EMI used to be described as a conglomerate, but over the past eight years it has been re-shaped into a focused entertainment and rental group. Its community involvement has had to reflect this.
Not that many years ago, THORN EMI as well known for its pioneering brain and body scanners and for the Thorn lighting and consumer electronics business, as for its music. Now music accounts for more than half the group profit; EMI not only has some of the biggest star names in the business but also an unparalleled collection of historic recordings and music copyright. The takeover of Virgin Music last year has consolidated this position. Rental forms the other major part of the group offering customers around the world home entertainment and household products.
Focus
As the group’s focus has shifted, and the needs of society altered, so its community involvement activities have changed, particularly the types of charities supported. And while THORN EMI has followed recent trends in offering more in-kind help, especially of employee time, it has not, as others have done, cut small donations to small charities in favour of a few large gifts.
That said, one distinctive feature of THORN EMI’s approach at corporate HQ level is to select a limited number of charitable causes and to offer them intensive support to develop their own capabilities: expert advice on publicity is given; fundraising events are organised and underwritten; office facilities have been provided; and senior executives, notably chairman, Sir Colin Southgate, get involved as patrons or trustees.
Value added
This can be characterised as a value-added approach, recognising that companies can do much more than donate money – through advice, facilities, income generation and contact-making. Charities that have benefited from this approach in the past have been the Save the Children Fund and Home Farm Trust, a national charity proving homes, life long care and work and training opportunities for people with learning difficulties.
Recently chosen for major support are: Blind in Business, a new charity to help blind and partially sighted people develop careers by exploiting information technology and to create greater employer awareness; and CLIC, the Cancer and Leukaemia in Childhood Trust. THORN EMI recently underwrote a gala performance of the West End musical Crazy for You, which raised over £90,000 directly for CLIC as well as publicising the cause.
Policy
Following a review in 1990, THORN EMI at corporate HQ level adopted a defined policy for corporate support. While not mandatory across the whole group, this offers guidelines and examples to THORN EMI businesses, which are encouraged to develop budgets and policies appropriate to their own operations and geographic communities. The only stipulations are that individual donations over £10,000 must be agreed in advance with Director of Corporate Affairs and that political or quasi-political contributions are forbidden.
Currently the priority issues are the r”le of music in the community, education, innovation and the environment, but applications will be considered from organisations working in any of the following fields:
arts – those that promote, enhance or increase understanding of the arts, culture and the humanities;
education and research – those that provide formal qualifications and educational opportunities, including in science and technology;
environment and heritage – those that protect and preserve the environment, including conservation schemes, environmental education and training, and the preservation of wildlife and heritage;
innovation – those that encourage enterprise and create jobs for the young or disadvantaged;
health, welfare and community – organisations addressing a wide range of needs particularly rehabilitation of people with a disability, community centres for elderly and homeless, creches, services for young people and crime prevention schemes.
Areas which the corporate centre does not support are building restoration, expeditions, political causes, religious groups, individuals and sports sponsorship.
Criteria
In addition, organisations must be well run, registered charities. Preference is given to defined projects which offer clear recognition of the company’s input, rather than just general contributions to operating costs. THORN EMI also values projects with an international dimension, in keeping with the nature of a group which operates in 38 countries.
Employees
In the UK, THORN EMI operates a Give As You Earn payroll deduction scheme though the Charities Aid Foundation. Employees at corporate centre can claim pound-for-pound matching for any recognised charity up to the legal £900 pa maximum. In addition, matching for individual fundraising outside the GYE scheme is available up to a £3,000 per employee limit. Funds must be raised directly by the efforts of that individual employee.
Recently, to encourage volunteering, an Employee Volunteering Award has been introduced. Any employee who gives of their time to assist a charity, for example acting as an honorary treasurer or as a school governor, can apply for a grant of £250 pa for their organisation which must be a registered charity. In the rest of the group, it is up to operating businesses to decide whether to implement any of these scheme themselves.
Dilemma
And increasingly this poses a dilemma for many companies. They have small HQs and seek to empower the subsidiaries with as much autonomy as possible. While the senior executives have strong commitment to community involvement, there is no method to enforce implementation lower down the group, other than by example.
The parallel with environmental concerns is interesting: companies are increasingly publishing detailed reports on the environmental impact of their operations. THORN EMI has just made a report publicly available, though annual reporting has been a requirement for the last three years. Targets have been set by the operating businesses which are left in no doubt that this is a major business issue and they must meet them. However community involvement is somehow more nebulous, and companies have generally found that the same sense of importance and urgency is often lacking lower down the group.
Organisation
To implement the policy centrally, the corporate affairs department has one member of staff devoted largely to managing the donations programme and the public relations manager devotes more than a third of her time to community relations. Additional help is available on an ad hoc basis to organise specific events.
With the help of THORN EMI’s management information systems department, this team has developed an in-house computer system to keep track of donations. With the company still offering small donations, the previously manual administrative system was proving cumbersome. Now amounts donated are logged on a central database and coded under each policy heading and by payment method (covenant, CAF voucher, etc), with a forward diary system for future payments. Detailed reports provide an instant snapshot of the programme. For internal and external communications, a community affairs brochure is produced each year. This is included with the annual report for all shareholders.
Challenges
The main task now is to encourage the individual businesses to become more involved, not simply creating budgets to make donations but really investing in projects with in-kind help. To spread the word around the group, a monthly digest of activities is being considered, perhaps through electronic mail to key contacts as corporate press releases are currently distributed.
The question for companies like THORN EMI is this: if community involvement really is a key business issue essential for long term prosperity, how far should senior executives go in turning their personal commitment and example into specific instructions? In the next few years companies may find it worthwhile to examine the different rates of progress with the environment and the community, and see what lessons can be learnt. In the meantime, THORN EMI is making progress with a more voluntary approach on community contributions.
FactFile
THORN EMI plc
year ended 31 March 1993
Chairman: Sir Colin Southgate
Main business: all aspects of the music business through EMI Music and the rental of home entertainment equipment and other products, mainly to domestic customers, through THORN EMI Rental; other businesses include HMV, Thorn Security and Thorn Electronics
Turnover: £4,452 million
Profit before tax: £289.9 million
Employees: 47,000 (27,000 in UK)
FT UK top 500 ranking: 40
Charitable donations: £500,000 (UK only)
Total community contributions: £3 million
% of pre tax profit: 0.5% (UK charitable equivalent); 1.0% total worldwide
Membership: BITC, ABSA, Per Cent Club
Public Relations Manager: Claire Baker
Address: 4 Tenterden Street, Hanover Square, London W1A 2AY
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