Moving to the Next Generation of Corporate Citizenship

Some leading companies have progressed beyond legal compliance, checkbook philanthropy, and stakeholder management to define a next generation of corporate citizenship that takes it from the margins to the mainstream of their business, according to the Centre for Corporate Responsibility in Germany.

Researchers Phillip  Mirvis and Bradley Googins in their report Moving to the Next Generation of Corporate Citizenship have depicted this CSR movement through a developmental model: the stages of corporate citizenship, from an elementary to an engaged, innovative, integrated and, in some instances, transformative approach.

They says leading-edge firms make the link between business and society in their strategies, plans,and value chains from sourcing through to products and services. The essence of their methods: 1) look outside- in to define the issues that are “material” to the
firm and to society and 2) consider, from the inside out, how to address them authentically and distinctly.

Gathering intelligence on social, political, cultural, and environmental issues that bear on the business once was consigned to the public affairs function in companies and consumed as background reading by strategic planners. Today the scanning and calibration of this kind of information is the work of top executives, board members, and operating managers. 

The researchers say the reasons for their sharpened focus on the many issues at the intersection of business and society are twofold: These issues pose potential risks and portend significant opportunities.

Increasingly,they say, what drives social innovation is shared leadership whereby top executives work in partnership with multiple stakeholders and leaders at every level of the organization step up to the challenge.

The report says the public no longer countenances corporate scandals and attempts to cover them over in public relations campaigns. The most effective course of action for firms facing controversies is to increase transparency, implement internal CSR policies, and engage stakeholders.

The research found that European firms are far more likely than American ones to issue social and environmental reports and to have them verified by external auditors. Many see this as offering the field the best of both worlds: American-style free market activity leavened by European-based standards and criteria for corporate conduct. But some managers worry that putting a primary emphasis on accountability and reporting leads to “box checking”, along with audits, and reviews; or, in effect, a super-sized version of citizenship based on compliance.

The report says some see a sixth stage of corporate citizenship developing, whereby firms respond to global social, political-economic, and environmental threats and opportunities by establishing “extra-organizational” forms, such as partnerships with other businesses, governments, and civil society. This phase raises questions about the “business of business” in different kinds of socio-economies and invites a new line of inquiry into the respective roles of private enterprise and the public sector in the next stage of corporate citizenship.

The report can be downloaded at  www.cccdeutschland.org