Within companies, who should really drive the CSR agenda forward? Is the cult of leadership and the charismatic CEO overstated?
CEOs key to steering CSR
Managers and board members see chief executive officers as crucial to charting their companies¡¯ course and in shaping an emerging global consensus on corporate citizenship. Yet chief executives themselves express doubts about their effectiveness CEOs from the US, Brazil and Europe say their CSR strategies to date have only been somewhat effective, while in Asia- Pacific, they admit to even less success. The findings come from a survey of about 800 CEOs from around the world, issued in January by the Conference Board. The report also finds that:
company traditions and values drive the commitment of half the CEOs to social involvement, cited especially in the US (59%);{/*]
long term investment in society is the next most important driver, cited by one in four overall, more so in Europe (32%);{/*] {*]just over a quarter of CEOs (28%) see better management of external relationships as the prime factor for improving their CSR programmes, with nearly a fifth (18%) pointing at clearer leadership from government.
Full details of the survey are due to be published in mid-March under the title The New Corporate Citizenship. Contact David Vidal, The Conference Board, on 00 1 212 759 0900 (http://www.conference-board.org)
Leaders talk the talk . . .
Chief executives from 36 multinational companies, including Anglo American, McDonald’s, Diageo, Deutsche Bank, Coca-Cola and Siemens, are pledging to take ultimate responsibility for the good citizenship of their companies. Putting their names to a joint statement at the close of the annual Davos meeting on February 4, the business leaders are committing themselves to promote the business case for CSR to employees and investors. The statement is designed to complement existing codes of conduct. Contact Claudia Gonzalez, WEF, on 00 1 917 578 5207 (http://www.weforum.org)
. . . but can they walk the walk?
A survey of almost 1,500 UK managers finds over half identify ¡®inspiration¡¯ as the essential characteristic of business leaders, although only one in ten of those interviewed claims to see this quality in their company’s senior management. Moreover, the findings, released by the Institute of Management on December 4, show only a quarter of companies have systematic plans for leadership development, despite the report showing a clear correlation between such development and growth of financial turnover. Contact Cara Rodwell, IM, on 020 7421 2704 (http://www.inst-mgt.org.uk)
Who has the CEO’s ear . . . ?
Over a quarter (26%) of chief executives are influenced primarily by their consumers when it comes to matters of CSR, according to survey of 1,200 business leaders by PricewaterhouseCoopers. Next are board members (22%) and shareholders (20%), with employees (13%) and managers (11%) holding least sway with the chief executive. The report, released on January 31, also finds seven out of ten chief executives agreeing that CSR is vital to the profitability of any company. Contact John Bunn, PWC, on 020 7213 3279 (http://www.pwcglobal.com)
… could it be the shareholder?
Over two-fifths (43%) of firms with a turnover of over 50 million identify the shareholder as the most important stakeholder, although this figure drops by over a half (20%) when companies of all sizes are considered. The study by the Chartered Institute of Marketing, released on January 22, finds that all of the 550 companies surveyed overwhelmingly prioritise either shareholders or customers over other stakeholders, such as suppliers or employees.
Sector-type adds to company size as one of the key factors affecting the company’s primary stakeholder focus. The customer scores more highly within the retail industry (71%) and nonmanufacturing services (86%), for example, while the financial sector (54%) and distribution sector (40%) continue to look first to shareholders¡¯ interests. Contact Sandra Ingham, CIM, on 01628 427 306 (http://www.cim.co.uk)
CSR superstars
Pasquale Pistorio, the chief executive of the semiconductor company ST, is winner of the prestigious 2001 Tomorrow Environmental Leadership Award. The Italian-born Pistorio launched an aggressive environmental policy in 1993, which has cut electricity use by 29% and water use by 45% and aims to reduce carbon dioxide emissions by 80% by 2010.# Meanwhile, Marilyn Carlson Nelson, chief executive of Carlson Companies, is the second winner of First magazin’s award for Responsible Capitalism, which she was presented with on December 1 for her support of small travel firms after the events of September 11. Contact Benoit de Leusse, ST, on 00 33 4 5040 2430, on (http://www.st.com); Sam Macalus, Carlson, on 00 1 763 212 2477 (http://www.carlson.com)
Business leaders back to University
Senior business men and women are set to bring their business acumen into the world of academia through a new mentoring scheme, announced by the government on December 18. This summer up to 25 business leaders will pair up with vice-chancellors of universities and colleges to share their experience of fundraising, knowledge transfer and regional and local regeneration. The scheme is set to strengthen the commercial links between business and the tertiary sector. Government figures released three days previously show that there were almost 200 spin-off companies from higher education institutions in 1999-2000, roughly two and a half times the average number over the last five years. Contact DFES on 020 7925 6789 (http://www.dfes.gov.uk)
EFQM in Northern Ireland
Seagate Technology Media won a special award at the Northern Ireland Business Excellence Awards on January 28 for the management of its social impacts – one of the key performance criteria measured within the European Foundation for Quality Management model. Business in the Community Northern Ireland, which represents 200 business members in the country, sponsored the award and was itself presented with the Mark of Excellence for its application of the EFQM model. Contact Gillian McKee, BITC, on 028 9041 0410 (http://www.bitcni.org.uk)
Editorial Comment
News that yet another group of business leaders had issued yet another ringing declaration, this time at the WEF New York meeting, will have brought a wry smile to seasoned practitioners. Declare today, go home tomorrow. Back next year for another call to action, precious little changed meanwhile. CSR managers can get a little cynical at the tendency of their bosses to hobnob with HRH, through the good offices of BITC and IBLF, while they are left doing the grunt work.
And yet there is something important here. It is no less true for being constantly repeated – we live in an increasingly complex world. The pace of change is bewildering. We want prosperity and the good life now, and a sustainable future for our children. Few of us seem prepared to face hard choices.
Understanding these trends and making such choices are what leadership is all about… giving shareholders the returns the market demands, while meeting the expectations of the other stakeholders too. Holding the vision of a long-term strategy while coping with short-term changes. Above all, articulating the values and principles that should drive the business forward.
Few chief executives are in the position of Anita and Gordon Roddick (who have just announced their retirement from day-to-day management of The Body Shop), personifying the business as founders with a sense of purpose. Most come up through the system, chosen because they are good at delivering on the numbers. Big names like GE’s Jack Welch were supremely successful at that. But leadership today demands more: people like BP’s John Browne, both delivering the returns and trying to lead in a new direction.
Their term of office is often short, the challenges long term and deepseated; the test of success whether they can internalise the commitment. That’s why systems such as the EFQM quality model are so important. And that’s the legitimate criticism of CEO declarations such as the latest from the WEF: just 50 words on the need for internal performance management and measurement mechanisms in a 3,000 word statement.
Reputation
BP is most respected ‘green’ company
Representatives from business and nonprofit organisations agree that BP best manages and effects environmental resources, although they fail to agree on which other companies manage their environmental impacts well (see table below). It is the first time that a question on environmental management is included in the annual FT/ PricewaterhouseCoopers survey of the World’s Most Respected Companies, which was published on December 12. Contact Melanie Morrison, PWC, on 00 61 2 8266 2111 (http://specials.ft.com/wmr2001)
Indian CSR survey
Brand recognition and quality of service are more important drivers of reputation in India than social or environmental responsibility, according to the first ever survey on the subject. The survey, published by TERI-Europe in early January on the basis of interviews with over 1,200 executives, workers and members of the public, also finds that: less than a quarter (23%) of business executives believe it is the role of companies to help solve social problems, as compared to nearly seven in ten of the general public; all sectors agree the information technology sector best fulfils its social responsibilities, followed by the telecommuncations and pharmaceutical industries; Coca-Cola, Unilever, Sony, Johnson & Johnson, Pepsi, Procter & Gamble, and Nestlé are most regularly cited as the most responsible international companies. Contact Ritu Kumar, TERIEurope, on 020 8947 9145 (http://www.teriin.org/teri-eu)
Teenagers opt for blue chips …
When asked to choose from a list of 21 companies, one in five sixth-formers say they would most like to work for British Airways, followed by Rolls Royce (10%), BT (7%), Shell (5%), Marks & Spencer (4%) and Vodafone (4%).
Based on a sample of 550 students, the Church Schools Company survey identifies BT as the company that gives most to society. However, British Gas and Consignia, which rank two and three in the January survey according to their social contribution, came in the top third of the least attractive companies to work for. The survey also shows that a company’s ethical stance has less influence when choosing an employer than job type, business area, salary and career prospects. Contact Charlotte Rendall-Shore, CSC, on 01832 735 105 (http://www.church-schools.com)
. . . as do the US public
Johnson & Johnson, Microsoft and Coca-Cola enjoy the best reputations of the 60 most ‘visible’ companies in the US, according to a survey by Harris Interactive, released on January 16. The rankings are based on the responses of over 10,000 people, who were asked to judge the companies according to six criteria; products and services, financial performance, workplace environment, social responsibility, vision and leadership, and emotional appeal. Contact Nancy Wong, Harris Interactive, on 001 585 214 7316 (harrisinteractive.com)
Spotlights on energy industry
Powergen has the highest rating for social and environmental responsibility in the international electricity and gas supply industry, according to a survey by German research firm, Oekom. The report, released in early December, identifies Centrica as having the most impressive social policies and performance among the twenty companies surveyed.
Meanwhile, Shell and BP are identified as having the most developed approach to CSR management within the oil and gas sector by a recent Cooperative Insurance Society survey, published on January 24. The CIS report suggests US companies Exxon-Mobil and ChevronTexaco are the industry’s chief laggards. European companies such as TotalFinaElf and Norsk Hydro ranked above their US counterparts, although they failed to match UK companies – particularly on human rights issues. Contact Marnie Bammert, Oekom, on 00 49 89 5441 840 (http://www.oekom.de); Carolyn Hicks, CIS, on 0161 837 4912 (http://www.cis.co.uk)
Best companies to work for
Morgan Stanley and Pret A Manger rank in the top ten European companies to work for, as decided by Fortune Magazine (see table, below). The findings, published in Fortune’s February edition, are based on the feedback from a wide range of opinion formers from business, academia and student groups. Contact Terry McDevitt, Fortune, on 00 1 212 522 7149 (http://www.fortune.com)
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