Corporate community involvement has proved slow to develop the tools for effective management and external communication. What is being done about it?
Over the last three decades, new management ‘disciplines’ have come of age, in quality, the environment, staff development and corporate community involvement. For most, new standards have been developed along side, such as Investors in People, BS5750, ISO 14000 and so on. But CCI has lagged behind the others in developing these tools to manage internally and communicate externally. We even lack adequate data beyond a simple total for charitable giving and community contribution.
This article reviews the systems these other disciplines have developed, reports on progress in CCI, and recommends an agenda for action to catch up.
But first, why does it matter? Internally, any allocation of scarce company resources needs good management systems, based on the collection of appropriate data, to ensure quality and justify the spending. Is the programme meeting its commercial and community objectives? How much is or should be invested compared to peer group companies? Externally, this data can be used to demonstrate the company is achieving its stated mission. Then if something goes wrong, the evidence is at hand not to make excuses but to demonstrate the problem is an exception, a genuine departure from the norm.
Environment
Adding to established British Standards and the international equivalents, Business in the Environment and SustainAbility are now developing an Index of Corporate Environmental Engagement, designed to gauge the extent to which businesses are gearing up to manage environmental issues. This will allow public comparisons to be made by offering:
a clearer understanding of what companies are doing; and
a tool to motivate companies to improve performance.
The methodology is straightforward. The basic requirements of good environmental management are distilled into a set of parameters. Each is then scored and weighted to provide a total index, updated annually for tracking purposes. Currently the package is being tested in member companies before being used more widely. SustainAbility has also developed guidelines to good reporting practice (see Community Affairs Briefing Issue 11, August 1993).
Quality
The quality movement, too, is coming of age and techniques developed to assess progress. Examples include the Malcolm Baldridge National Quality Award in America, started in 1987, the European Quality Award from 1992 and the UK Quality Award, based on the European model from 1994.
In UK version, nine elements which contribute to business success are monitored, primarily based on self-assessment, but companies wishing to gain public recognition as a quality company through the National Award scheme are subject to external verification.
Investors in People
The same internal/external approach characterises the Investors in People standard, increasingly used by organisations that are serious about investing in their staff capability. Administered and validated by TECs, it tests four elements:
commitment of management;
regular planning and review;
action;
evaluation of achievement and improvement of future effectiveness.
Tomorrow’s Company
The RSA Tomorrow’s Company Inquiry set forth a model for the ‘inclusive’ company and identified that a new measurement framework was needed to support this approach. This should include financial components, but also feed-back on the values the organisation professes, the health of key relationships and performance of important processes within business. The Inquiry recommended follow-on work through a Forum for Business Success to develop new criteria and a new language of success.
AccountAbility
Such holistic, inclusive, measurement and reporting systems are easier to call for than to devise. This has led to increasing interest in social audits, which examine the social and ethical impact of the business from the perspective of all the stakeholders: from inside, assessing performance against its mission statement, and from outside, using comparisons with other organisations’ behaviour and with social norms. Among those who have had social audits conducted are Co-operative Retail Services, Body Shop International and Traidcraft.
The new Institute of Social and Ethical AccountAbility will promote and develop the techniques. It is an ambitious agenda, encompassing the whole business operation. Most community affairs manager will be primarily concerned about their relationships with the local community, how these are managed and what to report externally – although even this is complicated as many companies now seek a link to other stakeholders, such as staff through employee community involvement, and suppliers through partnership sourcing with small and start-up businesses.
BITC: Investors in Community
The need for a recognised assessment approach to enable businesses to develop and improve the quality and effectiveness of their investment in the community has been recognised by Business in the Community. Last year it convened an Investors in Community working group of companies and consultancies, with feasibility funding from the Joseph Rowntree Foundation.
Having examined six possible measurement approaches (informal club/network, Standard of Excellence, Award, Ranking, Index, Kitemark), the Investors in Community group is concentrating on Standards of Excellence. It has examined various assessment options (external auditors, self standards, self assessors, networkers) and is pursuing self-assessment based on external guidelines. However a workable system to assess and report good practice in CCI has not yet been developed, still less tested out. At the same time, other initiatives are exploring various aspects of the same goal.
Aim High
BITC’s education campaign, Aim High, is trying to develop a standard of excellence with OFSTED, covering the planning, management, measurement and evaluation of a company’s education programme. The aim is to include a methodology to measure the company’s contribution to any positive impact on student performance and to devise a self-assessment guide.
London benchmark group
Six companies (BP, NatWest, IBM, Marks & Spencer, Whitbread, GrandMet) have been working with David Logan to benchmark aspects of their community involvement programmes. Topics include spending in total and in parts, applications received, spending on research, publicity and staffing levels. The exercise also assesses the leverage the programme generates, its social impact and business benefits derived. The current intention is to publish the main findings and make recommendations to improve the Per Cent Club guidelines on valuing CCI.
Bruce Naughton Wade
Bruce Naughton Wade is developing an index of corporate community involvement, based on self-assessment through a work-book approach with expert external validation. This will allow comparison between companies on specific topics and overall, and elements considered include purpose and strategy, management and planning, implementation and results achieved.
PRIMA Europe
PRIMA Europe, publishers of Community Affairs Briefing, has developed techniques to measure and report the human resource benefits of CCI. Following a study in 1995, published as Employees and the Community, elements are now being tested by group of 18 leading companies and the results will be published in autumn 1996. This covers:
benefits to individuals;
benefits to companies, in terms of cost comparison and cost benefit analysis;
a methodology to track the impact at a strategic level, with a simple scoring system to produce an index based on self-assessment of the process and the outputs.
Agenda for action
This work does not yet constitute equivalent tools to quality and Investors in People. But sufficient work has been done both within the community affairs world and in related disciplines to make a start on a rigourous system to manage programmes internally and report externally. There should be three elements.
The first is to set a minimum standard, with the starting point as the Per Cent Club 0.5% target. Companies whose three year rolling average community contribution does not meet this threshold two years running should be expelled – then being a member of the Club would mean something again. In fact much of the necessary data is already collected each year; so the submissions of the top 25 companies and a one in ten sample of rest should be scrutinised and the figures for spending and profits plus programme descriptions published in a way to allow comparisons.
The next requirement is a broader range of simple standards to aim for, effectively benchmarking five or six measures. For practical reasons, only the hundred most active companies need be included at the outset. The measures should cover both the scale of activity and its extent or breadth in the company. Possible measures include financial estimates of giving, split between cash, products/services and staff time and split between issues (education, environment, etc), and also numerical estimates of the numbers of staff involved in the different ways (school governors, matched fund-raising, etc).
Companies that want to be among the best would then know what to aim for; pick the measure(s) which best track their own objectives and strive for the upper quartile. Of course, such league tables are always somewhat crude and unfair to some. But they are now an established fact of life in schools, local government and the health service. They are effective spurs to action and help to inform stakeholders.
These two set upper and lower standards and could happen now, resources to compile them permitting. The third element still needs development. This is a full-blown Investors in the Community standard, along the lines of the Investors in People approach, but ideally with less need for external support. This should concentrate mainly on management processes, but also look at effectiveness, comparing inputs with outputs. A basic model could be devised now but must be thoroughly tested and refined before used externally.
So within three or four years, corporate community involvement could have the basic systems and data commensurate with being an established management discipline – if the necessary resources are invested in making it happen, and that must be down to Business in Community. When integrated with the other elements of corporate accountability and reporting, such as finance, environment and ethics, then the vision of tomorrow’s inclusive company will become reality.
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