Corporate Citizen Magazine Vol. 4

Boston College Center for Corporate Citizenship • Issue 4

The Corporate Citizen Getting to the roots of success Making it your business to make it all personal A tough job gets easier Finding value in virtue

Learning, Practice, Results. In Good Company

The Corporate Citizen Out front

Features

2 From the publisher

7 Making it your business to make it all personal

3 Generations work it out 3 Community effort

11 social reporting: Getting a clear picture 16 The questions at hand Competencies 26

4 A moral argument for measurement

19 stakeholder engagement: Local faces and global reputation 24 Corporate citizenship snapshots

5 serv-a-palooza

26

6 Financial turmoil took toll on corporate reputations

Cover story Getting to the roots of success: The leadership competencies that grow corporate citizenship pros

Local faces 19

31 A tough job gets easier 36 The Net effect: Building real relationships in real time 42 unfamiliar adventures serve valuable lessons 47 Finding value in virtue

Volunteers 31

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Boston College Center for Corporate Citizenship

What does it take to excel?

Here at Boston College our motto is “Ever to Excel”. But in any endeavor, corporate citizenship included, excelling isn’t something that just happens.

For a long time, corporate citizenship’s motto was closer to the Nike slogan “Just do it.” Well, the days of just doing it and expecting to succeed are over. Success in corporate citizenship requires asking important questions about what we are doing: Why are we doing it? How should we do it? Where are we doing it? What happens when we do it? Are there better ways to do it? Who are we doing it for? How do we tell people what we are doing? What do people think about what we are doing? Who should be doing it and what does it take for them to do it well?

In this issue of The Corporate Citizen we look at some of these questions and see what companies, experts and researchers are finding for answers.

Our cover story, “Getting to the roots of success”, presents the results of a Boston College Center project to develop a leadership competency model for corporate citizenship that identifies the core competencies necessary for corporate citizenship leaders to succeed.

“A tough job gets easier” on Page 31 looks at the results of a study of successful employee volunteering programs that maps out a guide for companies to improve their programs. In our story on Page 19 about global reputation and stakeholders, we learn what researchers have found when asking how corporate citizenship efforts are perceived in different countries and what that means for companies’ reputations in those various locales.

“The questions at hand” tells how companies can use a simple tool to help practitioners ask the difficult questions that start conversations and spark new thinking about corporate citizenship. On Page 7 we get advice from author and consultant Dev Patnaik on how seeing the world through others’ eyes helps companies and corporate citizenship professionals ask better questions about what they are doing and how it relates to the lives of consumers and other stakeholders. “The Net effect” on Page 36 examines the new ways companies are developing two-way relationships that both improve communication about corporate citizenship initiatives and collect genuine feedback from stakeholders of all types.

The Corporate Citizen Boston College Center for Corporate Citizenship

Publisher Peggy Connolly Editor Tim Wilson Art Director sharon sabin Contributing Writers Valerie Berezin Bea Boccalandro sylvia Kinnicutt Philip Mirvis Ph.D. Colleen Olphert Chris Pinney susan Thomas Conference Manager emily Weiner Accounting Christine Ryan The Corporate Citizen is published annually by the Boston College Center for Corporate Citizenship, a research center at the Carroll school of Management, Chestnut Hill, MA 02467.

617-552-4545. www.BCCorporateCitizenship.org. Copyright ©2010.

Postmaster: send address changes to The Corporate Citizen, Attn: Josefina Chacon, 55 Lee Road, Chestnut Hill, MA 02467-1717.

As you read this issue of The Corporate Citizen, I hope it provides answers and raises questions, since the more we ask the more we learn. And as a wise person once said, “the only dumb question is the one you don’t ask.”

Acting director, Boston College Center for Corporate Citizenship 2 The Corporate Citizen issue 4

www.BCCorporateCitizenship.org

Learning, Practice, Results. In Good Company

Generations work it out A generational collision is under way in the workplace that may soon rival the 1960s clashes between the children of pre-war and post-war America. The long-haired, tie-dyed baby boomers who drove their own parents crazy are now sharing office space with the tattooed, nose-pierced members of Generation Y they spawned. The resulting dynamics are interesting to say the least.

A recent study by Boston College’s Sloan Center on Aging & Work finds that rather than a generation gap forming between cubicles, there may be hope for bridge building that unites complementary generations. The study explored how economic concerns have affected employees’ workplace experiences and how changes differ by employee age and perception of job security. Sloan Center researchers found that the members of Generation Y – workers ages 26 and younger – reported the greatest decrease in engagement, while engagement remained virtually unchanged for 43-year-oldplus baby boomers. And decreased engagement was almost non-existent for employees over 53.

So what happened to the stereotypes of gung-ho, tech savvy millennials and jaded curmudgeon baby boomers who just punch the clock? “Some older workers have seen it all, and that gives them experiential resilience,” Marcie Pitt-Catsouphes, director of the Sloan Center, told Diversity Inc. “Younger workers just don’t have the depth of experience, which leaves them feeling less engaged in their jobs.”

Community effort One of the earliest approaches to coordinated disaster response was the bucket brigades of colonial America. When a fire started, people turned out with buckets and formed lines from the blaze to the town well. Today we’re seeing a new version of the bucket brigade that connects a global community to those who need help.

When an earthquake struck Haiti the business community responded immediately. An example of how companies joined with competitors on a rescue mission was seen in the Boston College Center’s online Member Community. Center members formed a virtual bucket brigade, trading ideas on how to respond to the quake, from suggestions for supporting employees with family affected by the disaster to sharing tips on how to set up an employee donation page.

The buckets of today’s brigade were filled with funds rather than water but the concept remains. Disaster response is more effective when members of a community work together.

But Pitt-Catsouphes is quick to point out that employers shouldn’t rush to make AARP membership a requirement at hiring time. She notes that “younger workers bring energy, enthusiasm and idealism. In a workplace where older and younger employees work side by side, the give and take between young and old is a valuable resource employers should leverage to survive the downturn.”

It seems that like putting the White Album from the Beatles on an iPod, bringing generations together can make beautiful music. n

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Boston College Center for Corporate Citizenship

A moral argument for measurement

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s it ethical to refuse a child tutoring services in order to produce a report on the effectiveness of the tutoring? Should resources be diverted from programming to measurement when there are more children to serve, families to help, problems to solve and an otherwise overwhelming number of unmet needs?

A hospital would not purchase and install MRI machines before being reasonably certain they will work and help doctors save lives. But when it comes to corporate citizenship, companies invest in initiatives but are hesitant to spend a meaningful portion of a project’s budget on evaluation. Ensuring corporate citizenship

If actions speak for themselves, then corporate citizenship professionals have answered a resounding “NO!”

If a program is designed to employ the homeless, it is a managerial and moral obligation to know that it increases the chances of employment before it is offered to thousands of individuals.

Because it means fewer resources for service delivery, they have long refused to invest in measuring social impact in a way that tells whether a program generates the ultimate community change it purports to generate.

Faced with zero-sum funding decisions, corporate citizenship managers overwhelmingly choose more people served over more knowledge gained. Virtually every corporate citizenship program supports services but few know whether those services make an impact.

So does that make it ethical to enroll underprivileged children in a program that may or may not effectively address their needs?

Studies from the past five years indicate no more than half of nonprofit services generate the change they seek. By refraining from impact evaluation corporate citizenship professionals tacitly accept that half of their companies’ social sector investments are unproductive and that it’s OK to remain in the dark as to which half.

Forgoing impact evaluation in favor of delivering services is shortsighted. It’s a commitment to activity, not to change.

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actually works should be the first order of business even if – for a period of time, at least – it swallows a considerable amount of corporate citizenship resources.

The purpose of corporate citizenship initiatives should be clear and there should be accountability for their performance. A shelter program intended to bring the homeless in from the cold need only know that people are sheltered and warm to determine its success. But if a program is designed to employ the homeless, it is a managerial and moral obligation to know that it increases the chances of employment before it is offered to thousands of individuals.

Impact evaluation is not a luxury. It is a neglected necessity that can elevate corporate citizenship to unprecedented efficacy and higher moral grounding.

– Bea Boccalandro

www.BCCorporateCitizenship.org

Learning, Practice, Results. In Good Company

Putting theory into practice There comes a time when you’ve got to walk the talk and that time came last fall for staff at the Boston College Center.

About a dozen Center staffers traveled to Portsmouth, N.H., to volunteer as part of Timberland’s 12th annual serv-a-palooza, its worldwide community service initiative. Along with employees from Home Depot, Bank of America and City Year volunteers, the BC crew stepped out from behind their desks, got dirty and helped revitalize the seacoast YMCA, one of 154 projects in more than 24 countries involving 3,800 volunteers and more than 30,000 hours of service. Work included planting trees, building picnic tables, installing insulation, clearing a trail and completely revamping the buildings front facade, garden and patio. it’s nice to talk and write about community service and stakeholder engagement but doing it firsthand makes it real. Participating in the serv-a-palooza allowed the Center to leverage its own human assets to improve just a little piece of the world.

Boston College Center for Corporate Citizenship

The CSR Index Top 20 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Company Walt Disney Company Microsoft Google Honda Johnson & Johnson PepsiCo General Mills Kraft Foods Campbell soup Company Fedex uPs Toyota Apple Berkshire Hathaway Costco Wholesale Colgate-Palmolive Cisco Procter & Gamble Levi strauss Kimberly-Clark

Corporate Social Responsibility Index (CSRI) 79.52 78.66 77.03 76.65 76.57 76.00 75.95 75.94 75.26 74.87 74.84 74.41 74.22 73.81 73.77 73.56 73.47 73.40 72.67 72.66

Financial turmoil took toll on corporate reputations

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pheaval on Wall Street had the same effect on a survey looking at corporate citizenship and reputation as companies in the financial sector tumbled to the bottom of the Boston College-Reputation Institute 2009 CSR Index while top consumer brands perceived to be strong in the area of ethics, citizenship and workplace practices dominate the top 50.

The 2009 CSR Index found the Walt Disney Company in the top position followed by Microsoft, Google, Honda of America, Johnson & Johnson, PepsiCo., General Mills, Kraft Foods, Campbell Soup Company and FedEx, rounding out the top 10.

rector of research and policy at the Boston College Center. “To build a reputation as a leader in corporate social responsibility, companies should focus on strong governance practices, positive working conditions, and a commitment to supporting the needs of communities and the environment.”

The CSR Index is created using data collected for Reputation Institute’s 2009 Global Reputation Pulse Study. Researchers use a subset of survey results that focus on more than 200 companies with a dominant presence in the United States and believed to have a reasonably high recognition factor with the general public. The data captures public perception about a company’s corporate citizenship, governance and workplace practices in the United States.

A summary report on Corporate Reputation and Social Responsibility Rankings is available at www.BCCorporateCitizenship.org.

“A company’s reputation today goes beyond products, services and financial performance,” added Kasper Nielsen, managing partner of Reputation Institute. “Organizations face increasingly higher expectations from the general public across the different aspects of their business.”

About the CSR Index and Global Reputation Pulse 2009 Study The Global Reputation Pulse Study was conducted online between January and February of 2009. The CSR Index is a combined measure of the public’s perceptions of citizenship, governance and workplace practices obtained from a representative sample of at least 100 local respondents who were familiar with the company.

Scores range from a low of 0 to a high of 100. n

“While the overall reputation of the American business sector has been tarnished with a broad brush, many individual companies still stand out as responsible leaders in the eyes of the public,” said Chris Pinney, di-

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Making it your business to make it all personal How empathy helps companies connect successfully

By Susan Thomas

Since its founding in the 1970s, gardening tools company Smith & Hawken has consciously worked to stay close to gardeners. The company has a large garden at its headquarters, and everyone in the company is required to take rotations working in the garden, hoeing, shoveling and weeding. This is dirty, backbreaking work, but it helps the entire organization develop a better gut sense for how real gardeners view the world. Instead of spending money on focus groups, people at Smith & Hawken spend their time becoming more like the people whose business they depend on.

Smith & Hawken practices what Dev Patnaik calls empathy – the ability to step outside of yourself and see the world as other people do.

Boston College Center for Corporate Citizenship

Organizations of all kinds prosper when they tap into the power of empathy. When people inside a company develop a shared sense of what’s going on in the outside world, says Patnaik, they see new opportunities faster than their competitors.

Patnaik is the author of “Wired to Care: How Companies Prosper When They Create Widespread Empathy” and founder of Jump Associates, a consulting firm that helps companies innovate. A trusted adviser to senior executives at some of America’s most admired companies, including General Electric, Nike, Procter & Gamble, Target and Hewlett-Packard, Patnaik has worked with these companies and others to identify new markets, reinvent existing categories and define new products and services.

When people in an organization develop a shared and intuitive vibe for what’s going on in the greater world, they’re able to see new opportunities faster than their competitors. Being in touch with customers and their reality gives them those insights long before that information becomes explicit enough to read about in the Wall Street Journal, says Patnaik. They have the courage of their convictions to take a risk on something new. And they have the gut-level intuition to see how their actions impact the people who matter most: the folks who buy their products, interact with their brand, and ultimately fund their 401(k) plans.

That intuition transcends what’s traditionally referred to as market research. A widespread sense of empathy starts to influence the culture of a place, giving it a sense of clarity and mission. Empathy can even start to ensure more ethical behavior in a way that no policies and procedures manual ever could.

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But modern capitalism has systematically sought to suppress our need to connect with other people, notes Patnaik. People in corporations can have empathy, but we’ve spent years telling them to check it at the door.

Anyone who comes close to thinking less in terms of marketing demographics and more in terms of real people is likely to hear the terse reminder: “It’s not personal, it’s just business.”

Even those in corporate citizenship have tried for years to do just that: to speak the language of business, to make corporate citizenship less about the bleeding heart, and more about the contribution to the bottom line.

But perhaps those in corporate citizenship are precisely the ones who can help their companies become “wired to care.”

As Patnaik sees it, more people in corporations should ask themselves the question already posed by many corporate citizenship practitioners: “If it isn’t personal, why am I doing it?”

Says Patnaik, “That is, at the end of the day, what this is about. We are all too smart, too inspired, and too capable to devote our lives to building companies that would deny our humanity. The opportunity for the 21st century is to create sustainable businesses that thrive because they are as personal and human as the people who work in them.” n Susan Thomas is the assistant director for web and electronic communications at the Boston College Center for Corporate Citizenship. She keeps the Center wired to care through its online Member Community at www.BCCorporateCitizenship.org/membercommunity.

www.BCCorporateCitizenship.org

10 Tips for creating widespread empathy 1. Start at the top: Lead by example and turn senior leadership into Chief Empathy Officers.

2. Gather tour guides: Use customer insight professionals as coaches, not gurus.

3. Hire your customers: Make some of the folks you want to connect with part of the team.

4. Get outside: Skip the next focus group and go hang out where customers actually live and breathe.

5. Cover the walls: Plaster your cubicles and hallways with constant reminders of the outside world.

6. Look the part: Stop dressing to impress and start dressing like your customers.

7. Talk the talk: Trade in your shop talk and insider lingo for the language that your customers use.

8. Use the same stuff: Use the products that your customers use, whether they’re your own or not.

9. Ditch the PowerPoint: Replace flat descriptions with rich experiential media about real world people.

10. Build it into your bonus: Forge an unholy alliance between customer insights and human resources.

Boston College Center for Corporate Citizenship

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Social reporting: Getting a clear picture

By Valerie Berezin

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ransparency is recognized as a core component of corporate citizenship and social reporting has largely become the preferred vehicle for communication about corporate citizenship. The number of reports has grown exponentially in recent years, and companies are devoting extensive time and resources to make their reports more useful both to external stakeholders and their own internal management systems. KPMG’s recent survey of corporate responsibility reporting found that nearly 80 percent of the world’s 250 largest companies produce a report.

Despite the growth in reporting and the significant resources dedicated to producing these reports, key questions about the process require further exploration: • • • •

Why do companies decide to report?

What information should reports contain?

How do companies prepare a report?

Do reports help companies engage with their stakeholders?

• Does reporting lead to managing what you measure?

• Where do companies find value in reporting?

To answer these questions, the Boston College Center for Corporate Citizenship’s Institute for Responsible Investment examined the experiences and practices of seven companies in preparing social reports. That examination forms the basis of an overview report and case studies on each of the seven companies, chosen to represent different industries, geographies and experience in reporting. The companies that participated in the project were: Baxter International Inc., Gap Inc., Nestlé, Novo Nordisk, Seventh Generation, State Street Corporation and Telefónica, S.A.

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Learning, Practice, Results. In Good Company

This research focused not on the social reports themselves, but rather on the process and outcomes of reporting: how companies prepare the reports, the effects of reporting on management practices, the changes companies expect to make in the future, and the lessons learned along the way. The researchers’ goal was to find whether and how companies found value in the reporting process, and whether and how their reports create value for internal and external readers.

The Value of Social Reporting Lessons learned from a series of case studies documenting the evolution of social reporting at seven companies

In general, the momentum for reporting has been driven by external stakeholders, government agencies, multistakeholder initiatives and leading companies. It is the combination of communication and the performance management aspects of reporting that make it a unique tool for promoting good corporate citizenship. The report provides greater awareness of the opportunities to engage with multistakeholder groups to achieve common objectives, as well as the risks associated with failure to engage and document performance transparently.

With a wide range of stakeholders interested in companies’ activities, there is a recurring problem of identifying an audience for reports, and deciding on content.

Some audiences are interested in detailed information about specific topics, while others prefer a more holistic perspective on the company. Some audiences prefer stories and discussion of issues facing the company, while others want quantitative performance indicators and goals.

When deciding how to balance these competing demands companies use a range of tools including internal discussion, stakeholder engagement, mapping key corporate citizenship risks and opportunities, and linking to internal priorities. The emergence of common standards, such as the Global Reporting Initiative, and increasing innovation among corporate peers, were also key references for companies determining content.

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All of the participating companies wrestled with the problem of balancing content for different audiences, and for the different internal purposes of communication and performance management. One common concern was that reports had too broad a focus, and strayed from the key issues and information that companies and their stakeholders could use to best assess their performance. No company was entirely comfortable with the content of its report.

Preparing a social report is no small task. For each of the companies involved in the study, having a dedicated team or staff member to coordinate the reporting process was essential. Starting early and budgeting more time than might originally seem necessary were consistent suggestions. The process of gathering and verifying data is painstaking, especially for companies in the early stages of reporting.

Most companies are designing new systems and networks to obtain data for the report. The majority sought ways to automate reporting and create information management systems that allowed more effective data analysis. Creating these systems meant engaging with employees who were not otherwise involved in managing corporate citizenship issues, such as those in sourcing, legal, marketing and human resources. Providing information for the report creates additional work for these people. Despite initial push back, however, they came to see the reporting process as an important opportunity to build a wider group of internal corporate citizenship champions.

As companies gained experience with reporting, the challenge became institutionalizing the process. For this reason, contributors were chosen based on functional roles rather than through personal networks.

Each company experimented with external assurance of the report, and all worried about the cost in time and resources devoted to assurance. But the process was seen as a source of feedback on systems for data col-

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Learning, Practice, Results. In Good Company

lection, helping to make them more robust. It was also seen as a way to give comfort to internal and external stakeholders on the accuracy of information.

Companies view the reports as tools to engage with stakeholders. They are frustrated by the lack of response and feedback on reports, but find the reporting process, and the end product, to be a platform for dialogue with groups ranging from civil society to public agencies to consumers. The reports helped create credibility for more substantive dialogue, despite the common complaint that reports can be viewed as selfserving marketing more than substantive support.

The report itself cannot foster a lasting dialogue with stakeholders. It is one tool in the process, which helps identify key issues and allows for a view of corporate citizenship practices over time. But companies found the report itself – as opposed to the process of preparing it – played a relatively small role in the stakeholder engagement practices most valuable for the company.

Companies saw potential in the reporting process to create a de facto performance management system.

By identifying key material issues, creating a system to gather performance data on those issues, and integrating the reporting process across departments, the report could help change behavior.

In practice, however, companies found the reports had not yet fully developed such a system. Many felt they were in the early stages of the process, still identifying key issues and metrics. Performance measurement and the institutionalization of goals and targets against those metrics were seen as a next step along the reporting path. There was also widespread recognition that the report should not drive strategy and that the process itself will not drive change. Companies realized the report is only a repository of information and a process of data-gathering that must be used by management for performance to improve.

over time, a report can play a vital role in supporting improved corporate citizenship performance by establishing a benchmark for internal and external stakeholders to hold companies accountable against. Improving corporate citizenship performance, however, is not about having a good social report. Instead, a social report must reflect what is going on in a company.

Unless companies strike a balance between the communication and performance management aspects of the report and reporting process, the report risks becoming disconnected and less relevant and credible to stakeholders. Companies must ensure that the report content reflects their key corporate citizenship priorities, which is only possible with a strategic approach to identifying and managing corporate citizenship. Although the report can be used as a tool to address stakeholder concerns in the short term, an ongoing report process demands companies also address longer term, systemic issues to ensure it remains a relevant tool.

Ultimately the report should be seen as a means, rather than an end. Having an award-winning social report will not in and of itself improve relationships with stakeholders or improve corporate citizenship performance. These objectives are driven by a demonstrated commitment to addressing corporate citizenship issues in a strategic manner. A report can, however, create a foundation for engaging with stakeholders and build a framework for managing corporate citizenship. n Valerie Berezin is a research associate with what is now the Initiative for Responsible Investing, located in The Hauser Center for Nonprofit Organizations at Harvard University.

The key elements of a report are that it 1) describes performance, 2) requires measurement and 3) tracks the evolution of corporate citizenship over time. And

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Learning, Practice, Results. In Good Company

Are You in Good Company?

To learn more about membership and management programs:

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as of 3/25/10

Our members believe they are in good company. Because they are.

AAA of Northern California, Nevada & utah Abbott Laboratories Accenture adidas America Administaff Adobe systems incorporated AMD Advent software inc.

Aetna inc.

ACs Agilent Technologies, inc.

Agrium inc.

Air Products & Chemicals inc.

Alcoa inc.

Alliance Data Allstate insurance Company Alpina Productos Alimenticios sA Altria Client services inc.

AeP American General Life Co. American Water Amerigroup Corporation Ameriprise Financial inc.

Amway Corporation APCO Worldwide Apollo Group inc.

Applied Materials inc.

ARAMARK APs AstraZeneca Canada inc.

Atlantic LNG Company of Trinidad & Tobago AutoTrader.com Avista Corporation BAe systems inc.

Bank of America Baptist Memorial Health Care Corporation Barclays Bank PLC Battelle Baxter Healthcare Corporation BC Transmission Corporation Bechtel Group, inc.

Best Buy Company inc.

Black & Veatch Corporation Blackbaud inc.

Blue Cross Blue shield of Louisiana Blue Cross Blue shield of Massachusetts Blue Cross Blue shield of Michigan Blue Cross Blue shield of Minnesota Blue Cross Blue shield of North Carolina Blue Cross Blue shield of Rhode island BMC software The Boeing Company Booz Allen Hamilton The Boston Beer Co. Boston scientific Corporation BP Brady Corporation Bright Horizons Family solutions Brookhaven National Laboratory Brown-Forman Corporation Bush Brothers & Co. bwin interactive entertainment AG CA inc.

Campbell soup Co. Capital One Financial Corporation

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Capital Power Corporation Cbeyond inc.

CeMeX Cenovus energy CenterPoint energy Central Arizona Project CGi CH2M HiLL Charles schwab & Co. inc.

Chesapeake energy Corporation Chevron Corporation Children’s Hospital - Boston Choice Hotels international CiGNA Corporation Cincinnati Children’s Hospital Medical Center Cisco systems inc.

Citrix systems inc.

Clorox Company The Co-operators Group Ltd. Coast Capital savings Coca-Cola Company Comcast Corporation Comerica Bank ConAgra Foods inc.

ConocoPhillips Canada Consumers energy Corning incorporated Cox Communications inc.

Cox enterprises, inc.

Crayola LLC CsC CsX Corporation The Dannon Company inc.

Dean Foods Company Dell inc.

Delta Dental of Massachusetts Devon energy Corporation DirecTV inc.

Distrigas of Massachusetts LLC Dow Chemical DTe energy Dunkin’ Brands inc. e.ON us eaton Corporation eBay inc. edison international eTs eli Lilly & Company eMBARQ enbridge inc. enCana Corporation endo Pharmaceuticals ePCOR erie insurance Company ernst & Young LLP esL Federal Credit union exelon Corporation expedia inc. experian exxon Mobil Corporation Fannie Mae Farm Credit Corporation Fedex Corporation Fidelity investments Florida Hospital Fluor Corporation Ford Motor Co. FPL Group inc.

Franklin Templeton investments Freddie Mac Freeport-McMoRan Copper & Gold inc.

Genentech inc.

General Dynamics is&T Group General Mills

Genzyme Corporation GlaxosmithKline The Goodyear Tire & Rubber Co. Grand Circle Corporation Great River energy The Great-West Life Assurance Company Green Mountain Coffee Roasters Griffin-Hammis Associates, LLC Halliburton Co. Harlequin enterprises Ltd. HCA Healthcare inc.

Health Care service Corporation Heineken usA inc.

The Hershey Company HP Hitachi America Ltd. Hoffmann-La Roche inc.

Honda Hormel Foods Corporation Humana inc.

Huntington Bancshares inc.

Hyundai Motor Company iBM idaho Power Company iDeXX Laboratories independent Order of Foresters iNG Americas intel Corporation interfaith Medical Center interGen investors Group iron Mountain inc. iTT Corporation JetBlue Airways Corporation JM Family enterprises, inc.

Jockey international, inc.

John Hancock Financial services inc.

Johns Manville Juniper Networks, inc.

Just Born, inc.

Kaiser Permanente KBR inc.

Keiser university Kilpatrick stockton LLP Kimberly-Clark Corporation Kohl’s Corporation KPMG LLP Kraft Foods, inc.

Legg Mason inc.

Levi strauss & Co. LexisNexis Liberty Global Limited Brands Liquidnet Holdings Lockheed Martin Corporation Luck stone Corporation MAC Cosmetics Major League Baseball Manpower inc.

Maritz Marriott international inc.

Mars North America Marsh & McLennan Companies MassMutual Financial Group MasterCard international Mattel inc.

McDonald’s Corporation The McGraw-Hill Companies Medtronic inc.

Merck & Co. inc.

MGM Grand Detroit Michigan Automotive Compressor inc.

Microsoft Corporation MidAmerican energy Company MillerCoors Millipore Corporation Minnesota Power inc.

Missouri employers Mutual insurance Mitsubishi international Corporation Mitsui & Co. (usA) inc.

Mohawk Fine Papers, inc.

Monster Worldwide Morgan stanley Motorola MsC industrial supply Co. National Credit union Foundation National Gas Company of Trinidad & Tobago Ltd. National Grid National instruments Nationwide Mutual insurance Company Nestle Waters North America NetApp Nevada Power Company New Balance Athletic shoe, inc.

Newell Rubbermaid Co. Nexen inc.

Northeast utilities Northern Trust Corporation Northrop Grumman Corporation Northwestern Mutual Novartis Pharmaceuticals Corporation Novo Nordisk A/s Office Depot OG&e ONeOK inc.

OppenheimerFunds, inc.

Oracle Corporation Orange & Rockland utilities inc.

Orrick, Herrington & sutcliffe LLP Pacific Gas & electric Company Pacific Market international PTC Pearson PLC Perkinelmer inc.

Pfizer inc.

Piper Jaffray & Co. Pitney Bowes inc.

Playboy enterprises inc.

PNM Resources Port of Oakland Portland Trail Blazers Premera Blue Cross PricewaterhouseCoopers LLP Progress energy ProLogis Prudential Financial inc.

Raytheon Company RBC Royal Bank of Canada Rei Red Hat Reebok international Limited Reynolds American inc.

Ritchie Bros. Auctioneers Robert Half international Rockwell Automation Rockwell Collins Rothstein Kass sabre Holdings sRP samsung Group sanofi-Aventis u.s.

sAP America sCAN Health Plan sCANA Corporation scripps Networks interactive inc. sempra energy shell Oil Company siemens Corporation southwest Gas Corporation spectra energy sprint Nextel sPX Corporation starwood Hotels and Resorts Worldwide inc. state Farm insurance Companies state street Corporation suncor energy inc. sunoco inc. symantec Corporation synopsys inc.

Talecris Biotherapeutics Target Corporation TD Bank Financial Group TeLus Tennant Company Teradata Teva Pharmaceutical industries Texas instruments incorporated TiAA-CReF Timberland Company Time Warner inc.

TJX Companies, inc.

Toronto Hydro Corporation Toyota Motor Corporation Transamerica insurance & investment Group TransCanada Corporation The Travelers Companies Trend Micro Tyco international (us), inc. uBs investment Bank umpqua Bank unboundary underwriters Laboratories inc. united Health Group incorporated The united illuminating Company united Launch Alliance uNuM Group uPs us Airways Group, inc. us Bank usT Global Vectren Corp.

Verizon Communications inc.

VHA inc.

Visa inc.

Vulcan Materials Company Waggener edstrom Worldwide Walgreen Co. The Walt Disney Company The Warranty Group inc.

Waste Management Waters Corporation Wells Fargo Western Health Advantage Western union Whirlpool Corporation Xcel energy

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Boston College Center for Corporate Citizenship

The questions at hand

By Emily Weiner

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here are some inherent traits that go along with being a corporate citizenship practitioner. Typically, people in this field are outgoing, highly connective and strong with interpersonal relationships. But even veteran practitioners can struggle to get the conversation started from time to time – especially when the issues at hand can be tough to put into context.

District of Columbia, Kaiser Permanente relies on local Green Teams to help implement environmental programs and generate ideas for new initiatives. Green Teams are peerdriven groups of doctors, nurses, administrative personnel and anyone else who wants to ensure the facility operates with the environment in mind.

At the 2009 International Corporate Citizenship Conference, the Boston College Center launched its In Good Company TableTopics cards, a series of 40 open-ended questions designed to spark conversation around the broader role business plays in society. Company representatives immediately went back to their offices and began using these cards to help facilitate meetings and open up dialogue among teams.

Recently, Joe Bialowitz, environmental stewardship project manager at Kaiser Permanente, brought together a group of internal consultants to the local Green Teams and used the In Good Company TableTopics cards as an engaging way to break up the daylong meeting and spark new thinking. While the consultants to the Green Teams have an obvious focus on environmental sustainability, Bialowitz wanted to make sure they understood this focus within

Kaiser Permanente is an integrated health care organization headquartered in Oakland, Calif. With more than 1,000 facilities – including hospitals, outpatient clinics and office buildings – spread out over nine states and the

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Shuffling the deck Dinah Waldsmith Dittman, national director of community relations at Kaiser Permanente, saw great potential in the in Good Company TableTopics cards as soon as she heard the idea. An instrumental partner in the development process, Dittman joined the Boston College Center for Corporate Citizenship in initial meetings with TableTopics inc. and helped get the new product off the ground.

the need for corporate citizenship-related conversation. she drew on her experiences in having conversations with leaders at Kaiser Permanente. “each had a different vision of what corporate citizenship was and what aspects they were responsible for,” she explained.

Dittman had her own methods of sparking dialogue and trying to align those conversations with the company’s operations. But she was interested in tools that could help her gather perspectives in an engaging and non-judgmental manner. “i liked the idea

“The act of someone being listened to and really heard – we know the value of that.”

While the Boston College Center had the content and experience to co-create the product with TableTopics, Dittman was able to provide a customer perspective that reaffirmed

of TableTopics cards because they would pose intellectually stimulating questions that people could respond to and warm up with,” Dittman said. “You could talk about the ‘it’ by talking around it.”

The cards provided a broad base of questions that could appeal to employees at all levels. And the deck of cards provides a useful medium without being cumbersome. “These TableTopics cards are an easy way to start a conversation about something pretty complicated,” she commented. “The questions are thought provoking.”

Kaiser Permanente was so energized by the launch of the in Good Company TableTopics that it hosted the in Good Conversation Lounge at the Boston College Center’s 2009 international Corporate Citizenship Conference in san Francisco. This area was designed to facilitate networking and conversations among the diverse attendees. Open throughout the conference, the lounge was frequently staffed by Kaiser Permanente employees helping to distribute the TableTopics and spark conversations with attendees.

Dittman thought that the in Good Conversation Lounge and TableTopics support would be a different way for Kaiser Permanente to demonstrate its leadership in the field of corporate citizenship. Most importantly, Dittman wanted to provide a method for people to hear what one another is thinking. n — Emily Weiner

Boston College Center for Corporate Citizenship

the framework of the company’s broader commitment to healthy communities. “The cards opened up the conversation about what the priorities are,” he said.

Bialowitz divided the Green Team consultants into smaller groups and gave each of them six cards to discuss. The small groups then reconvened as a larger group to discuss the most interesting or provocative answers that emerged during the exercise. The end result was a new perspective for everyone in the room, not just on environmental stewardship, but on overall social responsibility as well.

“Is corporate citizenship a part of your values system?” When talking about this card, Bialowitz recounted, “Most said ‘yes, we have a clear social mission to improve the health of our members and the communities we serve,’ but it’s good for them to re-engage with that.” And when asking, “What grade would you give your company as a corporate citizen?” Bialowitz noted that “many people were surprised by the wide range of responses and the thoughts behind those responses.”

Kaiser Permanente saw immediate value in these conversations and is looking to further benefit from this new method of engagement. Each Green Team consultant recently received a set of TableTopics cards to use at the local level, giving them another tool to help advance environmental initiatives throughout the organization.

Bialowitz and Kaiser Permanente see the Green Teams as “part of developing leadership within the organization, to elevate them and help them succeed.”

To help build a culture of lifelong learning among his team, he uses weekly team meetings to work on integrating new concepts and for moments of reflection. He structures the meetings to ensure members of his team “connect not just about the context of what they do, but [also] share the milestones and accomplishments.”

The TableTopics cards were the perfect tool to get the conversation going and form bonds on his team. Niessen took a different twist on these conversation starters – he decided to use them at the end of every meeting. “I like to have a moment where we reflect on why we’re here for the business,” he remarked.

Niessen has methodically worked through the deck, one meeting at a time, placing a check mark next to each question to be sure he doesn’t repeat one too quickly. All of the questions have been helpful in stimulating new ideas, providing inspiration and facilitating the connection between team members.

Some of the cards have helped the group learn as much about the company as they have about each other.

“What is the greatest opportunity for the business?” According to Niessen, this question was “particularly great” because they were able to get their new employees more familiar with the larger business objectives and operations. To help fuel team members’ personal and professional passion for their jobs, he tackles such questions as, “Where and when do you get your best ideas?”

TransCanada Corporation is an energy company headquartered in Calgary, Alberta, with operations throughout Canada and the United States. As the company has expanded, so have its corporate citizenship efforts. Jamie Niessen, manager of community investment, has used cards to keep his team connected and focused.

TransCanada added new employees and shifted internal staff, which left Niessen to head up a team of people who didn’t have strong connections to one another.

As the team members have grown into their respective roles, Niessen has worked hard to provide a fun and positive environment. He’s found “multiple levels of benefit” to these ending conversations, and his team looks forward to these occasions to talk about big challenges and opportunities just as much as he does. “Everyone thinks our jobs are so great,” he said. “I always tell everyone that if you have to do a job, giving away money is a great thing to do. But you have to step back every now and then and take a look at what you’re doing and why you’re doing it.” n

Niessen has long recognized how easy it is to become bogged down in the details and mechanics of a job.

Emily Weiner is the conference and event producer for the Boston College Center for Corporate Citizenship.

18 The Corporate Citizen issue 4

www.BCCorporateCitizenship.org

Learning, Practice, Results. In Good Company

M

any practitioners have built

a business case for corporate citizenship or corporate social responsibility based on its link to reputation. Transparency, social reporting, cause–related marketing, eco-friendly ingredients and product packaging, as well as employee volunteerism and ethically minded leadership all contribute to the CsR/ reputation equation. Perhaps the most vital element in building corporate repu-

Stakeholder engagement: Local faces and global reputation

By Philip H. Mirvis, Ph.D.

The Corporate Citizen issue 4

tation is stakeholder engagement, as it can: 1) guide choices about a company’s portfolio of social and environmental investments and 2) visibly convey that the enterprise is interested in its customers’, employees’ and other stakeholders’ points of view.

The world’s most progressive companies in corporate citizenship, including Royal Dutch Shell, Novo Nordisk, IBM, Unilever, General Electric, BBVA and others have developed a core competence in stakeholder engagement. They regularly consult with relevant interests, experts and concerned citizens on key issues pertaining to community needs, environmental challenges, human rights and socioeconomic development.

Doing CSR on a global stage adds complexity to this work. Should, for example, CSR policies and practices based on laws, customs and expectations in the United States and Western Europe be extended to operations in Eastern Europe, Asia and Latin America? Should

www.BCCorporateCitizenship.org 19

a company invest added resources in workplace improvement versus community programs in, say, Brazil and China; and how about in pro-environmental versus good governance initiatives in Korea, Mexico and the United States?

The answers hinge on corporate values, codes of conduct and strategic priorities. And on what specific stakeholders -- governments, NGOs, opinion leaders and so on -- have to say. But estimating how much these investments could pay off in reputational gains is also an important consideration. It helps to know what is most relevant to consumers, employees, and the public at large when it comes to corporate citizenship and corporate reputation in different nations.

For the past two years the Boston College Center for Corporate Citizenship and the Reputation Institute have partnered to understand public perceptions of CSR globally and at the national level. Their joint report, “Building Reputation Here, There and Everywhere”, presents findings on the public’s attitudes

20 The Corporate Citizen issue 4

about the CSR performance and overall reputation of more than 600 corporations in 27 countries.

The report presents tested guidelines on building a CSR strategy with stakeholders that improves corporate reputation. What follows is a glimpse at how survey data can inform and improve CSR and reputation management at several stages in the process.

Measuring reputation and CSR performance The “Building Reputation” research team used the public’s ratings of seven dimensions of corporate conduct and the reputation overall of highly visible corporations in each of the nations studied. Researchers combined data on how the public rates a company’s 1) social and environmental performance, 2) ethics and governance, and 3) workplace practices to create a CSR Index score for firms in each nation. They then looked at the relationship across countries between ratings of CSR and overall reputation. This made it possible to determine to what extent CSR is a driver of reputation in different countries.

www.BCCorporateCitizenship.org

Learning, Practice, Results. In Good Company

Diagnosing stakeholder expectations Face-to-face stakeholder consultation is core to determining what’s most relevant to corporate constituents and to deciding what to invest in, how much and where. But global scans and multi-country data sets can be useful in seeding consultations and helping practitioners estimate what kinds of CSR investments might best improve their reputations.

keters and country managers as they probe consumer sentiments in their regions and consider the rise of ethical consumerism overall.

Identifying national performance gaps One key to improving CSR performance and reputation is locating and closing gaps between expectations and performance. Polling data on national expectations of

In one of its annual surveys, the Reputation Institute asked to what extent people would “prefer to work for a company that is known for its social responsibility.”

On average, two-thirds of those polled would “prefer to

Face-to-face stakeholder consultation is core to determining what’s most relevant to corporate constituents and to deciding what to invest in, how much and where. work for a company that is known for its social responsibility.” The highest interest was shown in Norway, South Korea, Germany, Finland, Denmark and Poland -- all highly industrialized countries. Less interest, by comparison, was found in the United Kingdom, United States, Mexico, France, India and Australia, based on globally adjusted scores. These data illustrate the importance of stressing CSR in corporate-wide employee recruitment and retention strategies and for emphasizing it even more so in select markets.

How about consumers’ interests in CSR? On this point, RI data show that, on average, roughly 40 percent of consumers have personally “refused to buy the products of a company that was not socially responsible.”

Consumers most apt to make this claim are found throughout Scandinavia and in South Korea. Consumers in Japan, the United Kingdom and United States are in the middle of the pack on this dimension. Relatively fewer in South Africa, India, Mexico and Chile say they have boycotted a product because of CSR issues. These data provide a conversation point for mar-

The Corporate Citizen issue 4

business and ratings of its performance can serve as a wake up call about the relative loss of trust in business in select regions. Or it can signal CSR challenges in entering new markets or not keeping pace with changing expectations in established ones.

In one of its Global Pulse studies, Reputation Institute asked the public to what extent companies should: 1) provide assistance to local communities where they operate; 2) be concerned about the well-being of their employee; and 3) not support initiatives that are unethical, even if they are legal. The research team combined these expectations to compute an overall CSR expectations index.

The general expectations of business in countries were than compared with ratings of the performance of specific companies on citizenship, governance and the workplace. In ranking across the nations, several high expectation versus low performance gaps stand out:

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Boston College Center for Corporate Citizenship

• Germans’ expectations about the workplace (7th) versus low corporate ratings (24th) • Argentine’s expectations about citizenship (7th) versus low corporate ratings (26th) • South Koreans’ expectations about governance (8th) versus low corporate ratings (24th) • Australians’ expectations about all aspects of CSR (2nd) versus low corporate ratings (26th)

In Denmark, France, Finland and South Korea, by comparison, CSR is a very strong driver of corporate reputation but companies don’t score as highly on their CSR performance. In these nations, firms are not capitalizing on the power of CSR to positively drive their reputation. Their challenge is to improve their CSR performance and its visibility to an interested public.

The same is true in Argentina, Chile and Australia.

Obviously, these would be target areas for CSR activity for companies in these nations. In other countries, there is more alignment between expectations and per-

Testing if CSR investments improve corporate reputation

One key to improving CSR performance and reputation is locating and closing gaps between expectations and performance.

formance – for better and worse. For instance, there are lower expectations and lower performance ratings for CSR in China, Mexico and Chile, mid-range scores on both in France, Poland and Brazil, and slightly higher scores on both in Japan, the United States and Canada.

How does this factor into corporate reputation?

Taking actions that drive reputation The data collected on how nations rate CSR performance of companies and its relative importance as a driver for reputation helps compute the CSR/reputation equation for different nations. There are, for example, a set of countries where companies are rated comparatively high on CSR but where it is not a particularly strong driver of corporate reputation. Firms in India, Japan, the United States and South Africa, among others, are not capitalizing on the strength of their CSR performance in their overall reputation.

In these nations, concerted work on communicating about CSR is needed to help the public “connect the dots” to reputation.

22 The Corporate Citizen issue 4

The research team is testing these ratings and the power of these relationships globally and at the national level over multiple years. In the 2009 study, for example, the measure of corporate ethics and governance is a more significant driver of reputation than citizenship globally (a switch versus 2008). This put renewed emphasis on corporate transparency and investments in good governance.

Multiyear data on CSR and reputation overall can help a company on a global and local basis continuously calibrate and adjust CSR investing. Moreover, company-specific data can be used to “check” whether a program of investments in, say, the workplace or community have yielded higher ratings from the public (and among specific stakeholders) on these dimensions of CSR performance. Company-specific data can also be used to “test” whether or not improved ratings on CSR have translated into reputational gains.

Select companies, working with the Reputation Institute, are using a team of CSR specialists, corporate brand and reputation managers, and HR heads to digest these data globally and in particular national markets. These analyses yield answers to important strategic questions for companies: Are our CSR investments registering with the public? To what extent are we improving our reputations through CSR? And, in consultations with our stakeholders, are we finding how to better meet their needs and maximize our returns? n Philip H. Mirvis is the author and principal investigator of the Boston College Center for Corporate Citizenship and Reputation Institute study.

www.BCCorporateCitizenship.org

Boston College Center for Corporate Citizenship

Corporate citizenship snapshots The latest edition of the Boston College Center survey The state of Corporate Citizenship in the united states looks at the attitudes and actions of CeOs related to corporate citizenship and also provides insight into the effect of the global financial meltdown on corporate citizenship.

Titled “Weathering the storm�, the survey explores in greater depth the challenges of integrating corporate citizenship into the business and how tough economic times have impacted these practices. The 2009 edition is also the first time the biennial survey explored how executives view new public policy challenges and their reaction to public expectations for better regulation of business.

Learning, Pract

ice, Results. In

Good Company

Weathering th e sto

The State of Cor

rm

porate Citizens

hip in the United

States 2009

Here are a handful of key findings and highlights of the survey, which was funded by The Hitachi Foundation:

some 54 percent of u.s. senior executives believe corporate citizenship is even more important in a recession and more than two-thirds (69 percent) agree that corporate citizenship needs to be a priority

65 percent of large companies design and offer sustainable products or services

65 percent of senior executives say business should be more involved in finding health care solutions

54 percent of companies (up from 36 percent in 2007) communicate internally with employees about corporate citizenship initiatives.

82 percent of large companies identify reputation as the top driver of corporate citizenship.

24 The Corporate Citizen issue 4

www.BCCorporateCitizenship.org

Boston College Center for Corporate Citizenship

Everyone may not know your name and you won’t find Norm and Cliff on their stools.

But the Boston College Center’s online Member Community is the place for you to go where the troubles are all the same.

The Center’s online Member Community, created exclusively for Boston College Center members, is a collaborative community where you can learn, support one another, mentor or be mentored, and try out new ideas in a safe, environment developed just for you. Here you can: • See and be seen! Showcase your expertise and highlight your company as a leader • Get advice directly from those in your shoes.

• Skip costly benchmarking projects and ask your peers directly.

• Reconnect with colleagues you met at courses or conferences you attended.

Membership in the community is by invitation only. If you already received an invitation and created a login, you can find the community at www.BCCorporateCitizenMembers.org. We’ll be waiting there for you with friends so be sure to drop by for a virtual pint.

“Being able to reach out to my colleagues was extremely useful. Had I worked with a consultant to gather this information, in addition to being more time consuming and costly, I would not have been able to gain feedback directly from individuals who have the personal experience and insight.”

Lindsay Heykants Capital Power Corporation

“I’m so glad this tool exists because CSR professionals needed a way to share information outside of forums and conferences and this is it, the hottest community I’m aware of. It’s like Facebook meets LinkedIn for CSR professionals. Thanks Boston College!”

Traci A. Wellington underwriters Laboratories, inc.

The Corporate Citizen issue 4

www.BCCorporateCitizenship.org 25

Getting to the ro The leadership competencies that

By Sylvia Kinnicutt and Chris Pinney What sets the best apart from the rest? Is corporate citizenship management becoming a legitimate field of business management like other professions? If so, what does the role look like and what competencies are needed to succeed in it?

This past year, the Boston College Center for Corporate Citizenship set out to discover what it takes to be a highly effective corporate citizenship leader in the 21st century.

Center researchers embarked on this journey with the assistance of leading competency model experts from the Hay Group, and some of the most outstanding leaders moving the needle on corporate citizenship in today’s companies.

Researchers found that the corporate citizenship function is indeed an important emerging professional field of business management with a clear set of responsibilities that distin-

oots of success grow corporate citizenship pros

guish it from other management functions. The corporate citizenship leadership role requires a highly talented, multi-dimensional and resilient individual.

Successful corporate citizenship leaders demonstrate a unique set of competencies. This includes personal attributes such as maturity and optimism, an ability to take a systemic perspective and create strong relationships across the company, as well as leadership abilities and influence skills. These types of attributes are at the core of the leadership competency model developed by Center researchers and the Hay Group (see graphic). The challenges of leading corporate citizenship are many, but the outstanding individuals who researchers studied possess the competencies it takes to overcome them.

A common challenge cited by leaders in the study is a lack of direct influence over corporate

Boston College Center for Corporate Citizenship

decision makers. Facing this challenge, one director of corporate citizenship at a large company who recognized a problem in the company’s global business strategy, made the right inquiries to initiate a major change.

“I just raised a question. I said, ‘Are we equipped with our current practices and policies, to meet these changing expectations of the world about how a multinational corporation operates in those spaces? If we’re going to source more from low-cost countries, shouldn’t we be more articulate on what our human rights policy is and what our expectations are?’”

One of the foundational competencies in the corporate citizenship leadership competency model is Optimistic Commitment, which is critical to success in such an uncertain and changing field.

By bringing the issue of human rights considerations in a growing supply chain to the table, this leader exhibited the Change Driver competency. A Change Driver possesses the initiative to make change happen in an organization. By asking the right questions of the right people, this leader obtained the support he needed by also using the competency of Strategic Influence.

Finding win-win solutions to benefit both the business and society is another common challenge encountered by corporate citizenship leaders. One of the individuals in the study exhibited what is required to craft these kinds of win-win solutions. He convinced suppliers to work out a compromise with a contentious stakeholder: “I told the supplier why it [a new model for dealing with products and sourcing around a key social/environmental issue] was so important to us. And how it’s important for our brand, how it’s important for you as

28 The Corporate Citizen issue 4

supplier, too, how important stakeholder engagement is, which I do believe. It’s so important. We don’t live on an island.”

One of the foundational competencies in the corporate citizenship leadership competency model is Optimistic Commitment, which is critical to success in such an uncertain and changing field. The leader who was able to convince suppliers to reach a compromise had confidence in his company to do the right thing by engaging stakeholders. That confidence was rooted in his Optimistic Commitment. He also showed his competence at Visionary Thinking, by matching business and stakeholder concerns to improve the business.

Staying tuned into the broad spectrum of trends and issues that a corporate citizenship leader must deal with can also present a challenge. Prior to a major event, one leader described how he ensured that corporate citizenship issues would be considered: “Working with the head of communications, we scheduled a couple of issues management sessions with our PR team, with senior leaders, and just mapped out very early on in the process.”

Peripheral Vision and Systems Perspective are two competencies that are important in helping leaders stay in the know. The ability to see corporate citizenship, business and society as an interrelated system and to “connect the dots” in a comprehensive systems view, equips a leader with the insight and curiosity to know which dots are out there and need to be connected.

Building a model of success The competency model the Center has created includes eight competencies of successful corporate citizenship leaders that help them overcome these and other challenges. Understanding these will help today’s current and emerging citizenship leaders comprehend their role, and what it will take to succeed and push the envelope on corporate citizenship.

Of course, leaders of corporate citizenship also need to be highly skilled in this quickly developing field and have reservoirs of knowledge on topics as diverse as

www.BCCorporateCitizenship.org

Learning, Practice, Results. In Good Company

Corporate Citizenship Leadership Competencies

Change Driver

Strategic Influence

Combines vision with the persistence and drive to mobilize people around a higher purpose.

Leverages organizational awareness to influence others to commit to corporate citizenship.

Visionary Thinking

Systems Perspective

Thinks strategically and creatively, connecting the dots to find new ways to enhance corporate citizenship.

Uses an understanding of how elements of a system relate and interact to frame risks and opportunities.

Peripheral Vision

Optimistic Commitment

Interest in the world and social and business issues that enables one to see new opportunities and risks.

Draws on optimism and strong personal belief in the potential of corporate citizenship to overcome social and business challenges.

Collaborative Networker Uses empathy and interpersonal understanding to build mutually beneficial relationships and connect and engage diverse groups of people.

Personal Maturity An ability to achieve satisfaction by empowering others rather than through personal recognition.

At the root of success The Corporate Citizen issue 4

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Boston College Center for Corporate Citizenship

Leadership competencies for community involvement The Corporate Citizenship Leadership Competency Model is one of two models designed by the Boston College Center for Corporate Citizenship in partnership with the Hay Group. A Leadership Competencies companion model, the Comfor Corporate Citizenship munity involvement Leadership Competency Model, looks at the role, responsibilities and leadership competencies required for developing, driving and implementing a 21st century corporate community involvement strategy.

Learning, Practice, Results. In Good Company

Getting to the roots of success

Community involvement leaders must have the competencies it takes to mobilize and engage a broad range of internal and external stakeholders to create innovative programs that leverage Leadership Competencies a business’ unique resourcfor Community Involvement es and capabilities to generate measurable value for both society and the company. This model, like the corporate citizenship version, can be used as a practical tool for charting a course of personal and professional development for today’s and tomorrow’s leaders.

Learning, Practice, Results. In Good Company

Getting to the roots of success

Full reports on both models are available in PDF format. To download a copy, go to www.BCCorporateCitizenship.org/competencies.

30 The Corporate Citizen issue 4

climate change and community development. Equally important, corporate citizenship leaders need a much deeper knowledge of the business, its products and its culture, than may have been assumed previously.

As corporate citizenship becomes a central part of business strategy, culture and operations, citizenship leaders without business savvy will find it difficult to adapt.

Corporate citizenship leaders should take some time to honestly assess themselves against the eight competencies. Someone having a hard time seeing eye-toeye with a particular stakeholder may need to focus on developing Personal Maturity and Collaborative Networker competencies.

Assessing Strategic Influence competencies might help in getting senior leadership on board with an initiative that is proving problematic. The Center can provide an array of resources, management training courses, and networking opportunities to help corporate citizenship professionals develop competencies to excel in their job.

The leadership competency model can also be helpful to someone who aspires to be a corporate citizenship leader and is looking for guidance on what it will take. It also offers senior business leaders or human resource executives an indicator of what kind of people they will need to ensure their company is a leader in corporate citizenship.

As more and more companies recognize the value in creating the role of corporate citizenship leader, it is more important than ever that they start off with the right team to see a company through to a responsible future. n Sylvia Kinnicutt is a research associate with the Boston College Center for Corporate Citizenship. Chris Pinney is the Center’s director of research and policy.

www.BCCorporateCitizenship.org

A tough job gets easier: Managing employee volunteering

A

By Bea Boccalandro

s the trailblazers of an emerging field, employee volunteering and giving program (eVGP) managers have long had to steer their own path, often determining their own criteria for success along the way. undeterred by lack of hard data, they have made decisions based on anecdotal evidence, common sense and gut instinct. Their leadership and managerial resourcefulness have been impressive. Nevertheless, eVGP managers often report feeling uncomfortable with the unsubstantiated decisions they’ve had to make year after year. even well-informed eVGP managers have not had access to answers to basic questions, such as:

The Corporate Citizen issue 4

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Boston College Center for Corporate Citizenship

• Is it reasonable to expect an EVGP with an operating budget of $10 per employee to perform well?

• Is it critical to offer time off for volunteering?

• Should the EVGP’s desired business benefits be publicly stated?

• Should the EVGP have a charitable cause focus?

This way forward But now things have changed. Thanks to research funded by Bank of America, EVGP managers have evidence-based guidance. A Boston College Center for Corporate Citizenship research project scrutinized the body of knowledge related to employee volunteering and identified key drivers of community and business impact.

EVGP managers no longer have to guess the answers to those four basic questions. The research has generated answers:

No, it is not reasonable to expect an EVGP with an operating budget of $10 per employee to be highly effective. High impact EVGPs typically require approximately $30 per employee, per year. While this may sound like a hefty investment, EVGPs require far fewer resources than training and other employee programs – even when comparing on a per employee or per service hour basis.

No, it is not critical to offer time off for volunteering.

Studies indicate that while release time has some beneficial effects on the strength of an EVGP, these are modest and replicable using other policies. It is possible to have a high-impact EVGP and not offer time off for volunteering.

Yes, desired business benefits should be publicly stated. Research indicates that, as with any business en-

Learning, Practice, Results. In Good Company

Online tool provides employee volunteering custom benchmark report imagine your boss asks, “Do you have a definitive answer on whether our volunteer program is any good?” You respond, “i’m glad you asked!” and hand her three pages of data. “Per this report,” you explain, “i have benchmarked against the evidence-based practices that drive high impact in employee volunteering. Our volunteer program meets X percent on such practices and is stronger than X percent of the surveyed Fortune 500 and than X percent of surveyed retail companies.”

ing employee volunteering: “Are we doing this right?”

the generosity of Bank of America, is available free of charge.

This is not an exercise in imagination. Research-validated guidance on what programmatic elements generate high impact

Your boss is speechless as she reviews the stats in the report.

You continue, “Research suggests that changing these three things about our program would increase the impact it has on the community and business.…”

employee volunteering is no longer fantastical. To the contrary, in Citi’s New York City offices and Blue shield of California’s san Francisco offices and in locations in between and abroad, a scenario akin to the one described above has already taken place. How did these peers produce such a report? They used an online benchmarking tool that, thanks to

The Drivers of effectiveness survey Benchmarking Tool (www.volunteerbenchmark.com) provides a three-page report on how well your employee volunteer program is structured to make a meaningful and substantive impact on the community and the company. By completing this survey, you will receive a report scoring your program against the ideal, per the evidence-based Drivers of effectiveness for employee Volunteering and Giving Programs. it identifies your program’s strengths and weaknesses, and compares your program to groups of respondent companies you choose such as the Fortune 500, retail companies or another benchmark group of your choosing.

in other words, imagine you have a clear, research-based, factual answer to the historically elusive question regard-

deavor, the EVGP will more likely achieve goals that are explicitly stated than goals that are implied.

Yes, it is suggested your EVGP have a charitable cause focus. Research conducted within and outside of employee volunteering finds that focusing the program on one social sector issue, or a short list of issues, augments impact.

These answers are in the research report, “Mapping Success in Employee Volunteering: The Drivers of Effectiveness for Employee Volunteering and Giving

The Corporate Citizen issue 4

start your survey now at www.volunteerbenchmark.com.

Bea Boccalandro

Programs and Fortune 500 Performance.” The report takes what research has identified as drivers of impact and distills them into 25 indicators that, in turn, form six Drivers of Effectiveness for EVGPs. They are: 1.

2.

3.

4.

5.

6.

Cause-effective Configuration Strategic Business Positioning Sufficient Investment Culture of Engagement Strong Participation Actionable Evaluation

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Boston College Center for Corporate Citizenship

The drivers and corresponding indicators provide companies a theoretical and ideal benchmark against which to compare their EVGPs. Companies that perform well on the drivers can feel confident that their EVGPs are maximizing impact on community and company, as best can be determined by our current state of knowledge.

If forward is that way, what am I doing here?

Unfortunately, most EVGP professionals do not end up feeling good about their own company’s performance on the Drivers of Effectiveness for EVGPs. “The most depressing thing I’d done in my career,” is how one Fortune 500 representative described her benchmarking experience.

By defining the ideal, the drivers made it evident that most companies are far from it. Data from more than 200 Fortune 500 companies indicate that more than 80 percent comply with the drivers at a rate of less than 50 percent. On average, Fortune 500 respondents have a compliance rate with the drivers of only 26 percent.

These results, also presented in “Mapping Success” don’t signify that Fortune 500 EVGPs aren’t contributing to the well-being of employees, businesses and communities. The research simply suggests that EVGPs could achieve much greater impact. Currently, 95 percent of Fortune 500 respondents engage their employees in the EVGP for an average of fewer than eight hours a year. Clearly companies are not fully tapping into the potential that employee volunteering holds to transform the social and corporate sectors.

Full speed ahead Despite the sobering news about current performance on the Drivers of Effectiveness for EVGPs, the field has responded constructively. Companies around the globe are using the drivers to redesign their strategic planning processes, revise their goals, update their web sites and otherwise refine their programs.

34 The Corporate Citizen issue 4

One EVGP manager recently said that using the drivers to benchmark and guide her EVGP had made her job easier and more secure. This is great news for every human need and charitable cause possibly touched by employee volunteers. From what’s been seen of EVGP managers, they will convert this managerial support into greater good for society. It will be exciting to see what employee volunteering looks like in a few years now that Bank of America has provided a tool to promote an evolution in effectiveness.

You can download “Mapping Success in Employee Volunteering: The Drivers of Effectiveness for Employee Volunteering and Giving Programs and Fortune 500 Performance” from the Boston College Center web site. You can benchmark your Employee Volunteering and Giving Program at www.volunteerbenchmark.com. n Bea Boccalandro is a member of the faculty of the Boston College Center for Corporate Citizenship.

Photo on page 31:Lockheed Martin’s “engineers in the Classroom” program aims to inspire students to think of careers in engineering as compelling, rewarding and even fun.

Photo on this page: unum employees landscape Children’s Home/ Chambliss shelter in Chattanooga, Tennessee, during 2008 Community service Day.

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Boston College Center for Corporate Citizenship

The Net effect: Building real relationships in real time The power of social media

By Tim Wilson

I

t wasn’t that long ago that when a company wanted to engage in a conversation with consum-

ers it dreamed up someone who could personify a product.

Whether it was Madge the manicurist for Palmolive, Josephine the plumber for Comet, or Mr. Whipple for Charmin, these characters were often the extent of any social relationship consumers could share with the companies. And their conversation never strayed from the ad exec’s favorite message: Buy our product!

But today there are conversations taking place with companies and about their products that don’t offer the comfort of a script approved by the marketing department. The Internet has exploded with an increase in users of more than 300 percent in just the past eight years and about 138 million Americans using broadband. Roughly 40 million of them are uploading content to communicate about whatever they please and often it’s about companies and their products.

While Madge and her friends were quite the conver-

36 The Corporate Citizen issue 4

sationalists, they probably wouldn’t be up to the chat challenge now posed by the web and social media. And most companies today are interested in deeper conversations about more than what they are selling. The demands of a skeptical public that expects business to contribute more than jobs and profit to society require companies to communicate about what they are doing with their corporate citizenship efforts.

Martin Smith, CEO and founder of Just Means, advises that companies recognize today’s communication with the public is two-way and there are already conversations taking place about them via social media.

“If you’re not talking about your brand, if you’re not talking about your initiative, someone else is going to do it for you,” comments Smith, who helps companies engage online with people about issues of social re-

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Learning, Practice, Results. In Good Company

sponsibility. He stresses that it’s important for companies to be present on social media “to at least listen to the conversation if not engage in it.” The trouble is, there’s a blizzard of messages for the public to sift through and business has no control over messages that can sometimes be damaging.

Fortunately, users of social media such as Facebook and Twitter have the ability to filter what they want to hear, whether it’s about friends, pop culture or social issues.

This presents an opportunity, Smith points out, for companies looking to engage in authentic communication about corporate citizenship with consumers, employees, activists and nonprofits who are looking for a relationship with a company that goes beyond working or buying products.

“That’s the real power of social media,” Smith says. “It lies in being able to connect with people in a more authentic way, in real time and to continually connect with them over time on what you are doing as it relates to your social responsibility and sustainability initiatives.”

But the catch, he adds, is that companies must know who they are trying to reach and what they want to accomplish.

Mike Dupee, the VP of CSR at Green Mountain Coffee Roasters, recognized the social media trend but wasn’t sure how to get involved with it. A little more than a year ago GMCR started working with JustMeans on Twitter and Facebook with the tools he views as inexpensive, easy to execute and intriguing. “It was a way to reach out to a variety of stakeholders without getting involved in a big marketing campaign,” recalls Dupee.

The Corporate Citizen issue 4

GMCR successfully employed social media as part of its Changing Climate Change initiative, using it to generate grant applications from nonprofits working in the issue. The experiment with social media offered GMCR a chance to “create conversations, have the experience and see what it was like.” It also provided a PR and marketing opportunity to communicate with a broad audience, and communicate about the good works of GMCR. On all counts the experiment was a success, attracting 150,000 unique visitors, 8,000 followers and 100 grant applications from around the world.

At Timberland the goal for its use of social media is three-fold: 1. Communicate CSR in an interactive way 2. Share information 3. Add value to stakeholder engagement. “Essentially, we want to scale the conversation on important issues,” explains Beth Holzman, CSR manager for Timberland.

Using Facebook, Timberland was able to connect stakeholder engagement in the virtual world with real world impact. A virtual tree-planting application invited people to spread seeds for trees and recruit friends to water them. Timberland matched virtual adult trees with real trees as part of an ongoing commitment to plant more than a million trees by the end of 2009. The goal was reached in the first six months. “We’re having to look at how does the use of some Web 2.0 tools and the viral nature of these tools force us to evaluate some of our own programs,” observes Holzman.

In addition to Facebook, Timberland engages the public online with its Earthkeeper web site, which provides an interactive community that encourages environmental stewardship on a personal and global scale. “What we’re really looking to do is by linking Timberland’s environmental and social actions and commitments to opportunities for consumers to participate,” Holzman says “the Earthkeeper network serves as both a strategic marketing platform as a well as a social networking base for stakeholder engagement and innovation that can help inform our CSR programs.”

Social media is a new tool for most companies but at Intel it started early on with grassroots employee blogs. Suzanne Fallender, director of CSR Strategy

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Boston College Center for Corporate Citizenship

and Communications at Intel, says social media has helped fill the communication gaps the company found existed despite starting social reporting in 1994. The reports had a limited audience, there was an increasing demand for information between the reports, and research revealed that despite the reporting most people weren’t aware of the work Intel was doing in education and other areas.

“There’s also a lot of risks involved with engaging in social media without some kind of governing mechanisms to be sure you have some amount of control over who does what and what kind of information is released and who’s keeping an eye on it.”

Intel’s employee base made it fertile ground for social media to grow, a fact not lost on senior leaders, according to Fallender. She recalls that Intel executives looked at what was going on externally with social media and its rapid adoption internally and said “We have 80,000 people around the world. They are tech geeks.

They love to be on all of this kind of stuff. We need some governance framework and policies to make sure people can participate effectively.” The result was a set of social media guidelines and training that was not too prescriptive but encouraged employees to use common sense in writing about what they knew.

GMCR is a relative newcomer compared to Intel, but Dupee already sees the tension between the success and energy tied to a democratization of communicating via social media. He acknowledges the risk of ignoring social media as a business but adds “there’s also a lot of risks involved with engaging in social media without some kind of governing mechanisms to be sure you have some amount of control over who does what and what kind of information is released and who’s keeping an eye on it.”

38 The Corporate Citizen issue 4

Dupee sees challenges that come with the opportunities of social media. Complicated messages can be difficult to deliver online, particularly when limited by Twitter’s 144 characters. The variety of information channels being employed and the distribution of information from numerous sources make it tough to coordinate and deliver a message in a consistent corporate voice.

From her perspective company with more media experience than Fallender offers some tional lessons learned.

in a social most, addi-

Integrate with existing media, don’t substitute – There’s still some communication that doesn’t lend itself to social media and requires an oldschool approach.

Set expectations on return on investment – It takes time to realize that return but measure what you can. There is real value to be had.

Learn by doing – Start small and build. You don’t need to be communicating everywhere, in every way all at once.

That sounds like the kind of advice that Madge, Josephine and Mr. Whipple could appreciate. After all, they knew the value of getting a simple message across one customer at a time. n

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Unfamiliar adventures serve valuable lessons

W

By Colleen Olphert

hat do you get when you ask your employees to step outside their cubicles and perform their jobs in more challenging environments that are less physically comfortable and typically thousands of miles away from family and friends?

even though it may sound like a recipe for disaster, for several companies the result has been more engaged employees, increased loyalty to the company, leadership skills development, insight into emerging markets and significant contributions to society.

42 The Corporate Citizen issue 4

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Learning, Practice, Results. In Good Company

M

ost companies have some type of volunteer program these days. They range from offering employees a menu of programs to do on their own time to organized days, weeks, even months of corporate-wide volunteering. Some companies have taken this a step further and a step deeper. They have created programs that are not just about engaging with communities but seek to develop the next generation of corporate leaders while solving some of society’s toughest challenges.

IBM’s Corporate Service Corps is often referred to as “a corporate peace corps.” The program sends teams of employees from around the company and the globe to work with local organizations in emerging markets for a month. They also do several months of preparatory work on language, cultural competencies, and team building. After the in-country experience, they spend time working with future teams and sharing what they have learned. But this is not just an exercise in “doing good.” Participants develop important business skills such as problem solving in challenging, ambiguous environments, learning what it takes to be successful in key emerging markets and how to lead a global team.

Similarly Ernst & Young’s Corporate Responsibility Fellows Program and Accenture Development Partnerships are programs that match top employees with worthwhile initiatives in developing countries for three- to six-month stints. Gap has a slightly different variation. Gap’s program, This Way Ahead, keeps employees in the United States but is similarly focused on a complex societal issue – job skills for underserved youth. The programs also seeks to develop employee skills and loyalty to the company in much the same way the other programs do.

Each program has unique aspects to it that seek to meet the interests of the employees, respond to the market drivers for each of the companies’ industries, and connect to the individual company culture. However, some common themes have emerged.

The Corporate Citizen issue 4

First, there is overwhelming interest from employees for these types of programs. IBM thought its Corporate Service Corps would see most applications come from the young, idealistic employee in developed countries who missed out on the Peace Corps. Instead, applications for the first year of the program arrived from around the globe and all walks of life. IBM had 7,900

Participants develop important business skills such as problem solving in challenging, ambiguous environments.

applications for 300 slots. The company plans to grow the program to 1,500 participants by the end of 2010.

Ernst & Young and Accenture have also found an overwhelming interest in their programs.

All four of these companies have positioned their programs to target employees who are “the best of the best.” Employees must have a proven track record of success to be eligible, which means at least two or three years of experience with the company. On average, most participants have been with the company for six to nine years.

Gap took a different approach by targeting the heart of its employee base – sales people at the stores. They represent about 85 percent of all of Gap’s employees.

Gap felt it was important to create a program that leveraged its largest asset – employees – and could be sustainable and replicable. In 2009, This Way Ahead was running its third cycle in Gap’s New York stores and will launch in San Francisco in 2010.

The second common element is a solid business benefit to these types of programs. In order to be successful, corporate citizenship programs must benefit society and the business. All four companies built evaluation into their programs from the start. Gap partnered

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Boston College Center for Corporate Citizenship

with an outside consulting group which found that the youth involved in the program had gained life and job skills that would help them succeed after high school.

Gap employees developed new job skills or enhanced current ones through their work with the youth and at the conclusion of the program had an increased sense of pride in, and loyalty to, the company. Ernst & Young has worked to tie all of its corporate citizenship activities, including the Fellows Program, to its corporate

There is an added benefit in building partnerships in that nonprofits develop their capacity to work with corporations and vice versa.

scorecard in order to show value. Accenture and IBM employees who have participated in their programs have shown demonstrable leadership skills and the companies have exponentially increased their knowledge of working in emerging markets.

The third aspect that all four companies’ programs share is that the company cannot do it alone – and there is a benefit in that. All the companies agree that choosing the right nonprofit partner or partners is critical to the success of these programs. Some partners include the Citizens Development Corporation (IBM), Endeavor (Ernst & Young), and The Door (Gap).

The nonprofits know the communities and organizations that have the most potential for success with this type of program. Endeavor interviewed 17,000 organizations and chose 300 to be part of Ernst & Young’s program. As one company representative said, “focus on what you do well and outsource the rest.” There is an added benefit in building partnerships in that nonprofits develop their capacity to work with corporations and vice versa. This is becoming increasingly

44 The Corporate Citizen issue 4

important these days as “sector blur” becomes more prevalent. This refers to the traditional roles of public, private and government organizations becoming blurred as corporations take on what used to be government responsibilities and nonprofits create social enterprises and so forth.

Interest from employees, benefit to the business and effective partnerships has kept each of these programs running even in a down economy. In fact, Accenture’s model, where employees take a half salary for their time in the project, has actually saved the company money.

Though there are several other companies that have similar programs, there is no indication that these types of programs have reached a tipping point that will see them become part of every Fortune 1000 corporate leadership development program.

Rather, these programs are at an incubator stage.

But while current economic conditions may inhibit companies from experimenting with anything new, perhaps this period of business shakeups is the time for innovation in corporate citizenship and leadership development. n Colleen Olphert is the membership director at the Boston College Center for Corporate Citizenship.

Photo on Page 42: iBM’s Corporate service Corps sends top performing emerging leaders to work pro bono with NGOs, entrepreneurs, and governmental agencies in strategic emerging markets. They work in teams, like this one seen in Ghana, on projects where information technology is used to foster growth and economic development. The program promotes global integration of iBM employees, while also building leadership skills and goodwill in local markets.

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Boston College Center for Corporate Citizenship

Leading the way to learning For 25 years, the Boston College Center for Corporate Citizenship has offered management and leadership development programs in community involvement and corporate citizenship. More than 6,000 people from more than 1,000 corporations around the globe have participated in our open enrollment and on-site programs. The programs are designed to be immediately applicable to the challenges and opportunities facing corporate practitioners. Our faculty have proven track records working within and alongside corporations to advance corporate citizenship.

Our courses include: Institute on Corporate Citizenship Developing a Community Involvement Strategy Leveraging Corporate-Community Partnerships Evaluating and Measuring Community Involvement Communication for Community Involvement Managers

Bring Boston College to you Our on-site custom programs bring courses to you at the most convenient time and place for you. They offer the opportunity to make courses a part of your annual or quarterly staff meetings, saving on travel costs and time away from the office. And on-site programs are customized to specifically address the needs of your company in a comfortable, safe and productive

The Corporate Citizen issue 4

environment for examining what’s working and what isn’t. The collaborative, workshop style of the courses also delivers the hidden value of building teamwork among staff and promoting better understanding of everyone’s problems and perspectives.

Take the Fast Track Our Fast Track Certificate program lets you maximize the increased benefits of on-site courses. It consolidates all aspects of our courses into a five-day, on-site program where participants earn a Certificate in Community Involvement Excellence or Corporate Corporate Citizenship Excellence. In addition to the Fast Track Certificate program, we can work with you to customize any combination of our courses for a onetime program or series of programs at your location that focuses on your pain points and provides solutions.

If you would like more information about on-site course offerings, please contact Eileen Blinstrub at Eileen.Blinstrub@bc.edu or at 617-552-1467.

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Boston College Center for Corporate Citizenship

Membership puts you @ the Center…

No matter where you are

Webinars: • Get free professional development training, right at your desk • Keep up to date on emerging issues

Research: • Find quotes, statistics and best practices to share with your boss • Don’t reinvent the wheel, our case studies help you build strong programs from the start

Assessment tools: • Compare your company’s performance against competitors • Analyze the strengths and weaknesses of your company initiatives

Exclusive Online Member Community: • See and be seen! Showcase your expertise and highlight your company as a leader • Get advice directly from those in your shoes • Skip costly benchmarking projects and ask your peers directly.

To learn more about your membership benefits go to www.BCCorporateCitizenship.org/memberguide

Boston College Center for Corporate Citizenship 55 Lee Road, Chestnut Hill, MA 02467 Phone 617-552-4545 Fax 617-552-8499 Email ccc@bc.edu Web site www.BCCorporateCitizenship.org

Learning, Practice, Results. In Good Company

Finding value in virtue The quest to create, measure and communicate business benefits of corporate citizenship

I

By Tim Wilson

t’s no secret that the days of companies engaging in a corporate citizenship initiative simply because it’s the nice or right thing to do are over. The “social contract” through which business interacts with society has been torn up and drastically rewritten.

The Corporate Citizen issue 4

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Boston College Center for Corporate Citizenship

10 Best practices for creating value several of the companies interviewed for the study

by Boston College and McKinsey & Company can be considered leading edge in terms of creating value from strategic esG activities. Researchers identified 10 best practices necessary to create strategic and financially valuable corporate citizenship activities. The practices fall into four broad groups: fundamentals, strategy, organization, and implementation.

Fundamentals 1. Address key issues facing the industry 2. identify and engage stakeholders 3. Align with core business strategy

Strategy 4. utilize core competencies 5. Take a long term perspective 6. Create opportunities and manage risk

Organization 7. ensure strong leadership support 8. embed into the strategy, organization and culture

Implementation 9. select appropriate partners 10. set clear goals and manage like a business

Under this new contract consumers and employees exert pressure on companies to perform against expectations about how they operate and the social and environmental impacts their operations, products and services have in the world. This is further complicated when companies operate

48 The Corporate Citizen issue 4

globally facing different expectations in different places.

Business understands it has no choice but to deliver on this new contract. The result has been a transformation from a focus on risk management to an approach to corporate citizenship initiatives that seeks growth and opportunity like any other aspect of the business. It needs to be integrated as part of what every company does and create value.

The trouble is the metrics used to measure value created by corporate citizenship have not evolved with the practice. While much study has been put into finding a link between corporate citizenship and business value, questions remain about how to create value through corporate citizenship, how to measure it and how to communicate about it in a meaningful way.

The Boston College Center for Corporate Citizenship, brought together by IBM with McKinsey & Company, conducted a research project that interviewed executives from the areas of corporate citizenship or corporate social responsibility (CSR), sustainability, human resources, environment, strategy, finance and investor relations in 20 companies from 11 industries. This work culminated in a report from the Boston College Center, “How Virtue Creates Value for Business and Society�.

Perhaps the most encouraging finding of the study was an affirmation that corporate citizenship, or what the study referred to as environmental, social and governance (ESG) initiatives, delivers value in the four areas valued by the market: growth, return on invest-

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Learning, Practice, Results. In Good Company

ment, risk management and management quality. The study further found that investors in the market agree these initiatives drive value but they don’t take it into account fully because of inadequate measurement and communication.

Not surprisingly, the study also found that many companies do create value but not many measure the value in terms of financial metrics – and very few who do, communicate these to the market. Researchers looked for best practices in measuring and communication but in the end found not a lot of practice.

Kevin Thompson of IBM points out there are plenty of metrics, noting 100-plus surveys that CSR practitioners fill out each year to be evaluated and ranked on their CSR programs. But he adds, “Not one survey asks about value creation. They all ask about risk management.” That means ignoring the three other areas

where researchers find corporate citizenship creates value for companies that is appreciated by the market.

Despite the lack of measurement of the impact of corporate citizenship on business drivers other than risk management, researchers did find examples of ESG initiatives that have direct and indirect financial impact on business drivers. Sheila Bonini of McKinsey & Company explains that “you have to create value first to begin to capture it and then to communicate it out. In terms of creating value, what we did see is significant value creation across the companies that we looked at.”

One of the researchers’ case studies, the Danish pharmaceutical company Novo Nordisk, presents an example of ESG activities contributing to growth by adding customers and increasing market share. Focused on diabetes, Novo Nordisk spent about 10 years in China

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The Corporate Citizen issue 4 It’s the Network

verizon.com

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Boston College Center for Corporate Citizenship

working to build relationships with health care authorities and educating doctors, nurses and the population in a country where the disease received little attention. This work in diabetes education led to what is now a 70 percent share of that emerging market.

“If we can’t get financial metrics for everything we are doing, if we can begin to talk about these activities and connect them to how it creates financial value – so what is that pathway – it’s a huge step forward.”

Another subject of a case study, The Dow Chemical Company, offers an example of a company realizing return on investment thanks to ESG initiatives. Born out of environmental, health and safety goals, and operational goals to address climate change and improve energy efficiency, Dow sought to reduce energy consumption by 20 percent per pound of product produced. By spending $1 billion over 10 years to realize that cut in consumption, the chemical company produced savings of $7 billion in five years.

These are just two of 20 case studies of companies in the researchers’ report. Both demonstrate how corporate citizenship initiatives created value in a way that could be clearly measured and communicated. But the numbers are not always as easy to come by. Sometimes companies must rely on communication to bridge the gap when metrics don’t exist.

“If we can’t get financial metrics for everything we are doing,” Bonini advises, “if we can begin to talk about these activities and connect them to how it creates financial value – so what is that pathway – it’s a huge step forward.”

50 The Corporate Citizen issue 4

IBM’s Corporate Service Corps is an example of a corporate citizenship initiative creating value that is much more difficult to measure but no less appreciated when communicated the right way. The Corporate Service Corps enhanced management quality through development of emerging leaders who were sent to emerging markets to help with economic growth. This led to improved global leadership skills, cultural intelligence, global awareness, and employee retention and commitment to IBM. From these and other case studies, as well as interviews of more than 100 executives, researchers identified 10 best practices for creating value (see box).

But one of those executives, Dave Stangis of Campbell Soup, says the real value of the examples comes from how they give practitioners a new perspective on their own companies. In addition to helping figure out where gaps are in existing programs and strategies and where metrics can be put in place, Stangis explains, the methodology provides a framework for identifying how corporate citizenship is creating value.

“It will help you see things inside your company that you don’t today look at as CSR programs,” he remarks.

“Then you can talk to those business groups and talk to them about how it is and why it works and how to add value.”

Phil Mirvis, the lead Boston College researcher on the study, stresses the importance of those internal conversations and the importance of gaining the financial literacy to communicate with CFOs. He notes that it is the CFOs, not financial analysts who are skeptical and encourages practitioners to help create social and environmental literacy among CFOs. “They are the ones communicating to the Street,” Mirvis observes. “You’re framing it in their logic and language and in that process teaching them yours.” n

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Our research focus:

Finding real solutions for real problems Boston College Center for Corporate Citizenship research is geared toward producing knowledge that is useful for corporate citizenship practitioners. Here are some of our latest research publications that look at the management of corporate citizenship and the role of business in society:

Competencies

2009 Community Involvement Index

Center researchers worked with the Hay Group, one of the most respected firms in HR competency modeling, to identify and define the competencies it takes for corporate citizenship leaders to excel. The Center produced two leadership competency models, one for corporate citizenship management professionals and the other for community involvement professionals.

This report provides an overview of the state of community involvement based on a survey of more than 300 companies about programs, practices and management, with particular focus on strategy, philanthropy and volunteering. It offers companies insight into what their peers and competitors are doing in community involvement.

Learning, Practice, Results. In Good Company

Learning, Practice, Results. In Good Company

Learning, Practice, Results. In Good Company

Staying the Course The 2009 Community Involvement Index

How to Read a Corporate Social Responsibility Report: A User’s Guide

Learning, Practice, Results. In Good Company

Leadership Competencies for Corporate Citizenship

Leadership Competencies for Community Involvement

Getting to the roots of success

Getting to the roots of success

2009 State of Corporate Citizenship in the United States Learning, Practice, Results. In Good Company

Weathering the storm The State of Corporate Citizenship in the United States 2009

The Corporate Citizen issue 4

The latest edition of this Boston College Center survey looks at the attitudes and actions of CEOs related to corporate citizenship, and provides insight into the effect of the global financial meltdown on corporate citizenship. The 2009 edition of the biennial survey also explores how executives view new public policy challenges and their reaction to public expectations for better regulation of business.

This report offers help for those approaching corporate social responsibility (CSR) reporting for the first time, as well as those looking to deepen their understanding of what makes for a thorough CSR report. It guides readers on how to wade through lengthy reports and distinguish the valuable information.

How to Read a Corporate Social Responsibility Report A user’s guide

Institute for Responsible Investment

Upcoming research Profile of the Profession 2010 This survey examines salary data, job responsibilities and backgrounds of today’s corporate citizenship and community involvement professionals. Scheduled for release spring 2010.

Impact Measurement Project This project is developing a framework and indicators, with detailed guidelines and worksheets, that companies can use to measure the business value of their community involvement programs. Scheduled for release summer 2010.

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Boston College Center for Corporate Citizenship

25 years that changed the world

By Peggy Connolly In 1985 some notable ventures were launched – some more lasting than others.

• Microsoft released Windows 1.0.

• Music superstars recorded “We Are the World”.

• The first .com web domain was registered to the now defunct Symbolics Corporation.

And Boston College established the Center for Corporate Community Relations, which 16 years later would be renamed the Center for Corporate Citizenship.

During this moment in history, as technology sparked a new era of communications, the role of government was shifting and the rules of business were changing.

No longer could executives manage against the trinity of business: create jobs, pay taxes and obey the law.

With education and social service budgets shrinking, citizen groups and nonprofits turned to business for help. Corporate community involvement soon took on a more formal, and strategic, role inside companies.

In the early years, community was defined by the location of a company’s facilities and community involvement was measured in philanthropic dollars. Then the Berlin Wall fell. Globalization accelerated a seismic shock to business exemplified by the early 90s when the footwear industry faced demands to take responsibility for supply chain labor standards. That was just the beginning of how expectations for greater transparency and accountability would affect business.

As corporate citizenship evolves beyond philanthropy, business strategy incorporates the impact of such diverse issues as greenhouse gas emissions, childhood obesity and supply chain management. Add to that addressing how to responsibly open markets in the developing world and engaging in policy debates on climate change, poverty and global pandemics, and you’ve got corporate citizenship for the early 21st century.

Perhaps the transformation of corporate citizenship in the past 25 years is best captured by chapter headings 52 The Corporate Citizen issue 4

in two books, one by the Center’s founder and the second by his successor. Early on, Ed Burke framed the challenge to business as “From Balloons and T-shirts to Neighbor of Choice”. In 2008, Brad Googins called it “Co-creating Value for Business and Society”.

Through this evolution, the Boston College Center remains responsive. We will soon reintroduce a more rigorous and relevant Standards of Excellence in Community Involvement to complement our Corporate Citizenship Management Framework and our new competency models for corporate citizenship and community involvement leaders.

For this 25-year milestone, there will be no balloons or gala events. We believe the best way to celebrate is to remain focused on how companies balance the changing demands of society with sustainable business practices to serve both business and society.

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PResORTeD BuLK PAiD Boston, MA Permit No. Boston College Center for Corporate Citizenship 140 Commonwealth Ave. Chestnut Hill, MA 02467 www.BCCorporateCitizenship.org

Get in the loop Loops are everywhere in nature. These loops change the seasons, guide our days and stock the pantry of our planet. They also inspire action. From renewable energy to composting, recycling, rethinking, reinventing, the loops we created go a long way toward preserving and extending our common resources.

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