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Lead article in ROB Magazine 2000 Business Ethics Summit Advertorial
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In a classic case of “damned if you do, damned if you don’t,” business leaders must decide whether to actively promote policies of corporate social responsibility. Once the answer to “why bother?” is apparent, the next most frequently asked question is “how to?” Reality Check, the 2000 Canadian Business Ethics Summit produced these four practical answers.

Socially Responsible Corporate Behaviour-- Why Bother?*

by Dean Williams, Williams Savvy & Associates


*Originally published in the Globe and Mail's ROB Magazine

Why bother?                                                                                                                                                           

THE PUBLIC’S GROWING CONCERN over corporate responsibility has recently manifested itself
in many ways, from public protests at meetings of the World Trade Organization to negative media
coverage, consumer boycotts and employee dissatisfaction.

Even corporations that actively promote their own social responsibility can get blasted for not
meeting the public’s high expectations.

Ironically, but not surprisingly, these kinds of incidents add to corporate reticence to undertake
proactive practices.
 

 ----
While some business leaders fear that investing
in a social responsibility strategy would be cost-
prohibitive, others worry that being proactive
might set their corporation up as another target
for “unreasonable” consumer activism.

But what are the options? As globalization
continues to change the power balance in
society between governments and corporations,
consumer expectations are increasing at the same
time as voter expectations are decreasing.
However, if the choice is between doing nothing
and being proactive, the evidence suggests that
being proactive is worth both the risk and the
investment.

Corporate social responsibility issues, such as
business integrity, environmental stewardship,
employee relations (including concern for
employees’ health and well-being), community
involvement and human rights, are being covered
in the media with greater frequency and
prominence. You can almost feel the political,
social and economic culture shifting.

The often-quoted Millennium Poll, conducted
by Environics International Ltd. in co-operation
with the Prince of Wales Business Leaders Forum
and The Conference Board, confirms this shift
toward an emphasis on ethical standards and
corporate citizenship.
    presents   

  

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According to the Millennium Poll,
• 90 per cent of respondents believe that companies should focus on more than profitability
• 60 per cent said that they form an impression of a company based on its social responsibility
• 40 per cent responded negatively to or said they talked negatively about companies that they
  perceived as not being socially responsible.

As with most instances of change, there is a period of uncertainty and insecurity for both
corporations and the public. On the plus side,studies, such as one by Harvard University,
indicate that “stakeholder-balanced” companies showed four times the growth rate and eight
times the employment growth when compared with companies that are simply “shareholder-focused.”

Eleanor Clitheroe, president and chief executive officer of Ontario’s Hydro One Inc. and a founder of
The Canadian Centre for Ethics & Corporate Policy, is convinced that “corporate leaders need to
appreciate that a corporate ethics program is good for a company’s sustainability.”Clitheroe believes
that ethics programs can be cost-effective. She argues that they go a long way toward preventing lost
sales, a demoralized work force and unethical behaviour that can be increasingly costly to an
organization, both in dollars and in terms of perception. In her experience, corporate ethics programs can
also help to attract and retain good employees who wish to work in an environment with high standards.

Real leadership, however, means that leaders must set the standard. By acting ethically, for example,
Hydro One hopes to earn the trust and confidence of its employees, customers and other stakeholders.

Louise Cannon, senior vice-president of group compliance at Scotiabank, agrees. She says that
Scotiabank has had decades of experience in being linked to the communities in which it operates.
“We’ve been involved in corporate social responsibility since long before it had a catchy name,”
says Cannon. “Forging stronger links to communities has built customer loyalty and reinforced
employee satisfaction at Scotiabank.”

“Commitment is fundamental to good corporate citizenry,” adds Gerry McDole, president and chief
executive officer of AstraZeneca Canada Inc.“Making a difference in the communities where we live
and work means more than researching and developing new medicines.We are committed to improving
the lives of Canadians. Our commitment motivates our employees and enhances our relationships
with our stakeholders.”

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