An Article from Business Respect, Issue Number 48, dated 26 Jan 2003
By Mallen Baker
We usually report the headline results in brief of the various surveys that give snapshots of changing attitudes to corporate social responsibility. However, with some of the world's most powerful CEOs gathered together at Davos, now seemed like a good time to review the changing attitudes of this particular group.
Hill & Knowlton have recently released a review of the attitudes of CEOs, comparing the views of leaders from the US, Canada, Germany, the UK, Italy, Belgium and the Netherlands. It gives an interesting insight into the messages currently being heard at the top.
Almost at the same time, the official World Economic Forum CEO study has been released. Most of the following comes from the former - with a few observations from the WEF document added at pertinent points.
What do CEOs see as the biggest threat to corporate reputation? CEOs in Belgium had the largest degree of consensus here, with over 70 percent of them seeing criticism in the print or broadcast media as being their biggest threat. Many of the other countries, particularly the UK and Germany focused on allegations relating to product safety as the big threat. CEOs from the US seem to be sleeping quite soundly at night, however, with less than 30 percent worried on this score. Indeed, US CEOs didn't get above 50 percent agreement on any potential threat.
The Boards of
companies in Belgium, the UK, and the Netherlands
are more likely to monitor the effectiveness of corporate reputation management, while only a minority of companies in Germany, Italy, and Canada do so.
Most of the sample seems fairly united about the main objectives for managing corporate reputation - increasing sales. Only in Germany was there a priority that came anywhere close, let alone higher, which was promoting transactions and strategic partnerships. Interestingly, a medium sized minority within much of Europe and Canada are convinced this also feed through into your stock price. Not the Americans, nor the Germans and the Belgians.
Also, nobody had much time for the argument that building credits with the public through your proactive corporate citizenship could pay many dividends if it all goes wrong. 'Helping to withstand the impact of a crisis' scored single figure ratings all round - where it even registered at all. This is one of those key business case lines that clearly hasn't resonated so far.
When it comes to the relative importance of different stakeholders in influencing your reputation, there are results that are both surprising and obvious in equal measure. Far and away the most important are customers - in the 90 percent range for all respondents. Employees are extremely high up there as well, for all countries but Italy for some reason.
Here's where one of the big Atlantic divides come in. US and Canadian CEOs see the reputation of the CEO as a big factor here - 80 and 72 percent respectively see this as a big factor. It is considerably lower rated in Europe, where the cult of personality around the person at the top is rather less pronounced. The influence of Non-Governmental Organisations (NGOs) is put below 20 percent by all, and considerably lower for some.
The surprising point is that the WEF survey differed markedly in some key points here. The role of the customer was nowhere near as highly rated in that survey - just over 60 percent. NGOs, however, were much higher in the pecking order than in the Hill & Knowlton study. Why the disparity? It's worth reflecting that CEOs are not one homogenous group - and those likely to take part in the WEF survey may be considered to represent higher profile international companies used to being the target of NGO activities than the - possibly more representative - group used by Hill & Knowlton. Just a guess.
Across the world, CEOs seem to believe that corporate social responsibility will be more important in the future than now. Generally, to the tune of 80 percent or more. I have always been unimpressed by this figure, that has consistently come through in polls for this audience over the last few years. It doesn't seem to translate into measures of whether these individual CEOs intend to focus more time and resources on it within their own business in the next three years.
What are the aspects of social responsibility that will be most important in the future?
There are some areas here of overwhelming agreement. The treatment of employees is one. High ratings as well for ethical values, and for corporate governance (no great surprise there at this particular phase of history). The lowest scores come for community investment, and for relationships with NGOs. Supply chain relationships also score highly.
The WEF survey suggested that integrating these issues into supply chain management remains something of a minority sport, however. The issue most often built into supplier relationship agreements is the environment, with health and safety close behind. However, even for these issues it is less than 30 percent of companies that currently take action.
Overall, the key messages seem to be that CEOs have developed a higher degree of awareness around the issues over the last couple of years. In some areas, they perhaps remain informed by the shock of recent events, than by an analysis of longer term trends and risk factors.
But I wonder whether the current direction of development for the practice of CSR is as well focused on the key issues of concern - and particularly the key stakeholders of concern - as they might be.
Story link http://www.hillandknowlton.ca/PDFs/press/CRW2002KeyFacts.pdf