Upload
shona-wheeler
View
215
Download
0
Tags:
Embed Size (px)
Citation preview
Framing the Debate on “Doing Good”
Dr. Charles J. FombrunExecutive Director
The Reputation Institute
Santiago, Chile26 September 2005
2
© Reputation Institute 2005
Is CSR Subversive? Happy Birthday, Mr. Friedman !
"The Social Responsibility of Business Is to Increase Its Profits.”Milton Friedman, 1970
“I have never known much good done by those who profess to trade for the public good.”
Adam Smith, 1776
3
© Reputation Institute 2005
But the Public Supports View that Companies have Social Responsibilities
U.S. Netherlands Denmark Italy
Generate profits for shareholders 1% 1% 3% 6%
Responsibility to shareholders
AND employees and customers
56% 45% 42% 25%
Shareholders, employees,
customers, plus broad social
responsibility
43% 51% 51% 66%
Source: Harris Interactive & Reputation Institute, 2003-4
4
© Reputation Institute 2005
Target Corporation: Strategic Philanthropy
5
© Reputation Institute 2005
Home Depot: “A Month of Service” 50,000 Employees, 2 million hours of Community Service
6
© Reputation Institute 2005
GE’s Ecomagination: Environmental Solutions
7
© Reputation Institute 2005
IBM: On Demand Community –Technology Solutions
8
© Reputation Institute 2005
Wal-Mart’s Good Works
10
© Reputation Institute 2005
World Business Leaders for Growth
Founded by:
– Business Council of Australia (Australia) – Business Roundtable (United States) – Canadian Council of Chief Executives (Canada) – Consejo Mexicano de Hombres de Negocios (Mexico) – The European Round Table of Industrialists (Europe) – Nippon Keidanren (Japan)
Agree on S.E.E. Initiative
11
© Reputation Institute 2005
Better Business and a Better World:CEOs Adopt Business Strategies and Projects That Benefit Society, Environment and EconomyBusiness Roundtable Launches "S.E.E. Change" Initiative to Spur Sustainable Growth
“Businesses are in business to generate growth, but sustaining growth is more complicated. The purpose of S.E.E. Change is to urge companies to adopt business strategies and projects that are good for the environment and society – and good for their bottom line.”
Charles O. Holliday, Jr., Chairman & CEO, DuPont
“Our stakeholders – investors, employees, customers, suppliers, and the people in the communities where we live and work – want to know how we are performing in each sphere of sustainability: social, environmental and economic. It is our belief that the best companies are able to perform well in all three and that doing so is critical to their own sustainability.”
Andrew N. Liveris, President and CEO, Dow Chemical
“Our commitment to S.E.E. Change can be summed up in three words – Responsible, Transparent and Accountable. It is a strategy that builds business value while paying dividends to our shareholders, our environment and our society.”
Steve Odland, Chairman & CEO, Office Depot
12
© Reputation Institute 2005
But the Public is Ambivalent about Corporate Communications of CSR
January 16, 2002
13
© Reputation Institute 2005
Wal-Mart Watch…
14
© Reputation Institute 2005
Efforts to Assess ‘Reality of Corporate Behavior’ has led to Regulatory & Voluntary Standards as well as ‘Social Audits’
15
© Reputation Institute 2005
CSR is a Key Part of Creating Economic Value and Stakeholder SupportWhen it’s Done Right, it Builds Reputation & Financial Results
CorporateStrategy
CorporateStrategy
BusinessActivitiesBusinessActivities
FinancialResults
FinancialResults
StakeholderSupport
StakeholderSupport
CorporateReputationCorporateReputation
CorporateCommunication
CorporateCommunication
The Business CycleThe Business Cycle
The Reputation CycleThe Reputation CycleCSR
Initiatives CSR
Initiatives
16
© Reputation Institute 2005
Employees• Social Performance on Job Attractive Positive• Social Performance on Work Motivation Positive
Yes, A Positive
Relationship
Environmental Performance• Environmental Ratings on Profits Positive• Environmental Awards on Market Value Positive• Pollution Output on Market Value Negative
Philanthropy• Donations on Market Value Positive• Contributions & Advertising on Sales Positive
Community• Responsibility Rankings on Profits Positive • Long-term Investors on KLD Index Positive •
Research Shows that CSR is Linked to Financial Results
17
© Reputation Institute 2005
Consumer Research tells us that CSR Affects their Perceptions of Companies
18
© Reputation Institute 2005
Products &Services
.56
And Indicates that Perceptions of CSR Drive Reputation
FinancialPerformance
.07
Vision &Leadership
.17
WorkplaceEnvironment
.34
EmotionalAppeal
SocialResponsibility
.40
.63
19
© Reputation Institute 2005
`̀CorePurpose
Values
ExpressionsImages
Reputation
Identity
But CSR Only Works When Linked to Core Purpose and Competencies of Company, not just PR
Is CSR activity authentic & credible?
20
© Reputation Institute 2005
So CSR must be Strategic…
MoralPillar
EconomicPillar
CommunityPillar
• Be Authentic• Address a Social Problem• Draw on Core Competence
CorporateReputation
21
© Reputation Institute 2005
International Issues
Work Environment
Local Community
Issues
National Social Issues
1
2
3
4
Leverages Employee Pride
…As Well as Be Appropriate to the Situation
22
© Reputation Institute 2005
“Experience tells us that sustainable business practices are not only socially responsible but financially smart”.
Anne M. Mulcahy, Chairman & CEO, Xerox
“We believe in ‘doing well by doing good’.”
Steve Odland, Chairman & CEO, Office Depot
Happy Birthday, Mr. Friedman! But You’re Wrong…