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January 29, 2008
New Survey Uncovers Discrepancies on Corporate Citizenship Issues
by Anne Moore Odell
There is gap between what executives say on corporate citizenship and what their corporations
actually do, finds a survey of over 750 executives.
SocialFunds.com --
A survey released by the Boston College Center for Corporate Citizenship (BCCCC) and The Hitachi
Foundation shows CEOs and other executives support responsible corporate citizenship, at least
in principle. The third biennial 2007 State of Corporate Citizenship in the US, "Time to get real:
Closing the Gap Between Rhetoric and Reality," studies what CEOs and other business executives say
they believe about the importance of corporate citizenship and what policies are actually in place
at their businesses.
 The BCCCC describes corporate citizenship
as the commitment of companies to minimize risks, maximize benefits, and be accountable and
responsive to stakeholders, while supporting strong financial results.
Although 73% of the
751 top executives surveyed said that corporate citizenship needs to be a priority for businesses,
only 39% of the businesses include corporate citizenship as part of their business planning. An
even smaller percentage of these businesses (28%) actually have written corporate citizenship
policies or statements.
"We think the gap between aspirations and actions is to be
expected at this time because business is going through a significant transformation," said Vesela
Veleva, Research Manager at BCCC and lead researcher on the Report.
"Companies are still
adjusting to globalization, increased transparency, instant communications and a more
sophisticated-and larger-network of stakeholders. It's only natural that senior level executives
would articulate their ambitions to be responsive to these pressures before they are able to
integrate the practices into strategies across the business," Veleva continued.
US
companies are behind European and Japanese companies in creating corporate citizenship policies,
the report concludes. This could have dire consequences for US companies that have not taken action
incorporating social and environmental issues into their businesses.
"We did see some
movement toward corporate responsibility [in the 2007 Survey], especially in the area of increased
support for low-income communities, greater hiring of women-owned and minority-owned suppliers,"
Veleva told SocialFunds.com. "We also found increasing recognition among US businesses of the
importance of corporate citizenship for the brand reputation."
One of the most striking
discrepancies between CEO rhetoric and business actions is the way businesses actually treat
employees. Four out of five top-level executives answered that they "see the importance of valuing
employees and treating them well." Employees’ actual experience often fails to match executive
rhetoric. Just over half (54%) of these companies offer health insurance to employees, and less
than a third offer training and career development for low-wage employees.
The dialogue
between companies, shareholders and the public about the social role companies should play is not
as open as companies might think. Sixty-five percent of business leaders replied that the public
has “a right to expect good corporate citizenship" yet only 29% report that they to discuss
corporate citizenship with stakeholders and only 21% report to the public on these issues.
The BCCCC/Hitachi study compares the expectations of executives and the public over the part
companies should play in helping solve social issues. For example, 79% of the public surveyed
believes that companies should be expected to manufacture their products in an environmentally and
socially friendly way. Yet just 55% of executives agree.
Sixty-two percent of the public
believes that corporations should be held responsible for reducing human rights abuses. Only 32% of
executives agree. Another striking difference of opinion exists over the role companies should play
in helping reduce the gap between the rich and the poor. Only 21% of executives answered that large
corporations should help, while more than twice that percentage of the public holds this idea to be
true (49%).
The survey also found that the response to the changing social contract varied
by the size of the company. "Executives from medium-size companies seem most satisfied with the
current social contract--50% of them see the existing social contract either as sound or as in need
of some minor adjustments," reported Veleva. "Senior executives from small companies seem most
dissatisfied with the social contract--only 32% of them see it as sound or in need of minor
adjustments, while 66% believe it needs a major overhaul or serious changes to fix it."
The report was released as part of a well-attended webinar in December 2007 and interest in the
survey has been extremely high, reported Veleva. For example, the Social Investment Research
Analyst Network (SIRAN) is planning to present
the data to its members. SIRAN, a network of 150 North American social investment research analysts
from 30 investment firms, research providers, and affiliated investor groups, is a working group of
the Social Investment Forum (SIF).
"In a lot of ways the media is already inundated with corporate citizenship talk - it's all the
'rhetoric' we're talking about in the report," Mark Popovitch, Senior Program Officer at The
Hitachi Foundation explained. "We've really offered the report as a resource for the media to use
to inform their coverage of corporate citizenship moving forward and provide perspective to the
rhetoric coming out of corporate America."
The blog www.corporatecitizen07.com complements the
survey. The BCCCC and The Hitachi Foundation are also presenting the information to business
schools and groups about how businesses can adopt corporate citizenship principles.
"The
Center's partnership with The Hitachi Foundation is an important part of this project," added
Veleva. "This independent foundation is more than a funder and operates as a full partner as it
uses the research to advance its objectives of enhancing the well being of economically and
socially isolated people in US and its strong commitment to advancing corporate citizenship,
business ethics, corporate philanthropy, and government governance."
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SRI World Group, Inc. All Rights Reserved.
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