THE CENTER FOR CORPORATE CITIZENSHIP AT BOSTON COLLEGE55 LEE ROAD • CHESTNUT HILL, MA 02467 • www.bc.edu/corporatecitizenship

GLOBAL CORPORATE CITIZENSHIP:A NEW AGE FOR CHILE AND THE AMERICAS

BRADLEY GOOGINS PhD

EXECUTIVE DIRECTOR

googinsb@bc.edu

August 2003

PartnershipsPlanning CollaborationReciprocity

Legislative InputMutual Education

Home Based Implementation

EvaluationResearch

Public at LargeCorporations as Good CitizensPublic RelationsOutreach

Civil SocietyNon ProfitsNGO’sAdvocatesAcademia

Political SectorPolicy MakersState and

Federal

Economic Sector“Wealth Creation”

Source: Waddock, Bodwell, Leading Corporate Citizens, Boston College

The Economist 09/2000

High Anxiety

Globalization and Corporations

Income disparities, environmental damage, and cultural degradation are pointing the spotlight on companies

Slide courtesy of BSR

Kofi Annan and the UN Global Compact

Kofi Annan, UN Secretary General

“…let’s choose to unite the powers of markets with the authority of universal ideals. Let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of the next generations…”

John Elkington -CEO of SustainAbility

“The speed of globalization often means that companies are moving ahead of the ability of current governance systems to monitor and police. Companies will be expected to fill at least some of the gap.”

Quote from the Novartis Health, Safety Environment Report 2000: Sustainability and the UN Global Compact

“We also want to benefit society through our economic contribution, through the positive environmental and social consequences of our activities and through an

open dialog with our stakeholders.”

Dr. Daniel Vasella, Chairman & CEO, Novartis AG

Quote from the Novartis Commitment to the UN Global Compact - July 14, 2000

What does Corporate Citizenship look like?

Customers

Employees

Environment

LegalGovernment Affairs

Community Involvement

Stakeholder Engagement – The Key

CC

Custom

ers Supp

liers

Communities &

Interest GroupsShareholders

Empl

oyee

s Governm

ents

Issues Driven by Stakeholders

CC

Custom

ers Suppliers

Communities

& Interest

GroupsShareholders

Empl

oyee

sG

overnments

Human

Rights

Transparency

Eco

no

mic

D

evel

op

men

t

EnvironmentD

iversity

Par

tner

ship

s

Sustainable Development

Sourcin

g

Work-lifeEthics

Drivers of the “New” Corporate Citizenship

Government Retrenchment Globalization & The Economic Power of Business New Activism and Compliance Pressures The Rise of Civil Society New Expectations for Business The Business Case The “War for Talent”

The Scope of Citizenship

Identity“Infusing”

corporate citizenshipinto the company

Governance“Integrating”

corporate citizenshipinto the company’s

organizational structure

Practice“Embedding”

corporate citizenshipinto business planning

and operations

Neighbor of ChoiceSM

is a strategy that links business success to corporate citizenship. It is a blueprint for developing, implementing and institutionalizing a corporate-wide community investment strategy. It provides:

•ROI (for the business and community)•Positions the business as a leading corporate citizen•Builds community support for the business

The Neighbor of ChoiceSM Strategy

Vision/Mission: links community & business success

Building relationshipsof trust(identify stakeholders)

Identifying key issues, concerns, and needs•external threats & opportunities

Strategic programs/responses that servecompany and community needs•social investment/contributions•partnerships•volunteerism

source: Boston College CCCR

What is the “community?”

The Corporationin the community

Cyber Community

Employee Community

FencelineCommunity

ImpactCommunity

InterestCommunity

SiteCommunity

Where employeeslive/concerns

Geographical

Immediateneighbors

•Operations•Influence•Exit•Entry

Common interests

Internet

Your goal: build community support

The Corporationin the community

Customer Value add

Employee Value add

ReputationValue add

BusinessValue Add

CommunityValue add

LTO/Regulatory VA

•recruitment•retention•productivity

•regulation•risk reduction•trust

•virtuous circle•investors

•New markets•R&D

•Address problems•Do the “right thing”

•attraction•image•commitment

Be an asset in the community, and the community will be an asset to you...

A Roadmap to Excellence in Corporate Community Involvement

1. Leadership2. Issues Management3. Relationship Building4. Strategy5. Accountability6. Infrastructure7. Measurement

The Standards of Excellence: 7 management principles and practices for creating corporate community involvement excellence.

STANDARD I: LeadershipSenior executives demonstrate support, commitment and involvement in community involvement efforts.

STANDARD II: Issues ManagementThe company identifies and monitors issues important to its operations and reputation.

STANDARD III: Relationship BuildingCompany management recognizes that building and maintaining relationships of trust with the community is a critical component of company strategy and operations.

STANDARD IV: StrategyThe company develops a strategic plan for community programs and responses that is based on mutual issues, goals and concerns of the company and the community.

STANDARD V: AccountabilityAll levels of the organization have specific roles and responsibilities for meeting community involvement objectives.

STANDARD VI: InfrastructureThe company incorporates systems and policies to support, communicate and institutionalize community involvement objectives.

STANDARD VII: MeasurementThe company establishes an ongoing process for evaluating community involvement strategies, activities and programs, and their impact on the company and the community.

The Standards of Excellence in Corporate Community Involvement

Standards of Excellence: Leadership

Company leadership Recognizes strong

community relationships critical to business goals

Endorses and ensures community vision statement

Personal example and involvement

Communicates expectations

Board of Directors is involved

Leading Companies

• SC Johnson Wax• Dayton Hudson• IBM• Merck• Shell• BP Amoco

Standards of Excellence: Strategy

CR strategic plan

– Linked to goals of business units

– Linked to identified issues

– Use variety of resources to respond to community needs, issues, etc.

Communications plan

Leading Companies

• Merck • EDS• Whirlpool• Levi Strauss• Olin• Rockwell• Diageo• IBM• London Benchmarking Group

Leading Companies

• Merck • EDS• Whirlpool• Levi Strauss• Olin• Rockwell• Diageo• IBM• London Benchmarking Group

Standards of Excellence: Issue Management

Company IDs and monitors issues

Stakeholders IDed and defined

2-way system to ID and analyze relevant issues

Early warning system Community issues factored

into business plans

Leading Companies

• Merck• Southland/ 7-11• IBM• Levi Strauss• Wal-Mart• Target• General Mills

Leading Companies

• Merck• Southland/ 7-11• IBM• Levi Strauss• Wal-Mart• Target• General Mills

Standards of Excellence: Relationship Building

Proactive CR-building plan All employees involved Tactics emphasize 2-way

communications to foster trust and credibility

Leading Companies

• Bell Atlantic• Target• Wal-Mart• Merck• State Farm• Ameritech• BP

Leading Companies

• Bell Atlantic• Target• Wal-Mart• Merck• State Farm• Ameritech• BP

Standards of Excellence: Roles and Responsibilities

Clearly defined and articulated

Specific CR department:

– Reports to top level

– Develops CR plan

– Consults with operating units

Impact on communities considered by departments/ units

Leading Companies

• FedEx• IBM•Time Warner• Steelcase• Whirlpool• Honeywell• Target• Monsanto

Leading Companies

• FedEx• IBM•Time Warner• Steelcase• Whirlpool• Honeywell• Target• Monsanto

Standards of Excellence: Supporting Systems and Policies

Cross-functional teams

– Plan community strategies

– Assure cross-functional linkage

– Foster internal communications

– Secure recognition Involve all employees Company-wide communications

Leading Companies

• Merck• Diageo• Arch Chemical• Home Depot• Timberland• Target• NOVA Energy• Texas Instruments

Leading Companies

• Merck• Diageo• Arch Chemical• Home Depot• Timberland• Target• NOVA Energy• Texas Instruments

Standards of Excellence: Measurement

Ongoing process of evaluating CR strategies, programs

Indicators developed for evaluating community priorities

Evaluation results used to make future decisions

Leading Companies

• EDS• Battelle• Diageo• IBM• Pillsbury• London Benchmarking Group• PPL

Leading Companies

• EDS• Battelle• Diageo• IBM• Pillsbury• London Benchmarking Group• PPL

Partnership Building Blocks

Communication

CollaborationCommitment

The Stages of Business and Community

Development

Stage 1: AwarenessTraditional involvement in low- to moderate-income communities. Driven by community relations and philanthropy for community benefit, corporate responsibility and reputation enhancement.

Stage 2: ExperiencePilot initiatives or specific programs designed to produce a clearly identified business and community benefit. Includes strategic philanthropy. Corporate involvement often limited to one or two business units.

Stage 3: IntegrationIntegrated, cross-functionally aligned with supporting organizational structures and systems. Draws on a wide variety of corporate and community resources. Clear business and community value.

Less integrated, informal process

More integrated, formal process

Why Should We Do This?

* Right thing to do* Social mission* Legacy in our community

Dominant Response* Philanthropy* Strategic Philanthropy* Partnership Events

ValueDrivers

ComplianceDrivers

IntangibleDrivers

Market

Drivers* Regulation* Activism* Negative press

Dominant Response* Resistance* Minimum Compliance* Philanthropy

* Social issues influence business (education, community, economic stability, employee safety)* Build reputation and image

Dominant Response* Strategic social investment* Pilot BCD projects

* Location * Customers* Labor* Suppliers

Dominant Response* Strategic social investment* BCD projects* Direct investment

Societal Factors

Motivational Silos

Strategic BCD Framework

Identify Organizational Capabilities Core business resources Core Community Relations resources Community resources

Design a Business and Community Development Strategy Draw on market and societal drivers Balance risks and opportunities Include internal and external partners Improve business performance Supports sustainable community economic development

Identify Issues

Business challenges Societal pressures and opportunities Community needs

Identify Stakeholders

Societal

Market

Internal and External

Success in the 21st Century

Who you are and

what you stand for

are becoming just as important

as the quality of your products and services