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30 Mar. 2011 | Comments (0)

A major component of any corporate social responsibility (CSR) program isn’t so much how a company carries out those activities but rather how it communicates it to its many stakeholders. That is one of the main messages in a new Director Notes report called What Board Members Should Know About Communicating CSR. That message is one that resonates with earlier studies from such sources as KPMG International, which periodically produces an international survey of CSR reporting with the latest having come out in 2008. That survey, which tracked reporting trends at 2,200 companies worldwide including members of the Global Fortune 250, surmised among many things that “reporting is more than just a book, website, or data set. It is a continuous process that must involve and reflect the needs of its stakeholders.” “Needless to say, the business returns to CSR are contingent on the stakeholders’ awareness of what a company actually does in this field,” C.B. Bhattacharya, one of the co-authors, said in a press release announcing the Director Notes report. “However, research shows that awareness of a company’s CSR activities among its external stakeholders (including its consumers) or even its internal stakeholders (its employees) is typically low. This represents a major stumbling block in the company’s quest to reap strategic benefits from a social responsibility program.” The Director Notes report, which is co-authored by Shuili Du, assistant professor at Simmons College;  Bhattacharya, associate dean of international relations at the European School of Management and Technology; and Sankar Sen, professor at Baruch College, lists six recommendations for boards when considering CSR communications. The six recommendations issued in the report take into account strategic and reputational risks as they pertain to the various stakeholders (i.e. customers, employees, chain suppliers, etc…). The recommendations ask that boards and management:
  • Seek CSR activities that fit into the business strategy
  • Emphasize CSR commitment and impact to foster consumer advocacy
  • Seek credibility through the support of independent, external communication sources
  • Encourage employee and consumer word-of-mouth
  • Select social initiatives with high-issue support
  • Be mindful of stakeholder perception of business industry
The complete list of recommendations with descriptions and examples is located on page 9 of the report. The report also breaks out examples of message content and message channels for companies to use when communicating their CSR activities. For example, there is a description of the successful Target (Take Charge of Education program) for CSR commitment, where the retailer donates a percentage of purchases made on Target credit cards to K-12 schools chosen by the cardholders. The KPMG survey, which is cited in the Director Notes report, emphasizes the importance of evolving the communications strategies along with the CSR activities themselves. It states, “Integrating corporate responsibility information into annual reports may meet the needs of some stakeholders, but may exclude others. The challenge ahead will be to get the right information to the right stakeholders, and at the right time and in the right form.” “Some of the best-established forums for stakeholder communications include the least utilized for corporate responsibility issues: annual general meetings (AGMs), analyst presentations, and direct interactions with customers. This could be an indication that corporate responsibility is not fully integrated as a priority in a company’s main operations. It may also be a reflection, especially in the G250 population, of a lack of attention paid to environmental risks and opportunities by investors and other providers of capital.”
  • About the Author:Gary Larkin

    Gary Larkin

    Gary Larkin is a research associate in the corporate leadership department at The Conference Board in New York. His research focuses on corporate governance, including succession planning, board compo…

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