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What Do Surveys Say About Corporate Citizenship? “Americans Send Message: Get Down to Business on Corporate Citizenship” “Understanding of Term ‘Corporate Social Responsibility’ (CSR) Differs Greatly Country to Country” “Corporate Responsibility Has Strong Affect on Reputations” “Internal Considerations Motivate Companies to Adopt Corporate Citizenship” These headlines, produced by polling companies, consulting firms, and the Boston College Center for Corporate Citizenship’s research arm are based on surveys of the general public and company executives in the United States and around the globe. Some provide an outside-in look at the public’s expectations of corporate citizenship and at the comparative views of investors, consumers, and opinion leaders, as well as current and future members of the workforce. Others afford an inside-out picture of how managers think about citizenship, set their company’s agenda, and put it into practice. A Working Paper from the Boston College Center for Corporate Citizenship Table of Contents What is the role of business in society? . . . . . . . . . . . . . . . . . . 1 What are the responsibilities of business? . . . . . . . . . . . . . . . .2 What does citizenship mean to business leaders? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Are companies good corporate citizens? . . . . . . . . . . . . . . . . . .3 Is citizenship a contributor to corporate reputation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Does citizenship help companies to recruit and retain employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Does citizenship matter to consumers? . . . . . . . . . . . . . . . . . . .5 Are people socially responsible? . . . . . . . . . . . . . . . . . . . . . . . . .6 What drives citizenship in companies? . . . . . . . . . . . . . . . . . . .6 How do social issues factor into corporate citizenship? . . . . .7 How do companies manage sociopolitical issues? . . . . . . . . . .7 Can social issues be opportunities for business? . . . . . . . . . . .8 How do views of corporate citizenship differ around the world? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 What’s on the social agenda in the United States? . . . . . . . . .9 How is citizenship managed in companies? . . . . . . . . . . . . . . .9 What’s involved in “Next Generation Corporate Citizenship?” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Can surveys help companies to manage citizenship? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 What should you know about surveys? . . . . . . . . . . . . . . . . . . .13 Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t So what do surveys say about corporate citizenship? The Center has tracked the studies of respected organizations such as GlobeScan, GolinHarris, and the Reputation Institute, and done our own surveys of U.S. business leaders to get a handle on this subject.1 Plus we’ve perused studies b y PricewaterhouseCoopers, McKinsey & Co., Cone Inc., Fleishman Hillard and others to focus on select facets of citizenship that can be better understood, interpreted, and managed through survey data. Here is a look at these findings followed by general thoughts on company-specific surveys on citizenship and how they can assist a business. What is the role of business in society? In 2006, the Center released the study Step Up: A Call for Business Leadership in Society that featured face-to-face interviews with the CEOs and one other top executive in 25 global companies. As part of the interview, the executives were asked to complete a brief survey that allowed them to choose their favored definition of the role of business. Just three of 48 who completed the survey chose the narrow view of Milton Friedman that the “social responsibility of business is to increase its profits.” The rest had a far more expansive view that emphasized the moral responsibilities of companies, the business case for engaging society more fully, or the idea that a positive relationship with society gives a firm its identity and defines “who we are.”2 The Center’s researchers were surprised that so few CEO’s adopted the orthodox view that business is beholden only to its shareholders. After all, this is the philosophical fuel behind the shareholder’s rights movement that has dominated business since the 1980s and is still a central tenet in the business school’s catechism. We wondered: Could either our selective sample or the “PR” aspects of a personal interview be sources of bias? Fortuitously, on a parallel track was McKinsey & Co.’s anonymous, web-based survey of more than 4,000 executives in 116 countries.3 It found that just 16% of executives adopted the view that business should “focus solely on providing highest possible returns to investors while obeying all laws and regulations.” The other 84% agreed with the statement that business should “generate high returns to investors but balance that with contributing to the broader public good.” This data provides broader-based evidence that company leaders today embrace a larger view of business than that of simply providing returns to shareholders. This view includes, among other themes, recognition of responsibilities to multiple stakeholders and the belief that firms can “do well by doing good.” Summing up, one CEO interviewed by the Center remarked, “I used to be a proponent of the idea that our job is to generate BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP By Philip H. Mirvis, Ph.D. This Working Paper was produced to provide an overview of and context to the dozens of public opinion surveys addressing corporate citizenship issues. The surveys examine these issues from many perspectives including those of executives, employees, consumers, and the general public. The polls cited throughout the paper are from a consortium of researchers around the world including Bloomberg/LA Times, Boston College Center for Corporate Citizenship, Cone Inc., Fleishman-Hillard and the National Consumer’s League, GEMI/BSR, GlobeScan, GolinHarris, Hill and Knowlton and Korn/Ferry, McKinsey, NetImpact, PricewaterhouseCoopers, Reputation Institute, and Sirota Survey Intelligence. 1 shareholder value. But I came to believe that that is a naïve proposition. It is intellectually correct, but it is naïve.” These are, of course, operational aspects of firms and well within their control. But, in addition, a significant number held them completely responsible for reducing human rights abuses, preventing the spread of HIV/AIDS, and reducing the rich-poor gap. Add in the category of “partially responsible,” and business is responsible, in the public’s eye, not only for minding its own store but also for addressing myriad of the world’s ills. [See Figure 1] Certainly the public ascribes to a larger view of business. The Millennium Report, a poll of worldwide public opinion conducted at the turn of the century, found that just one in ten adults subscribes to the Friedmanesque notion of corporate responsibilities. Contra-wise, a follow-up poll found that more than 80% agree that “larger companies should do more than give money to solve social problems.”4 The U.S. Perspective. Taking a somewhat different tack on this subject, GolinHarris, a leading public relations firm, asks people in the United States to rate how important various practices are to a company’s overall performance as a good corporate citizen. Whether or not a company “values and treats its employees well and fairly” was the #1 factor in citizenship as measured in Fall 2006 (rated ‘very high in importance’ by 68% of the U.S. public). Interestingly, this has been the top factor in their polls about citizenship for five years running. In addition, large numbers rated as highly important that a firm’s “executives and business practices are ethical, honest, open, and accountable” (65%) and that it “goes beyond what is required to provide safe and “reliable products and services” (43%).5 What are the responsibilities of business? What does the public see as the responsibilities of business? A 2005 GlobeScan poll asked the public whether or not companies were “not at all” or “somewhat” or “completely” responsible for various aspects of business operations and their impact on society. The pollsters found that large majorities in twentyone countries hold companies completely responsible for the safety of their products, fair treatment of employees, responsible use of raw materials, and for not harming the environment. What does citizenship mean to business leaders? Figure 1 Societal Expectations of Companies Companies Held Completely Responsible for Average of 21 Countries, 2005 87% Product health/safety Do not harm the environment 82% Treat employees fairly 82% 75% Materials produced responsibly 73% High universal standards Good quality at lowest price 59% 50% Reduce human rights abuses Prevent spread of HIV/AIDS 43% Reduce rich-poor gap 43% Encourage employees to volunteer Support progressive legislation Citizenship 41% Increase economic stability Solve social problems Operational 32% 26% 24% * Not asked in Nigeria and Switzerland Source: GlobeScan’s 2005 Corporate Social Responsibility Monitor survey. Reproduced with permission of GlobeScan Incorporated (Toronto). 2 How do U.S. business leaders think about citizenship? The Center’s survey of business leaders finds that 75% believe that the public expects them to exceed laws to make sure products are reliable and safe, and 58% believe that the public expects them to exceed laws to protect the environment. More broadly, some 80% believe that citizenship needs to be a priority for companies and a large majority (69%) agree that the public has a right to expect it. In the Center’s 2005 survey of American business, we reminded a random sample of over 1,000 executives that “corporate citizenship means different things to different companies.” Then we asked them to rate “how important” a variety of business practices were to their company’s role in society. Roughly four in ten adopted a minimalist view of the role of their firm: maximize profits, report finances accurately, obey the law, ensure safety What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t CSR: Expectations versus Performance Public expectations and public perceptions of corporate responsibility performance Expectations Interestingly, we found differences in firms of different sizes. For instance, the leaders in large companies were twice as likely as those in midsize and smaller firms to see the importance of “building employee diversity” within the business and “responding to community or interest groups regarding issues they care about.” They also put somewhat more emphasis on supporting employee volunteerism and on maximizing longrun profits for owners. We found some sectoral differences in priorities. For instance, firms in heavy industry put more emphasis on environmental protection while those in the service sector put somewhat more on treating employees well. Other size and sector, as well as regional, differences are found in Center reports on these surveys. Figure 3: • • • CSR expectations • CSR industry performance Performance and health, provide basic employee benefits, and the like. Slightly more than six in ten, however, had a more inclusive perspective. They saw it as very important that their company treat workers fairly and well, protect consumers and the environment, improve conditions in communities, and, in larger companies, to attend to ethical operation of their supply chain (see Figure 2). • 1 200 3 200 • 5 200 *In 2005, asked in Argentina, Australia, Brazil, Canada, Chile, China, France, Germany, Great Britain, India, Indonesia, Italy, Mexico, Nigeria, Philippines, Russia, South Africa, South Korea, Switzerland, Turkey and USA Source: GlobeScan’s 2005 Corporate Social Responsibility Monitor sur- Figure 2: vey. Reproduced with permission of GlobeScan Incorporated (Toronto). The Role of Business in Society: Two Perspectives Question asked: “How important is each of the following (business practices) to your company’s role in society?” Each category represents a set of practices that respondents cited as “very important” or “critical.” Public House Steward in Order (667 (413 respondents) respondents) Maximize profits ✓ ✓ Manage financial reporting accurately ✓ ✓ Operate ethically ✓ ✓ Ensure employee health and safety ✓ ✓ Provide employee benefits ✓ ✓ Provide jobs ✓ Protect the environment ✓ Improve conditions in communities ✓ Protect consumers ✓ Work with suppliers to ensure ethical operations ✓ BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP Are companies good corporate citizens? How is business doing overall on its responsibility scorecard? A multiyear look at public opinion worldwide by GlobeScan shows that public expectations of companies have been rising and that ratings of their social responsibility have been dropping (see Figure 3). Recent data from the Reputation Institute documents that in 25 countries studied, an average of just onein-five people agree that “most companies are socially responsible.” Roughly 16% of Americans see it this way—fewer than in Mexico (35%) and Canada (26%) but more than in the U.K. (11%) and Japan (9%). GolinHarris provides only a slightly more sanguine view of current U.S. public opinion. Its 2006 poll asked “How would you rate American business today for its corporate citizenship?” Some 40% gave business average/fair marks and 37% said below average or poor. Thus just one in four said good or excellent. In addition, over 40% opined that business is “headed in the wrong direction on corporate citizenship.” What accounts for these desultory results? Obviously, there are broad perceptions at work here that encompass everything from corporate downsizing, outsourcing, and offshoring that 3 combine to feed the insecurities of working people, to growing gaps between the earnings of the fortunate fifth of Americans versus the rest of the workforce whose wages stagnate. Swollen paychecks of CEOs coupled with perceptions of profiteering by oil companies, pharmaceuticals, and most every other big business exacerbate discontent; and the fallout from Enron and its ilk remains a factor. What do business leaders say about growing distrust of corporations in the United States? The Center’s 2007 survey of American business asked company leaders what accounts for widespread distrust today. Four of five say that excessive CEO pay explains a lot of the public’s discontent. They also point the finger at the media’s negative coverage of big business (stressed by 62%) and to the idea that the public doesn’t understand what most companies do (53%). At the same time, a substantial number of business leaders say that a lack of accountability (69%) and transparency (49%) factor into the public’s judgments. And roughly half acknowledge that distrust stems from the fact that corporations do harm to the environment and show disregard for communities in which they operate. To put this into context, mistrust of business and its leaders has been consistently documented in the United States since the early 1960s and typically peaks whenever misdeeds come to light—such as exposés on the safety flaws of the Chevrolet Corvair in the 1960s, hazards of the Dalkon Shield birth control device in the ’70s, the Exxon Valdez environmental mess in the ’80s, and so on. Now seems to be no exception: a Los Angeles Times poll, asking about reactions to the financial misdeeds of high-profile companies, found a substantial segment of the U.S. public to be “much less trusting” (22%) or “somewhat less trusting” (another 22%) of major corporations in the aftermath.6 Finally, pay attention to the diminished role of government in American society and the loss of trust and confidence in public officials. This, in light of demonstrable problems in the nation’s education and healthcare system, and in community welfare and infrastructure, make it understandable why the public might turn to business, particularly big business, to do more for society and to take better care of the natural environment. On this count, the Center’s 2007 survey finds that 60 percent of U.S. business leaders say the the social contract between business, government, nonprofits, and individual citizens has serious structural flaws and may need a complete overhaul. Large numbers agree that business is completely responsible for making sure its products and operations don’t harm the environment and at least partially responsible for improving education and skills in communities where it operates, as well as helping to solve social problems like crime and poverty. A key question, then, is whether or not companies can make a busi- 4 ness case for this expanded citizenship agenda. Here, too, surveys have something to say. Is citizenship a contributor to corporate reputation? The Center’s biennial survey of U.S. companies finds that two of every three company leaders today believe that citizenship makes a tangible contribution to the bottom line. What is behind the thinking of America’s executives? Many researchers are using surveys to document a link between citizenship and reputation. Researchers from the Reputation Institute, for example, have studied the reputations of over 600 companies based on 30,000 online interviews with consumers in twentyfive countries. In response to a general question, between 50 to 80% of the respondents (depending on the country) agree that citizenship programs have a strong effect on the reputations of companies. This perception is strongest in countries like South Africa, Brazil, China, and Mexico where, the researchers argue, companies play a more important role in societal development. Still, over 53% of the public in the United States see a strong link between citizenship and reputation. Digging deeper into the database, the Reputation Institute’s researchers have analyzed the relationship between different aspects of a firm and its overall reputation.7 The top predictor of corporate reputation is what they term the “heartbeat” factor— the public’s overall respect for and trust in a company. What is the next most significant predictor? In its 2007 global survey on reputation, ratings of a company’s social and environmental responsibility was the next most significant predictor of its reputation overall. This means, at least in the public’s eyes, that citizenship is a bigger factor in reputation than perceptions of a company’s products and services, innovativeness, financial performance, workplace practices, governance, and leadership. It is not just the public that makes this connection between citizenship and reputation. Hill and Knowlton’s Corporate Reputation Watch finds that 80% of CEOs believe that corporate social responsibility contributes to their company’s reputation to some extent, with three in ten holding the belief that it has a very significant effect.8 This same survey reports that the majority of CEOs also believe that reputational benefits can significantly increase their company’s ability to recruit and retain employees, generate additional sales, and achieve many of the other business benefits we have identified. What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t Does citizenship help companies to recruit and retain employees? The Center has, for several years, characterized employees as the “missing link” in corporate citizenship. We have, in turn, urged companies to engage employees under the mantle of citizenship—and in deeper and more meaningful ways. This is, of course, the central feature of the “good company” brand for employers. One study phrased its meaning succinctly: CSR minus HR = PR. What’s the evidence that working people want to be engaged as corporate citizens? The Reputation Institute finds that, on average, 75 to 80% of those polled in some 25 countries would “prefer to work for a company that is known for its social responsibility.” It also shows that the appeal of corporate citizenship to employees is by no means limited to the United States or developed economies with their comparatively prosperous and welleducated workforces. On the contrary, while the Reputation Institute ranks social responsibility as a significant driver in attracting employees in the United States (over 62% say it is important to them), it is even more important in India (69%), South Africa (77%), and China (79%). Along this same line, GlobeScan has found that nine out of ten employees worldwide are interested in participating in the CSR initiatives of their companies (increasing from 81% in 2002 to 92% in 2005). Another recent survey by Sirota Survey Intelligence shows how much corporate social responsibility factors into the job attitudes of working people. The Sirota survey, of 1.6 million employees in 70 companies, found sharp differences in attitudes between employees who did and did not approve of their company’s commitments to social responsibility.9 Some 71% of employees who approve of their company’s commitments have favorable perceptions of their management’s integrity versus 21% of those who do not approve. Those who favor their company’s commitments are also more engaged in their job (86 versus 37%) and more apt to believe that their employers are interested in their well-being (75 versus 17%). Interestingly, they rate their companies as more competitive, too (82 versus 41%). This link between strong and socially conscious corporate values, commitments to citizenship, and the resulting business benefits is what the Center has called the “value proposition” for corporate citizenship.10 In the United States, an interest in citizenship seems especially strong among Generation Y – or “Millennials,” as they are also known – who were born 1978–98, and who are entering and moving up in companies today. The 2006 Cone Millennial Cause Study found that more than three out of four young people who are part of or entering the U.S. workforce want to work for a company that “cares about how it impacts and contributes to society.”11 Nearly seven in ten say that they are aware of their BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP employer’s commitment to social/environmental causes and 65% say that their employer’s social/environmental activities make them feel loyal to their company. How about the next generation of the nation’s business leaders? Net Impact, a network of over 10,000 business school students and graduates, has 125 student and professional chapters on four continents in seventy-five cities and eighty graduate schools. The group’s most recent survey of more than 2,000 MBA students (both members and non-members) found the great majority of students hungry to learn more about CSR and sustainability in their studies and committed to finding a job that is socially responsible.12 How many students believe that business should work toward the betterment of society? Over 80% of the members (and 66% of nonmembers). How many agree that business is currently working for the betterment of society? Some 18% of members (and 24% of nonmembers). The key message from this profile of students: corporate citizenship matters to tomorrow’s business leaders. Does citizenship matter to consumers? Particularly in the west, but growing worldwide, there is a move toward healthy and sustainable consumption.13 This is reflected in trends as varied as preferences for organic foods and clothing (a market growing 20% annually), for fair trade coffee and chocolate (over 70% annually), and for local sourcing of agricultural produce (a requisite on many campuses and a signature of some grocers). There is also interest in “ethical” consumerism as evidenced by an increase in cause-related products and marketing, as well as interest in (at least among half of the world’s consumers) a brand’s connection to social responsibility. There is, not surprisingly, considerable debate about the gap between people’s expressed interest and actual buying behavior in these regards, and certainly as to whether consumers will pay a premium for such goods and services.14 For example, the UN’s environmental program describes a 40/4 gap where 40% of consumers say they want to buy green product but only 4% regularly do, at least as of 2004 when the report was issued. And claims that consumers will pay 5% more for brands from “visionary CSR companies” versus those of comparable quality from “non-visionaries” simply don’t bear out, except in the case of a few well-known icons like Ben & Jerry’s and the Body Shop. It is well documented, however, that a firm’s social credentials can help differentiate its brands, that consumers will switch brands due to CSR issues, and that when they know about a firm’s bona fides in this area, it is a factor in purchasing decisions. Indeed, evidence reveals that when a product’s social con- 5 tent aligns with its consumers’ personal interests it can be decisive in building brand loyalty.15 There are indications, for example, that they will switch from one brand to another of same price and quality if the other brand is associated with a cause. A 2007 survey by Cone, Inc. shows that 87% of consumers would switch under such conditions versus 65% in 1999.16 Figure 4 Corporate Citizenship "Drivers" [U.S. National Survey, 2007] What drives companies to embrace corporate citizenship? 76% Traditions and values Customers and consumers 66% Reputation/image Are people socially responsible? 53% 33% Expected in community 60% 29% Findings like the 40/4 gap raise questions Business strategy It helps manage about whether or not the public manifests regulatory pressures its interests in corporate citizenship in its 41% own social responsibilities. A 2007 poll by Recruit/retain employees Louis Harris of 2,383 adults is revealing on Source: State of Corporate Citizenship in the U.S.: Business Perspectives in 2007. © Boston this count. It finds that over two-thirds of College Center for Corporate Citizenship. the public shows “good intentions” by supporting the idea that people should 1) get involved with different issues and causes, 2) actively contribute time and money, and credible) versus company websites (cited by 29%). The most 3) factor a company’s reputation for social responsibility into credible sources are personal experience (cited by 60%) and decisions about what to buy and who to do business with. word of mouth (56%). There are, in addition, some signs of activism in this 2007 survey. Approximately 40% report that At the same time, far fewer translate these intentions into they have sent an email to companies about some facet of coraction: Only 8% say that they are “extremely involved” in giving porate social responsibility. time and/or money to organizations and causes they believe in, while another 24% say they give generously; and only 16% say that a company’s reputation for social responsibility has a strong effect on their decisions about what to buy and with What drives citizenship in companies? whom to do business, while another one-third say it sometimes Many practitioners make the “business case” for corporate citiaffects their decisions. Meanwhile, 25% take a more libertarian zenship based on its positive relationship to corporate reputaand laissez-faire position on these options. This shows a gap tion, employee motivation, and, to some extent, customer loyalbetween what people preach versus practice, but not necessarity. In this light, the Center has queried American executives ly a reliable one. The survey doesn’t gauge actual behavior nor about what drives decisions about citizenship in their compaindicate how often and under what circumstances people transnies. In our 2003 and 2005 surveys, laws and political preslate their good intentions into periodic acts of charity or responsures, the expectations of communities, gains in recruiting and sible consumption decisions. retention, and benefits to reputation all proved to be motivators for citizenship. But the most important driver executives cited Surveys do show, however, that the public is increasingly interwas company traditions and values [see Figure 4]. It was rated ested in the citizenship of companies. The 2007 Fleishmanhighest in small, medium, and large size firms and in compaHillard/National Consumer’s League survey found that some nies in every sector. While the business case is a motivator for 54% of consumers seek out information “sometimes” about the action, it seems that internal factors of identity and culture, social responsibility of particular companies. Increasingly, they namely the way citizenship expresses “who we are,” are what are turning to the internet to search for information. drive citizenship in companies. Interestingly, over half of the consumers surveyed turned to the Exploring this subject, a Booz Allen Hamilton/Aspen Institute websites of independent groups, such as consumer-watch survey found that nearly nine out of ten global companies have groups or accrediting agencies, to garner data, a substantial value statements that speak to ethics and integrity, and that the increase from prior years. When it comes to judging the credigreat majority of them profess a commitment to customers, bility of data, consumers favor independent (cited by 43% as 6 What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t employees, shareholders, and other stakeholders as well as to corporate citizenship or CSR.17 Interestingly, the study found that companies that were top financial performers had a stronger belief than the rest of the sample in the value of values. They were also more likely to believe that environmental responsibility and corporate citizenship are drivers of their business success. How do social issues factor into corporate citizenship? Many polling and consulting shops profile the issues that keep executives awake at night. PricewaterhouseCoopers (PwC) 10th annual survey of nearly 1,100 CEOs in 2006, for example, found that concerns about overregulation, the availability of key skills, low-cost competition, and energy and commodity prices were uppermost on the minds of top executives. Issues around scarcities in natural resources, global warming, and potential pandemics, such as obesity and bird flu, were further down the list of immediate concerns for most company heads.18 PwC also asked about how many resources companies expend to deal with these threats. The analysis shows some correlation between the threats facing business and its response to them. McKinsey & Co.’s 2007 global survey of over 3,500 top executives, by comparison, asked how important select issues would be for business in the next five years. Looking ahead, business leaders placed importance on issues such as the growing numbers of consumers in emerging economies, increasing global talent and labor markets, a faster pace of technological innovation, constraints on supply or usage of natural resources, and an aging population in developed countries. It showed many firms taking active steps to respond to the technological and labor force issues, but comparatively fewer preparing for social, demographic, and environmental challenges.19 Social Issues in Perspective. McKinsey has also tried to put social issues into perspective. For instance, in 2005, the consultancy also asked 4,063 consumers in the U.S., France, Germany, Japan, India, and China for their views on the most pressing social issues. Consumers ranked the environment, pensions/retirement, and health benefits as their top three concerns. A comparison between consumer and executive worries is striking, particularly when it comes to the natural environment and pensions/retirement—top concerns of consumers and secondary worries of business leaders. No wonder McKinsey labels these as two key risks facing business in the years ahead.20 BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP In addition, McKinsey also asked executives about the relative balance of risks and opportunities posed by issues. The executives saw pensions as a key risk. In addition, they viewed threats to privacy and political influence primarily as risks to companies. By contrast, the bulk of executives surveyed saw an equal balance between risk and opportunity in calls for more investment in developing countries, for ethical standards in advertising and marketing, and for attention to human rights. How do companies manage sociopolitical issues? Changing public expectations, the media spotlight, pressures from nongovernmental organizations, aggrieved shareholder resolutions, and of course misconduct or lapses in social performance all bring social issues into a firm’s strategic calculus. McKinsey & Co. asked executives, “When large companies in your industry try to manage sociopolitical issues, which three tactics do they rely on most frequently?” The top three tactics cited: 1) using media and public relations; 2) lobbying regulators and governments; and 3) speeches and public actions taken by the CEO. But a follow-up question in the executive survey asked about the effectiveness of such tactics. Just 35% cited media and public relations as an effective tactic; 25% cited lobbying; and only 14% cited speeches and actions by the CEO. Certainly the public no longer countenances corporate scandals and attempts to cover them over in public relations campaigns. Surveys show that the public—as consumers, investors, and employees—takes a punitive view of “bad corporate behavior.”21 When asked in the Cone study how they would respond if they were to find out about corporate misdoings, here is a sample of what the public reports: • 75% would refuse to work at that company. • 80% would refuse to invest in that company’s stock; and • 81% would speak out against that company among family and friends; • 90% would consider switching to another company’s products or services. On these counts, the McKinsey study suggests a more effective course of action for firms facing controversies. Tactics deemed most effective are: increase transparency (cited by 36%), implement internal CSR policies (35%), and engage stakeholders (33%). 7 Can social issues be opportunities for business? Polls show that the public expects corporations to “exceed the law” when it comes to protecting the natural environment—not only in the United States, Europe, and Japan, but also throughout Asia, Latin America, and even Africa. Very few support economic development at the expense of the environment, and big companies especially are expected to apply the same environmental standards to their operations in the developing world as they do at home. According to McKinsey surveys, many business leaders see climate change as chiefly a risk, but a minority of them sees it as more of an opportunity. This is another way that social issues translate into strategy and what motivates company investments in environmental improvements, the emergence of carbon trading, and the launch of many more eco-friendly products. Studies of the size of this green market suggest that the LOHAS (Lifestyles of Health and Safety) segment will grow from $200 billion in sales today to $420 billion in three years to $845 billion by 2015. There are many other social issues that can be both threats and opportunities. Obesity, as one example, is widespread in the U.S. and Europe and growing in India, China, and elsewhere. Type II diabetes is projected to reach pandemic proportions— from roughly 180 million cases today to 370 million by 2030. At the same time, attitudes have shifted dramatically about the “causes” of obesity. An analysis of New York Times articles on obesity found that, in 1990, some 84% of the stories stressed that obesity was caused by individual habits and only 14% attributed causation to the environment. Thirteen years later, by comparison, personal causes were emphasized in 54% of the articles while 46% cited environmental causes––a threefold increase.22 This naturally poses a threat to fast food franchisers and soft drink purveyors. It also expands the market for healthier foods and beverages. How do views of corporate citizenship differ around the world? We have noted a few of the differences in the relationship of citizenship to corporate reputation, employee attraction, and consumer behavior around the globe. The Reputation Institute reports, for instance, that citizenship is very important to the Chinese. It is a major factor in their ratings of a company’s reputation, and very relevant in employee and consumer choices. 8 Note that this relationship works in two ways: good corporate citizens are acclaimed and those that perform badly as citizens are devalued and avoided in China. This same relational trend is found in India, Mexico, Brazil, Chile, and other emerging markets where the public is interested in corporate citizenship and companies are seen as critical to economic and social development. By comparison, citizenship is not much of a discriminator in Russia. According to the Reputation Institute’s analysis, it’s not much of a factor in Russian’s decisions about reputation, employment or consumption. Why not? Largely because the great majority of Russians don’t trust corporations and their claims to being good citizens. This negative view of corporate practices and intentions also dampens the relevance of citizenship in the United Kingdom and, to a lesser extent, France and Germany. Some of this can be explained by the stage of economic development in countries, the role historically assumed by companies versus the state, and the particulars of national culture. Take, for example, the question of whether or not multinational companies are good for society. In the U.S., a strong market capitalist country where corporations are neither damned nor praised, public opinion splits roughly 50/50 as to whether or not global companies operate in the best interests of society. In Europe, by comparison, only one in three trust companies in this regard, according to the Reputation Institute. GlobeScan has asked the public around the world what it expects from companies. One poll asked the world, “What is the most important thing a company can do to be seen as socially responsible?” That study found significant differences in priorities around the globe: the United States, Canada, and Brazil put prime emphasis on community involvement; Australia on protecting the environment; and Mexico and China on the quality and safety of products. The most important criterion globally: treating employees well. Despite these regional and country differences, GlobeScan finds that the majority of people in every country it surveys are very interested in “learning more about the ways companies are trying to be more socially responsible.” This runs from a high of 90% in Mexico to 78% in the U.S. to 68% in South Korea to 56% in Russia. The challenge for companies is to communicate credibly about citizenship in countries where there is interest in, but endemic skepticism about, what companies are up to. What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t What’s on the social agenda in the United States? In the United States, an important criterion in the public’s judgments of corporations as citizen’s concerns their support for communities and charity. In its 2006 poll, GolinHarris asked people to rate the three most important types of issues for business to address as a good corporate citizen. The U.S. public rates attention to the environment (ranked #1, #2, or #3 by 47%), education and literacy (40%), and human, civil, and animal rights (35%) as the key issues in good corporate citizenship. When it comes to specific issues to address, the American public also cites disaster relief, product safety, and affordable health insurance as key priorities. How does this match corporate social priorities? The Center’s 2005 survey asked to what extent companies are “acting or supporting action by others” to address a variety of social issues (through their philanthropy, nonprofit partnerships, and business activity). Companies reported that their most significant efforts and investments were targeted to community development (cited by 40%), the safety and efficacy of products (38%), training for the incumbent workforce (36%), affordable insurance (30%), K-12 education (28%), and improving the environment (26%). All of this is very much in line with public expectations. Corporate philanthropy in the United States was estimated at $12.7 billion in 2006, according to the most recent data collected by the Giving USA Foundation, which represents 4.3% of total charitable gifts in the nation. Although this was a decline since 2005, when giving was inflated by funds, goods, and services for disaster relief, more detailed analyses from the Committee to Encourage Corporate Philanthropy (CECP), a forum of business leaders focused on this subject, revealed that a majority of American companies actually increased their overall financial contributions in 2006 and that international corporate giving rose substantially.23 To better understand the nature of this funding and the intent behind it, the Center has partnered with the CECP to analyze patterns of giving in a sample of 75 companies (including thirty in the Fortune 500). Here’s a sample of the findings: • Fortune 500 companies make bigger contributions overall, but smaller companies’ giving represents a larger share of pre-tax profits. • Most of the contributions are in the form of cash (42%), with foundation cash and non-cash contributions coming in just under 30%. BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP • As for budget source, the majority is from corporate headquarters (38.2%), followed by corporate foundations (31.3%) and “all other groups” (30.5% from business units or branch offices). • Some 81% of the companies examined had a formal volunteer program in place for domestic employees, among them paid time off, flexible scheduling, dollarsfor-doers, employee volunteer recognition awards, retiree and family volunteering. Surveys of these companies showed that almost nine in ten had one or more business-related goals associated with their philanthropic efforts. This is a huge jump from two decades ago, when most companies tried to choose areas for their efforts that were distant enough from their business objectives to eliminate the appearance of conflicts or self-interest. Giving professionals cited more than 20 benefits from their engagement with communities, among the strongest being a greater capacity to recruit and retain employees, enhance the brand, develop relationships both within the company and with communities and governments, and smooth expansion into new geographical areas. How is citizenship managed in companies? Surveys have only scratched the surface as to how citizenship is managed in companies. The Center’s 2003 survey, a first exploration of this subject in a national sample, asked large company respondents to answer a few questions about management of citizenship in their firms. The survey found that while the majority of big firms addressed it in their employee communications (64%), public relations (58%), and company mission or vision statements (54%), far fewer incorporated it into the firm’s strategic plans (41%), work unit goals (36%), and manager performance appraisals (18%). And while two-thirds reported that many people in their companies had responsibilities for improving corporate citizenship, few had a process for evaluating its effectiveness in their companies or for measuring the impact on the community or their own bottom line. The Center’s 2007 survey finds only modest progress in managing citizenship across the spectrum of American big business. Slightly fewer than one-half of the big companies in our random sample say that citizenship is an integral part of their business planning process and that they issue a public report on citizenship. As many consult regularly with external stakeholders and their own employees on citizenship matters. To get a better feel for what companies with a track record managing cit- 9 izenship are doing, see the Conference Board’s 2006 survey of medium- to large-size multinationals (a select sample of 198 member companies). This select sample is certainly giving citizenship more of their managerial attention.24 Over 60% say that they have formal programs to manage citizenship and sustainability, and over 75% say that these are important to their Boards and C-suite executives. Nearly half of this sample says that their Boards routinely review citizenship efforts in their companies. And some 71% publicly report on their performance in this arena – a significant increase for businesses documented from many sources. The Global Environmental Management Initiative (GEMI) and Businesses for Social Responsibility (BSR) surveyed 54 business professionals in 2006 from their respective member companies.25 This study provides further evidence of interest in, and professional management of, citizenship, at least among a select sample of firms. The GEMI/BSR survey reports that the CEOs of these companies have made a clear, public commitment to sustainability (72%) and that there is a strong connection between their company’s talk and actual support for CSR (79% say their firm “walks the talk”). Interestingly, over 60% report that CSR is well aligned and coordinated with overall company strategy. Just over half add that CSR is considered in product procurement processes and 46% say it is considered in product designs. There are less favorable ratings of integration of CSR in the company. Just 42% say that their government affairs efforts are aligned with CSR goals and 38% say that CSR in not linked to marketing and brand messaging in their companies. Finally, McKinsey & Co.’s 2007 survey of companies participating in the Global Compact finds that 90% of CEOs are doing more than they did five years ago to incorporate environmental, social, and governance issues into strategy and operations. But gaps are notable: 72% of CEOs agree that corporate responsibility should be embedded into strategy and operations, but only 50% think their firms do so. And six in ten say that corporate responsibility should be infused into global supply chains, but only 27% say they are doing so.26 Details on this broad movement toward managing citizenship more strategically and professionally and toward integrating it into the operations of a firm can be found in Center studies of the “stages of citizenship” and on integrating it into the business.27 This is all part of the going “beyond good company” criteria of citizenship toward a next generation of practice. What’s involved in “Next Generation Corporate Citizenship?” The movement toward “next generation corporate citizenship” takes firms beyond traditional measures of compliance and community contributions to integrating citizenship into the organization and operations and to factoring it into products and services. Surveys show that the public supports this trend. Polls find that the public all over the world says that the best way for companies to make a positive contribution to society is by working to solve a specific social problem, rather than donating monies to charity (although both rank below their primary contribution of developing safer and healthier products and services). What’s involved in next generation citizenship? Global Citizenship. First, it extends citizenship to a global scale. This means applying world class standards to operations and dealings in developing and emerging markets. It also means taking account of social and environmental needs around the world and tailoring actions to local needs and culture and conditions. Global scans and some of the multi-country data collected by the survey houses and consulting firms we have cited here can be especially useful on these counts. Finally, it means factoring social and environmental sustainability into decisions and actions. Increasingly, even small and primarily domestic firms will be expected to “think globally and act locally.” Business Practices and Products. Second, the new movement extends citizenship to the full value chain of firms—from the supply chain to products and services to distribution and recycling. Consider, for example, that surveys show that the affordability of products for poor consumers poses both risks and opportunities for business. The risks factor into the defensive strategies of banks, insurers, big pharmaceuticals, and health care providers that have been pilloried by the public for red-lining and profiteering. Providing affordable loans and insurance products and subsidized therapies are a responsible way of dealing with these threats. On the opportunity side, next generation corporate citizens are opening up “untapped markets” through microlending and devising new business models to reach the bottom of the pyramid.28 In a recent survey by GlobeScan of over 300 experts in the field, just 30% rated strategic corporate philanthropy as effective in achieving the UN’s millennium development goals. By comparison, nearly 75% credited new business models and innovations as either somewhat or very effective. Multi-sector Partnerships. Third, this movement involves multisector partnering to address society’s needs. The public certainly approves of this. On a global scale, NGOs earn far more trust than global companies in both the northern (68 versus 38% are 10 What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t trusted) and the southern hemispheres (63 versus 46%); and in both they are more trusted than national governments, domestic companies, trade unions, and the media.29 Who is most trusted to do what’s right? In the United States, where trust in business in this regard has been relatively constant since 2001, trust in NGOs has increased dramatically (from 36% in 2001 to 54% in 2006), moving well ahead of business. NGOs are now the most trusted institution in every country except Japan and Brazil. In addition, a GlobeScan survey found that the public deems NGOs far more trustworthy than government when it comes to addressing environmental issues (65 versus 16%), human rights issues (69 versus 14%), and health issues (64 versus 17%). What does this mean for a company? GlobeScan finds that 85% of the public reports that its respect for a company would go up if it partnered with a charity or NGO. Furthermore, a growing segment of the public says that a key indication that a company is socially responsible is that it works directly with a charity group or NGO. This perception increased in the United States from 16 to 30% from 2002 to 2005. Business versus government. All of this stress on multi-sector partnering in meeting society’s expectations needs to be considered in the context of tensions in the United States over the role of business and government. The Center’s surveys find nearly all business leaders adamant that corporate responsibility should be a voluntary option of companies, not legislated or regulated by the government. The American public’s view on this is markedly different. The 2007 Fleishman-Hillard/National Consumer’s League survey found that four of five consumers believe that it is “extremely” or “very” important for the Congress to ensure that corporations address issues such as energy, the environment, and healthcare. A majority also agree that firms in certain industries, such as pharmaceutical (cited by 62%), chemical (60%), food (55%), and energy (53%) require more “oversight” by the government. This raises a question about business versus government roles in the United States, and the prospects for cooperation, in the years head. Mindsets of Management. Finally, not discounting the threat of legislation, next generation companies seem committed to embedding citizenship into the mindsets of managers and fabric of their corporate culture. In PwC’s 2006 survey of CEOs, some 81% of more than 1,000 top executives in 50 countries agreed, “my company’s development program focuses increasingly on equipping leaders to take a role in creating a sustainable business environment.” Center surveys and those by others in the next several years will highlight to what extent this is ultimately reflected in company values, practices, operations, and culture. BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP Can surveys help companies to manage citizenship? Many firms today routinely use surveys to assess community needs, gauge the impact of social programs, and increasingly, to tap into the views of employees, investors, and other stakeholders about their social responsibilities and social performance. Nike, as an example, used surveys in the 1990s to scale the public’s reactions to ethical problems in its dealings with its supply chain and to gather opinions from myriad stakeholders. It has since used them to assess the impact of its social programs promoting fitness, including Nike-Go. One Nike-funded study found that, of those who knew about the programs, 69% had more favorable opinions of Nike and 38% felt more inclined to purchase Nike products.30 How important is social responsibility to your customers? Research by British Telecom found that its citizenship activities account for 25% of its reputation among 3,000 customers sampled.31 The company thereupon developed key performance indicators in the social arena and instituted an annual “health check” to review its performance. Surveys can also help a firm to calibrate its cause-marketing and socio-commercial investments. Unilever, for instance, was well aware of how its industry was promoting a “skinny model” body image through advertising and brand promises. Company research found that just 12% of women are very satisfied with their physical attractiveness; 68% strongly agree that the media sets an unrealistic standard of beauty; and 75% wish the media did a better job of portraying the diversity of women’s physical attractiveness, including size and shape, across all ages. These data bolstered the firm’s commitment to launch a campaign to promote “inner beauty” through its Dove brand soaps and shampoos. Advertisements show “real women have curves” and a film documents how fashion models’ appearances are often distorted by photographic software to conform to an idealized but unattainable type. The Dove campaign is carried to schools around the world in a complementary program to promote young women’s self-esteem. On the social marketing front, surveys can also help to identify relevant niches. Certainly citizenship resonates with young people in the United States who, according to Cone Inc. and AMP Insights, constitute the “most socially conscious consumers to date.” In an online survey by these two Boston-based companies, some 61% of 13- to 25-year-olds feel personally responsible for making a difference in the world; 69% consider a company’s social and environmental commitment when deciding where to shop; and 83% trust a company more if it is socially/environmentally responsible. 11 Beyond these niche applications, surveys can also provide broad-based measures of a company’s reputation as a corporate citizen. The Reputation Institute, for example, annually ranks the top 200 among 600 corporate brands studied in terms of their overall reputation among the public around the world and, for a fee, will provide detailed scores for subscales, including measures of corporate citizenship. The top companies in their 2007 reputation rankings were Ikea and LEGO. In turn, GolinHarris ranks the top U.S. brands in terms of perceptions of their corporate citizenship. Top companies in its 2006 ratings were Ben & Jerry’s, Target, and Patagonia. Some companies use the broad data in conjunction with other surveys to flesh out what’s behind their rankings or to assess the implications. A survey by GlobeScan illustrates the need for a more thoroughgoing assessment. For seven years running, this survey house has asked people around the globe to “name a company that you believe is fulfilling its responsibilities to society better than others.” Who gets the most (unprompted) citations in the U.S.? Wal-Mart. Then the pollsters ask who the least socially responsible company is? Wal-Mart again! To sort through the implications, Wal-Mart commissioned a more detailed study of its consumers and discovered that up to 8% of shoppers had stopped patronizing the chain because of its reputation.32 This, alongside data on declining same-store sales, was a stimulus to the company’s makeover. 12 What Do Surveys Say About Corporate Citizenship? What should you know about surveys? While the previous section seems to imply that surveys can be informative, instructive, and useful for companies in developing and assessing their citizenship agenda, they can also be uninformative, downright misleading, and a frightful waste of time and money. Before you engage a polling shop or “roll your own,” consider these five cautionary points: • Be clear on what you want to study. Remember social psychologist Kurt Lewin’s famous adage: “There is nothing so practical as a good theory.” A good survey starts with thinking carefully about and developing a map of what it is you want to study. Your cause-effect map should identify the specific behaviors (or attitudes) of interest, several possible causes, and the potential consequences. Ideally, a survey “tests” your theory. There are, of course, plenty of standardized surveys that purport to measure community needs, stakeholder expectations, even most every aspect of corporate citizenship. Draw from them when developing your own survey or, if you work with a vendor, consider carefully whether or not their instruments address and measure what you think is important. This thinking through will make you smarter about your situation. And most vendors will tailor their surveys to test your thinking or “theory of the case.” • Craft questions that are answerable. Question writing is part science and part art. There are plenty of examples of surveys that include vague questions or have multiple questions embedded in a single one; consider this example from an otherwise reputable survey shop: are (your company’s) executives ethical, honest, responsible, and accountable? And how one might answer: yes, sometimes, for what, and to whom? There are also difficult choices about question wording (is “committed” as agreeable a phrase as “walks the talk”?), response scales (agreeing something is “very” important not the same as rating it a “top” priority?), and the whole layout of the survey (do you favor a logical or random order?). And there are price/performance tradeoffs on web-based, phone, and paper-and-pencil surveys. Experts can be helpful here. A pilot test and actually working through the survey with someone completing it are very helpful too. • Ensure reliability and validity. To make sense of a survey, you need to understand the impact of sample size and composition, the reliability of single questions and groupings of them, and the validity of findings versus, say, what you set out to measure (construct validity) and versus other kinds of measures of the same thing. A citizenship practitioner need not know all the technical features of validating a survey but whomever you work with (in-house or a vendor) should know about these things. And you should know enough to know when the findings are suspect (e.g., apply the “smell” test). • Use multiple measurement methods. Surveys measure some things well and not others. One-on-one interviews, a focus group discussion, and an on-line jam can broaden your study of corporate citizenship, reveal nuances in perceptions and attitudes, and open up whole new questions. These help in building a survey or interpreting the findings. Observations are also a rich source of information. A lot of interesting ideas emerge from “talking the walk.” BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP • Remember correlation is not causation. Mirvis’ studies at Ben & Jerry’s ice cream found that the company’s social mission was a stronger factor in employee commitment than wages and benefits and even job content. This strongly reinforced the value of the company’s social mission. But this finding does not mean that more investment in the social mission would further increase commitment or that the company would keep that commitment should it reduce annual wage increases or put smart people into dumb jobs. Survey analysis shows only that there is an association between sets of attitudes or attitudes and behavior. This point also applies to any conclusions you might read from surveys, such as the idea that, should a firm become a better citizen, it will motivate more of its employees or win more customers and gain public approval. Academic studies, for example, find a generally positive relationship between social responsibility and firm performance. But several of the studies have found a negligible relationship between social and financial performance. The results seem to depend on the industry studied and trends in its sectoral market. Second, it is not clear what causes what: companies with good financial performance, for example, also have more monies—and perhaps mindshare—to invest in CSR-type activities. Hence, it can be argued that good financial performance leads to social responsibility, rather than the other way around. Sorting through all of this, most researchers now see corporate social and financial performance as part of a “virtuous cycle” whereby each reinforces the other. Both kinds of performance, they contend, are a function of good management. 13 Endnotes 1The major polls cited throughout this paper are from a consortium of researchers around the world, the Reputation Institute, RepTrak Pulse 2006: Social Responsibility Report at http://www.reputationinstitute.com; GlobeScan, Corporate Social Responsibility Monitor (2001-2006), http://www.globescan.com; and GolinHarris, Doing Well by Doing Good: The Trajectory of Corporate Citizenship in American Business, http://www.golinharris.com. The Center’s surveys of business leaders include The State of Corporate Citizenship in the U.S.: A view from inside 2003-2004. The State of Corporate Citizenship in the U.S.: Business Perspectives in 2005. (Boston: BCCCC, 2004; 2006). 2Step Up: A Call for Business Leadership in Society, (Chestnut Hill: Boston College Center for Corporate Citizenship, 2006). 3The McKinsey Quarterly. “Global Survey of Business Executives.” (January, 2006). Online edition at McKinsey.com. Cited throughout this paper. 4Millennium Report. (Toronto, CA: Environics, 1999; 2003). 5A 2007 survey by Fleishman-Hillard and the National Consumer’s League adds a twist to American’s views on the corporate role in society. In an open-ended question, a sample of 2,078 consumers said that a company’s primary social responsibility was to communities more so than to employees (as reported by 23 versus 17%). Why the difference between these findings and those of GolinHarris? Three factors are notable. One is timing. In 2006, for instance, the nation was rife with headlines about downsizing and job loss; much less so in 2007. Meanwhile, news about community problems having to do with education, crime, health care, and economy continued at pace. A second factor is question wording: questions about corporate citizenship may elicit different reactions than those about a company’s social responsibilities. Finally, question formatting is key: the Fleishman-Harris survey asked for one open-ended answer about social responsibility that was then coded under themes of community, employees, products and services, and so on. GolinHarris had people “check” the importance of each of these and other aspects of citizenship. Fleishman-Hillard/National Consumer League. Rethinking Corporate Social Responsibility. (May, 2007) Online at www.fleishman.com 6Los Angeles Times. (March, 2004). The fallout on ethics continues. A 2007 Bloomberg/LA Times polls finds that six in ten Americans don’t find CEO to be ethical and eight in ten say that they are paid too much (June, 2007). 7See Antonio Márquez and Charles J. Fombrun, “Measuring Corporate Social Responsibility.” Corporate Reputation Review, 7, 4, (January, 2005): 304-308. 8Hill and Knowlton and Korn Ferry International. “Corporate Reputation Watch” (September, 2003). See also Return on Reputation: Corporate Reputation Watch 2006. http://www.HillandKnowlton.com. 9Sirota Survey Intelligence, http://www.sirota.com. 10Steven Rochlin and Bradley Googins, The Value Proposition for Corporate Citizenship. (Chestnut Hill: Boston College Center for Corporate Citizenship, 2005). 11Cone Inc./AMP Insights. “The 2006 Cone Millennial Cause Study” (October 24, 2006). http://www.coneinc.com. 12New Leaders, New Perspectives: A Net Impact Survey of MBA Student Opinions on the Relationship between Business and Social/Environmental Issues. (San Francisco: Net Impact, October, 2006). 13See Anthony Kleanthous and Jules Peck, “Let them Eat Cake” World Wildlife Fund, (WWF-UK, 2006). 14Timothy Devinney, Patrice Auger, Giana Eckhardt, and Thomas Birtchnell. “The Other CSR” Stanford Social Innovation Review, (Fall 2006) and United Nations Environmental Program, “Talk the Walk” (UNEP, 2005). http://www.uneptie.org. 15C. B. Bhattacharya and Sankar Sen. “Doing Better at Doing Good: When, Why, and How Consumers Respond to Corporate Social Initiatives.” California Management Review. 47/1 (2004): 9-24. 14 What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t 16The 2007 Cone Cause Evolution Survey (July 9, 2007), at www.coneinc.com 17Chris Kelly, Paul Kocourek, Nancy McGaw, and Judith Samuelson, Deriving Value from Corporate Values, (Washington: The Aspen Institute and Booz Allen Hamilton, 2005). 18PricewaterhouseCoopers 10th Annual Global CEO Survey, Was: Within borders Is: Across borders Will be: Without borders? (PwC: 2007). 19The McKinsey Quarterly. “Global Survey of Business Executives.” (March, 2007). 20Scott Beardsley, Sheila Bonini, Lenny Mendonca and Jeremy Oppenheim. “A new era for business,” Stanford Innovation Review, (Summer, 2007). 21Cone Inc. “2004 Corporate Citizenship Study.” (December, 2004). http://www.coneinc.com. 22Regina G. Lawrence. “Framing Obesity: The Evolution of News Discourse on a Public Health Issue,” The Joan Shorenstein Center on the Press, Politics and Public Policy, Harvard University, 2004-5 http://www.ksg.harvard.edu. 23Estimate from The Giving USA Foundation. Giving USA 2007: The Annual Report on Philanthropy for the Year 2006. (New York: American Association of Fundraising Counsel, 2007). 24The Conference Board. Reward Trumps Risk: How Business Perspectives on Corporate Citizenship and Sustainability are Changing its Bottom Line. Executive Action #216, November, 2006. Available at http://www.conferenceboard.org/publications/describe_ea.cfm?id=1237. 25GEMI/BSR. Sustainable Business & Strategy: A View from the Inside. (September 15, 2006). Find at http://www.bsr.org/meta/GEMI_BSRsummaryresults.pdf. 26McKinsey & Co., “Shaping the New Rules of Competition: UN Global Compact Participant Mirror.” (July, 2007). Online at McKinsey.com. 27Philip Mirvis and Bradley Googins. The Stages of Corporate Citizenship. (Boston: BCCCC, 2006); Julie Manga, Philip Mirvis, Steven Rochlin, and Kristin Zecchi. Integration: Critical Link for Corporate Citizenship. (Chestnut Hill: Boston College Center for Corporate Citizenship, 2005). 28John Weiser, Michele Kahane, Steve Rochlin, and Jessica Landis, Untapped: Creating Value in Underserved Markets (San Francisco: Berrett-Koehler, 2006); C. K. Prahalad. The Fortune at the Bottom of the Pyramid. (Upper Saddle River, N.J.: Wharton School Publishing, 2005). 29See Globescan, Report on Issues and Reputation, (2005). 30See Mark Kramer and John Kania, “Changing the Game.” Stanford Social Innovation Review, (Spring, 2006). Online at http://www.ssireview.org/articles/entry/changing_the_game. 31British Telecom, Just Values: Beyond the Business Case for Sustainable Development, (2003). BT.com. 32See Marc Gunther, “The Green Machine,” Fortune, (July 31, 2006). Online edition, http://money.cnn.com/magazines/fortune/fortune_archive/2006/08/07/8382593/index.htm. 33Philip Mirvis. Ben & Jerry’s: Team development intervention (A and B). In A. Glassman and T. Cummings (eds.) Cases in Organization Development. (Homewood, II.: Irwin, 1991). BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP 15 New Book Explores Changing Role of Business in Society Drawing on expertise from Boston College Center for Corporate Citizenship Available December 2007 • www.beyondgoodcompany.com Beyond Good Company: Next Generation Corporate Citizenship Bradley K. Googins, Philip H. Mirvis, Steven A. Rochlin “Beyond Good Company is a thoroughly-researched, eye-opening account of how the best international companies add “happiness maximization” to “profit maximization” and compete on foresight—that is, think ahead about how their products and operations can solve critical societal problems. This book powerfully connects corporate citizenship to business strategy.” Rosabeth Moss Kanter, author of Confidence: How Winning Streaks and Losing Streaks Begin and End, and America the Principled: 6 Opportunities for Becoming a Can-Do Nation Once Again “Even if some would argue that the Golden Age of corporate citizenship is coming to an end, now the hard, competitive slog starts. Business leaders aiming to succeed in complex, dynamic global markets know they have no option but to deal with the 1.0 compliance and 2.0 citizenship agendas. But as Googins, Mirvis and Rochlin - a supergroup in their field - argue, we are seeing the emergence of a 3.0 agenda focusing on repurposing enterprise, on leverage and on the scaling of entrepreneurial solutions for the world's great sustainability challenges. Truly, next generation corporate citizenship.” – John Elkington, Founder & Chief Entrepreneur of SustainAbility and originator of the 'triple bottom line' 2007 State of Corporate Citizenship in the U.S. Report to be released December 2007 Learn what U.S. executives think about corporate citizenship and how it is managed within their companies. The 2007 State of Corporate Citizenship in the U.S. is the only survey that looks at the entire U.S. business landscape—including small, medium, and large companies representing all major industry sectors—to examine the role of business in society. The biennial survey is conducted by the Boston College Center for Corporate Citizenship and funded by The Hitachi Foundation. Highlights of the 2007 survey of 751 executives: Attitudes about corporate citizenship: • 73% say corporate citizenship needs to be a priority for companies • 71% say corporate citizenship should be completely voluntary • 65% say the public has a right to expect good corporate citizenship from companies • 61% say corporate citizenship makes a tangible contribution to business bottom line 16 Key factors that motivate a company to be a good corporate citizen include: • • • • Fits our company traditions and values: 76% Improves our reputation/image: 66% Part of our business strategy: 60% Important to our customers: 53% According to executives surveyed, factors contributing to the growing distrust of corporations in the United States, include: • • • • Excessive CEO pay: 79% Media provides mostly negative coverage: 62% Lack of accountability: 59% Public doesn’t understand what most companies do: 53% What Do Surveys Say About Corporate Citizenship? w w w. b c c c c . n e t The Boston College Center for Corporate Citizenship is a membershipbased research organization associated with the Carroll School of Management. It is committed to helping business leverage its social, economic and human assets to ensure both its success and a more just and sustainable world. As a leading resource on corporate citizenship, The Center works with global corporations to help them define, plan and operationalize their corporate citizenship. Through the power of research, executive education and the insights of its 350 corporate members, The Center creates knowledge, value and demand for corporate citizenship. The Center offers publications including a newsletter, research reports, and white papers; executive education, including three Certificate programs; events that include an annual conference, roundtables and regional meetings; peer-to-peer learning forums and a corporate membership program. www.bcccc.net This piece is printed on Mohawk Via 100% post consumer waste paper manufactured with windpower and is Green Seal and FSC certified. The print facility has a 100% recycling policy and uses UV Environmental Inks with no VOCs. BOSTON COLLEGE CENTER FOR CORPORATE CITIZENSHIP 17 A Working Paper from Boston College Center for Corporate Citizenship What Do Surveys Say About Corporate Citizenship? 55 LEE ROAD • CHESTNUT HILL, MA 02467-3942 • PHONE 617.552.4545 • FAX 617.552.8499 E-MAIL: [email protected] • www.bcccc.net