Corporate Social Responsibility, Reputation Management And Public Relations

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• Corporate Social Responsibility, Reputation
  Management And Public Relations
• John Paluszek,
• Senior Counsel, Ketchum

Part One of a dialogue at The Institute for
Strategic Communication for Nonprofits American
University May 20, 2004
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I. Defining the Terms

• Corporate Social Responsibility
• A concept whereby companies integrate
  socialand environmental concerns in their
  business operations and in their interactions
  with their stakeholders on a voluntary basis.
  (EU 2001)
• --------------------------------------------------
  -------------
• AKA Sustainable development, corporate
  citizenship, corporate responsibility,triple-bot
  tom-line etc.

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Elements of CorporateSocial Responsibility

• Human rights
• Working conditions
• Equality and diversity
• Consumer protection
• Environment/Health
• Economic development
• Community relations

• Ethical business practices
• Corporate governance
• Lobbying/political influence
• Business role in conflict zones
• Strategic Philanthropy

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I. Defining the Terms

• Reputation Management
• Reputation What people remember and say about
  an organization. What they identify with that
  organization. Sometimes called the corporate
  brand.

Reputation Management Recognition and
consequent policy formation and performance
that reputation can be a key enhancer, a
differentiator, or accelerator for business
results.
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I. Defining the Terms

• Public Relations
• In this discussion, we apply the Grunigs
  Two-Way Symmetrical Model of Public Relations
• Applying research and dialogue to bring about
  changes in ideas, attitudes and behaviors of both
  the organization and its publics i.e.,
  building/maintaining reciprocal relationships.

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Public Relations

• At first, it was
• Heres the message, go deliver it.
• Then it became
• What should the message be?
• Today, more and more, its
• What should we do?
• Harold
  Burson

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II. Some Context

• Evolution of U.S. Socio-Economic System
• 1800 1870 Largely Laissez Faire
• 1870s 1920 Era of the Progressives
• 1900 1920 Trustbusters

• 1930s The New Deal
• The 60s/70s Nader, Enviros, Consumerism
• 2000 Globalization, Governance

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II. Some Context

• Evolution
• Capitalisms most daunting characteristic is
  its ability to co-opt the reforms, even the
  radical changes, of the opponents of the system.
• The late Michael Harrington(Lifelong American
  Socialist)

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II. Some Context

• (1.) Evolution
• 21ST Century Democratic Capitalism ?
• Increased organized public participation in
  public policy formation (NGOs, media, etc)
• Increased public ownership (stocks, bonds)

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II. Some Context

• (2.) Waves of CSR Media Coverage
• First Environment/ Limits 1962-72
• Second Environment/Health 1984-92

• Third Responsible Globalization 1999-2001
• Fourth Corporate Governance 2002-2004

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III.The Case for the CSR Business Model

• There are now compelling reasons why CSR is good
  business as well as socially responsible.

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CSR as a good business model

• I believe in shareholder primacy. On the other
  hand, I firmly believe that, unless you are
  honest and take care of the other stakeholders in
  the business employees, customers, suppliers,
  community
• Charles Elson, Director, University of
  Delaware Center for Corporate Governance

you will never create the profitability for your
shareholders that you are required to under the
law of fiduciary responsibility.
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The 20th Century Linear Business Model

• Social Responsibility
• Costs such as
• New Employee/Workplace Issues
• Environmental Footprint
• Community Relations
• New Age Customers
• Philanthropy
• Government Relations
• Society in General

Maximize Profits, Share Price

So You Can, IF YOU CHOOSE, Address
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The 21st Century Circular, CSR/Sustainable
Business Model
Stakeholder Interested Parties Perimeter
Customers
Employees
Plaintiffs Bar Insurance Companies Government
Maximize Profits
Investors
NGOs Civic Society
Special Investors
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IV. The new challenges for Capitalism

• William Greider
• Socially responsible investing, I believe, is
  the bow wave for a deep change in American
  consciousness.
• Institutional Investors new vigilance
• Interfaith Center on Corporate Responsibility
• Investor Responsibility Research Center

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IV.The new challenges for Capitalism

• The 21st century global challenge
• Let us choose to unite the power 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 future
  generations. Kofi Annan
  Secretary-General of the United Nations

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IV. The new challenges for capitalism

• The 21st century global challenge
• How do we fit into the U.N. Millennium Goals
  (poverty, education, health, resources)
• What is my organizations share?
• What is the nature of its rightful role?
• Examples
• Equator Principles (banks)
• i-community (Hewlett Packard)
• Medicines for the needy
• Extractive industries progress

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IV. The new challenges for capitalism

• The 21st century global challenge
• Responsible Globalization
• Trade (national politics vs free markets)
• Global capital flows
• Multilateral organizations as enablers
• World Trade Organization
• World Bank
• International Monetary Fund
• World Health Organization

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V. Some Relevant Corporate-Reputation Financial
Trends

• Heavy-hitter institutional investors (1.5
  trillion in assets) formed a coalition to
  influence corporate policy on risk management/
  global warming.
• Socially Responsible Investing (SRI) continues
  to grow, generate fair returns, sticky
  investments.
• S P-listed companies with strong CSR ratings at
  least match the index overall

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VI. A selection from the current CSR Potpourri

• Activity on many fronts 50 Web sites
• Globally, CSR is hot
• World Bank Institute Web course Corporate
  Social Responsibility Sustainable
  Competitiveness
• New PRSA Section, Strategic Social
  Responsibility

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VI. A selection from thecurrent CSR Potpourri

• The Conference Board studies Corporate
  Citizenship, Corporate Governance
• Business Ethics 100 Best Corporate Citizens
• Media is getting more interested
• Conferences, conferences, conferences

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VII. CSR Coming Attractions

• Horizon CSR Issues The worlds macro problems
  (UN Millennium goals re health, poverty,
  education, etc.)
• Evolution of new partnering paradigms dual or
  triangular cooperation private sector,
  government, civil society
• World Economic Forum vs. World Social Forum

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VII. CSR Coming Attractions

• International accounting standards
• AccountAbilitys five standards for materiality
  in corporate social reports
• EU and UK governments mandating social reporting

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VIII. Some Relevant Communications Capabilities

• Societal/market/issues research
• Standard and special CSR media relations
• Social (Public) reports
• Dialogue Outreach to critics (NGOs,
  activists) alternative dispute resolution

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VII. End piece

• At the United Nations Global Compact Learning
  Forum, Berlin, 2002
• With the fast-spreading commitment to CSR, a
  case can be made that a fundamental new business
  model one that respects stakeholder and
  shareholder values simultaneously is evolving.

Effective two-way communications is essential
to CSR success.
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Dialogue

• Corporate Social Responsibility
• For real ?
• Forever ?
• For Us ?

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Break
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Corporate Social Responsibility,Strategic
Philanthropyand Partnering

• Part Two of a dialogue at the Institute for
  Strategic Communication for Nonprofits
• American University
• May 20, 2004

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CSR, Strategic Philanthropyand Partnering

• Discussion Outline
• 1. Note universals, but make distinctions
• 2. Match the missions
• 3. Entry points employees, customers, etc.
• 4. Case studies Starbucks, Nokia, Lions Intl.
• 5. Your visibility/ bridging organizations
• 6. Dont just take my word for it (citations)

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1. Universals/Distinctions

• Corporate Universals
• Reputation A recognized corporate asset
• Concept Shareholder as stakeholder
• Philanthropy Becoming more strategic
• Expanding universe Local and beyond
• The sweet spot Business/social progress

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1. Universals/Distinctions

• Corporate Distinctions
• Industry (finance, mfg, retail, mining, etc.)
• Geographic operations
• Tradition/culture
• Corporate budget vs. foundation grants
• Executive/Board composition

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2. Match the Missions
Is Your MatchHere ?

• Company Mission
• IBM Women/minorities
• Intel Employees/Environment
• Cummins Overseas
• General Mills Food/Nutrition

Source KLD Research Analytics/Business
Ethics
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3. Entry Points

• Employees
• Volunteers programs are significant
• Triple-hit for the company
• Longer-range commitments

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3. Entry Points

• Community Relations
• Local
• National
• Global

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3. Entry Points

• Marketing
• Cause-related marketing
• In-kind contributions
• High-end markets, audiences
• Social marketing

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4. Case Studies

• Starbucks
• Mission Champion business practices (for)
  social, environmental, economic benefits for
  communities globally.
• Activities negotiated (not commodity) prices for
  green coffee partner with Conservation
  International supports international development
  projects pays benefits for part-time employees.

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4. Case Studies

• Nokia
• Mission Connect one culture to another, cities
  to villages, society to families, person to
  person.
• Activities Make a Connection with partner,
  International Youth Foundation pioneer in
  management criteria for non-profits.

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4. Case Studies (Non Profit)

• Lions Club International
• Mission Combat blindness
• ActivitiesIn the U.S. Eli Lilly
  Diabetes. Globally Merck River Blindness

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5. Visibility/Bridging

• Visibility
• Proactive, continuous and targeted
• Always on message
• Media Where are the customers?
• Networking

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5. Visibility/Bridging

• Some Key Bridging Organizations
• Business for Social Responsibility
• Center Corporate Citizenship (Boston College)
• United Nations Global Compact
• The Conference Board
• Ethical Corporation (magazine/conferences)
• Public Relations Society of America (SSR)
• World Business C. Sustainable Development

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6. Citations

• The Competitive Advantage of Corporate
  Philanthropy Harvard Business Review, Dec.
  2002
• Corporate Community Engagement in America
  Ethical Corporation, Feb. 2004
• Asking the Do-Gooders to Prove They Do Good
  New York Times, Jan.3 2004
• Is Our Philanthropy Strategic? Center for
  Corporate Citizenship Knowledge Center
• More Radio Stations Embrace Cause Marketing
  Cause Marketing Today, Mar. 2004

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American University School of Communications

• The Institute for Strategic Communication For
  Nonprofits
• May 20, 2004