Thursday, July 29, 2010

Corporate Social Responsbility (CSR) Nine (9) Steps

See repost of go green Social Responsbility posting..

Companies adopt CR strategies for a variety of reasons ranging from preventing tighter legislation to, reputation and brand protection/enhancement, through to cost control and building employee and customer loyalty. It’s important to understand which of these are the most relevant for your business, articulating this for your organisation and obtaining senior level consensus on this view.

What is corporate responsibility?

Corporate responsibility (CR) is a concept whereby organisations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.

It’s important to note, particularly for multinationals that CR is often viewed and even named differently from country to country due to changes in business culture, customs and norms and the role the law and tax regimes play in enforcing/promoting businesses’ responsibilities around specific issues. Therefore such articulation may need to be regionally sensitive.

Develop a CR strategy
Historically it was acceptable to think of corporate responsibility as the redistribution of a small percentage of profit to a worthwhile cause. The focus has now firmly shifted to the business end, i.e. how does the business makes its money?

What resources (human and natural) are used to do this? What third party relationships (customers, suppliers, government etc) does it depend on to do this?

By developing a risk/opportunity register around such areas a business can begin to develop a value added CR strategy.

Engage with stakeholders
It’s important not to build any issues register in isolation and it’s both healthy and more credible to engage with stakeholders early on in the process. These may include industry bodies, relevant NGOs, government, staff, unions, existing and potential customer groups etc. A broad definition of a stakeholder is a group who is affected by / or can affect the organisation and / or its activities.

Stakeholder engagement can provide excellent business insights and opportunities for business development. It’s generally recommended that stakeholder engagement occurs at least annually and some companies maintain constant stakeholder dialogue.

Senior endorsement
Obviously senior management needs to be behind a CR programme. Doing this may require both capacity building and internal lobbying but without senior endorsement, a CR programme will tend to lack teeth.

While engaging at this level it will be important to identify how a business’s overall vision, mission and strategic goals either compliment or create tension when it comes to achieving CR management objectives.

Key deal makers and breakers (when it comes to implementing a CR programme) will also need to be engaged with at this point.

Prioritise CR
So often, the combination of stakeholder demands and the exhaustive list of CR topics can create a somewhat daunting list of CR management tasks. So unless you have unlimited CR resource, it’s important to prioritise those that are most important.

Commonly, risk assessment processes can be used to do this, but this may miss out those areas that may provide new business opportunities or competitive advantage. It’s useful to articulate at this point, what your corporate responsibilities are not and why. In short, doing a few things well is far better than doing everything badly.

Mapping the CR strategy
If the CR strategy is to be separate from that of the organisation’s then it will need to have its own identity, strategy and set of operating principles, and a senior team responsible for its implementation.

The CR strategy should be mapped against existing business practices and processes to identify where tactical elements can be best integrated and where additional resource will need to be found. The development of internal controls should also occur, where their absence may lead to deviation from achieving the strategy.

Embedding CR into the business
Embedding CR into the way a business does its business is probably one of the areas where companies currently struggle the most and the area where the role and understanding or HR is the most important.

CR training, integration of CR matters into relevant competency frameworks, remuneration and change management approaches are all required if the responsibilities are to live and breathe alongside the business on a daily basis.

Review, manage and measuring CR
Developing appropriate key performance indicators (both to the business and to stakeholder expectations) is essential to tracking the progress of a business against its medium and short-term CR objectives and targets.

The Global Reporting Initiative may provide a useful starting point for guidance as to how these might look (there are also some useful sector supplements). Ensuring progress will require regular review, perhaps by a CR committee, and certainly by the board.

Some systems available today are able to provide live information on KPI performance via a web accessed system. This is very useful for the day-to-day management of CR objective for those in relevant job functions.

Secure the commitment from the internal audit team and include CR elements into the audit schedule. It’s also worth doing this to a recognised standard that you may then wish to measure yourself against using a third party.

Communicating CR to stakeholders
It’s important to provide a regular update to stakeholders as to your CR performance and activities. Commonly this is done annually and in conjunction with the annual report and accounts.

The form this may take and the tone of the communication will depend or your appetite for creativity, the branding strategy you have for your CR programme and the intended audience. Many companies are experimenting with the use of webinars, and even making films in order to make this information more digestible and more accessible

Credibility and transparency
Assuring the audience that the information is both credible and relevant requires the involvement of a third party at this stage. The use of third party assurance adds credibility and transparency to the communication and reduces unwelcome criticism that the work is simply public relations by another name.

Established assurance standards such as AA1000 include an assessment of the relevance of the issues chosen and whether others may have been missed.

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