping close tabs on which companies do the right thing and whichoperate with only revenue in mind. Who can forget the sweat shopallegations of the 1990s that plagued Kathie Lee Gifford, Disney andNike? If consumers, investors, current and potential employees andbusiness partners are concerned about social activism, then CSR iscrucial to your companys reputation and therefore, its bottom line.

It is no longer good enough to produce the best, cheapest widget; youmust also function in a socially-responsible way. That means doingthings as basic as paying a living wage and ensuring on-the-job safety, aswell as taking more complex steps to reduce your companys harm tothe environment and improving conditions in the communities in whichyou operate. One of the most visible examples of CSR isenvironmentalism. Claiming to go green is de rigueur in many circles.But like any CSR initiative, it is meaningless unless there is true,meaningful action behind the claim.

There is a common thread among those who are doing it right sincerity. Publishing an annual CSR report or distributing presreleases about your corporate citizenship are hollow if these are merelymarketing tools. Shareholders are savvy about greenwashing and wilnot hesitate to draw attention to a company that claims to be workingtoward sustainability, but is still a heavy emitter of greenhouse gas.

So how, exactly, does a business become socially responsible? TheCenter for Corporate Citizenship at Boston College has identified fouprinciples of corporate citizenship: minimize harm, maximize benefitbe accountable and responsible to key stakeholders and support strongfinancial results. Each of these points may seem obvious, but to trulyincorporate corporate citizenship these principles must guide corporatculture.

Minimize HarmMinimizing the potential harm done by yourcompany requires a commitment beyondmerely making your product safe foconsumers. This is more than ensuring a safwork environment for employees. It is abouproactively identifying practices, bothinternally and externally, that can have potentially negative consequences and modifyingthem accordingly. For example, MolsonCoors Brewing Company is donating theethanol produced by its waste beer to the2008 Democratic Convention. The ethanowill be used to fuel the vehicles at theconvention, thereby reducing the eventcarbon footprint.

Maximize BenefitYour company has a tremendous resource to

enrich the communities in which you operate your employees. Employeevolunteerism is good for the community and for business. A 2001Council on Foundations study found that employee volunteerism has abigger impact on favorable employee perceptions of theicompany than any other form of corporate citizenship. Helpingothers provides fulfillment and gives people a sense of pride, andvolunteer opportunities give employees something positive to talk about.

Nicor Gas, one of the largest gas distributors in the U.S., has well-deserved reputation for community involvement. Almost 1,000employees participated in the companys 12th annual Volunteer Day

and Nicor rewards employees for their good deeds by offering grants tononprofits that the employees assist.

Be Accountable and Responsible to Key StakeholdersGone are the days of operating behind closed doors. Todaystakeholders want transparency. Prove you are worthy of their trust bybeing open and honest, even when what you have to tell them is nowhat they want to hear. Aflac recently adopted a shareholder say-onpay policy for executive compensation, a first in American businessproviding even greater transparency. In May, Aflac shareholdersapproved the companys policy of performance-based compensation.

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Managing Your Reputation Through Social Responsibility

Corporate SocialResponsibility is a

business ethicalreaction to ourglobal reality.

{REPUTATION - continued on PG 3}


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Support Strong Financial ResultsWhile incorporating a CSR program, it is important to remember thatyou still have a responsibility to your employees and shareholders togenerate revenue. A corporate social responsibility program shouldultimately boost both your reputation and your business bottom line.

A large number of companies have embraced their responsibility ascorporate citizens, making it difficult to name just one that is leadingthe way. Manpower Inc. was recognized as the Most Shareholder-Friendly Company by Institutional Investor magazine in 2006, the sameyear that employees there donated 30,000 hours of their time tovolunteer efforts. Patagonia lives up to its mission of using businessto inspire and implement solutions to the environmental crisis with acomprehensive CSR program. In 2006, Timberland was not onlyranked sixth in Business Ethics magazines 100 Best Corporate Citizens,but it was also named to the Forbes list of Best Big Companies inAmerica for the eighth consecutive year.

Steps a company can take to become a better corporate citizen include:

Encourage employees to donate their time to worthy causes, eitherwith incentives or paid time off to volunteer.

Implement small changes to lessen your energy use, for example byturning off lights and computers when not in the office.

Create an employee wellness program. Sponsor a community-wide program to discover new ways to

increase sustainability.

Participate in tele- and web-conferences to cut down on travel. Make a commitment to supporting minority-owned businesses

and supplier diversity.

And then tell the public about your programs. Your reputation as acompany committed to citizenship will grow if you tell people abouyour efforts, but you must be careful to avoid appearing insincere orself-serving. Communicate carefully in a way that demonstrates thathe companys efforts are dedicated to the greater good.

Many companies now have a page on their website dedicated to theiCSR programs. ING posted a video on YouTube touting itenvironmental strategy. Toms of Maine, a natural personal carproducts company, is sponsoring a video contest in which entrantexplain how they work to preserve the rivers in their communitiesAnother way many companies are telling shareholders about theirprograms is through an annual CSR report, or pamphlets in offices orstores.

Initiating a CSR program does not require a complete overhaul ofcompany practices small steps lead to big change. Evaluate youcompanys resources and expertise to determine how best you can makea difference, and consider options you can implement easily to use as abasis, and grow your program from there. CSR is no longer just catchphrase. Its about good reputations and good business.~April Wildermuth

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Responsibility Easier Said than Done

RESPONSIBILITY

Primum non nocere. Translation: First, do noharm. The globally recognized mantra of the

medical profession is one with wide ranging

applications in the business world. Its wisdom

applies as well in the corporate world as it does in

the operating room. Modern businesses, from a two

person start-up company to a multi-billion dollar

conglomerate, share a responsibility to consider the

degree of harm they inflict on our world while at the

same time proactively taking measures to stimulate

a positive effect. How is it done? Where does one

begin on the path of corporate social responsibility?

Consider the five Ps of corporate social responsibility:

1) Your practices Are your companys factories

emitting gases and polluting the environment?

How can you reduce and/or offset this reality? Is

your product beneficial or detrimental to the health

of our population? Our children? Are your

financials accurate? Are your products made

well? Are they made ethically? Do they do what

they promise? Ask yourself some hard questions

about the realities of what you do.

2) Your people Are your people treated fairly?Are they encouraged to be honest, hardworking

and ethical in their personal practices? Are they

rewarded for outstanding work toward social

responsibility? Are they, perhaps, awarded time off

for charitable or philanthropic endeavors? Is their

emotional and physical well-being considered?

Pay attention to the people who make your

company tick.

3) Your power Companies have differing degrees

of relative power. Understand the range and

possibilities in your organizations power to com-

municate to consumers and to lead by example. A

small start-up can use its clean slate to itsadvantage and incorporate social responsibility

early, making it a keystone of its offering.

Reconsider the initial business plan in accordance

with a more ethically sound approach. Larger

corporations can use their size and their marketing

budget to enact a more profound strategy.

4) Your promise State your intentions. Usemodern communication channels to share them.

Invite feedback and suggestions from consumers.

Call upon your allies in the business world to join your

cause. Invite your competitors to join you as well.

5) Your potential Consider the future. A true

mission of corporate social responsibility doesnt

happen overnight, and it doesnt end when the

calendar turns or the fiscal year expires.

Sounds easy enough. It is and it isnt. Corporate

social responsibility is an easier said than done

proposition. Writing a moving mission statement is

only the beginning. Hanging a poster of beliefs orrules in the employee cafeteria isnt enough.

Creating a flashy new website with the requisite

photos of children and the environment is nice on

the surface but hollow in the long term unless it

is supported by continual corporate action.

Companies actions, output and employees must

reflect the tenets of corporate social responsibility

in order for them to be truly meaningful.

~ Scott Emberley

{REPUTATION - continued from PG 2}


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The Mount Vernon Report is published and copyrighted 2008 by Morrissey & Company, an independent Reputation Management and Public Relations firm headquartered at 121 Mount Vernon Street, Boston, MA 02108. Permission to copy anddistribute is granted, provided that full attribution is given to Morrissey & Company. Further commentary or response to any of the topics discussed in this issue is welcome and should be directed to 617-523-4141 or via e-mail to [email protected].

Printed on recycled paper. In an effort to conserve natural resources we have altered the format of the Mount Vernon Report to omit the use of an envelope.

Please visit us on the World Wide Web at: http://www.mountvernonreport.com RepEx Blog: www.morrisseyco.com/blog

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Morrissey & Company121 Mount Vernon StreetBoston, MA 02108

Reputation Advisor

Global Survey Finds Most Companies LackSustainability Strategy a Key Component toCorporate Social Responsibility Initiatives.

A recent global survey of corporations focused on sustainability,one of the pillars to man corporate CSR initiatives, show thathalf of businesses polled lack a sustainability strategy. CEOsmade up the majority of survey respondents, and although lessthan half have a strategy today, 55 percent said sustainabilitywill grow in importance and require increased resources andattention. The study was sponsored by Pinnacle Worldwide, Inc.(PWW), a global organization of independent public relationsfirms and was developed by Vandiver Group, Inc. (TGV) of St.Louis, MO.

Full results are posted at: http://www.vandivergroup.com/services/documents/sustainability_survey_results.pdf

The survey, encompassing information from companies on sixcontinents, 25 countries and 40 industries, found thatapproximately one-third of businesses are developing asustainability strategy. An overwhelming 75 percent ofrespondents said sustainability is either an important part ofour organizations corporate strategy, or said they expect thetopic to become increasingly important in the future.

The study also found that organizations with a sustainabilitystrategy are more likely to be focused on improving perceptionsand responding to increasing regulations, rather than meetingsocial needs or generating revenue opportunities.

Editors Note: The survey was conducted online between April 15 and May 5,2008. The survey asked business people how they approach sustainabilitystrategy. The 338 respondents represented six continents, 25 countries and40 different industries.~Margaret Brady

Recommended Reading

Making Sustainability Work: Best Practices in Managing andMeasuring Corporate Social, Environmental and EconomicImpacts by Mark J. Epstein (Berrett-Koehler Publishers)

Drawing on the latest research and the best practices of 100companies worldwide, Epstein provides an extraordinarilycomplete model for implementing sustainability initiatives. Hecovers the role of senior managers and corporate boards inleading and governing sustainability activities; organizationaldesign issues that can improve sustainability; integration ofsocial risk factors into capital investment, costing, and riskmanagement systems; incentives and rewards to improvesustainability performance; identification and measurementcorporate social, environmental, and economic impacts.

The Market for Virtue: The Potential And Limits ofCorporate Social Responsibility by David Vogel. (TheBrookings Institute) The Market for Virtue offers the right mixof theory, analysis, and example for CSR and offers metrics forevaluating the many different embodiments of CSR. It is anexamination of a politically charged and highly polarized debateconcerning what corporate social responsibility can, cannot, andmust accomplish in a modern capitalist economy.

New Strategies for Reputation Management: Gaining Controlof Issues, Crises & Corporate Social Responsibility by AndrewGriffin (Kogan Page) New Strategies for ReputationManagement shows executives how to take the initiative instrategically managing a companys reputation. Andrew Griffinargues that standard thinking on reputation management is ofteninadequate for todays information age. He describes a host ofnew and robust methods that will ensure a companys reputationcan withstand the major crises and unforeseen events thatthreaten it.

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