What is Corporate Social Responsibility?

Your leadership provides the vision for the future and enlisting employee-led procedures, processes and effective innovation for now and the future. Leading your people by empowering them with skills and knowledge is a critical success factor for transformation.

“”There should be a focus on integrated reporting of CSR and financial results, which could bring about an alignment of Sustainability with economic performance.”  ~ Fulvio Conti, Enel S.p.A.

CEOs see Sustainability shifting from a choice to a corporate priority. Sustainability leadership and culture embeds CSR into how employees and executives think about strategy and execution. Recent economic downturn raised importance of sustainability as an issue for top management to 80 percent[1].


[1] Aman Singh, New Survey: CEOs See Sustainability Shifting From Choice To Corporate Priority, Forbes,6/23/2010

 

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Priority topics 2011-2013 – CSR Europe – Repost

In the globalised world, issues such as demographic change, global poverty, environmental degradation or developing a skilled workforce for the knowledge-based economy become increasingly intertwined and extend across national borders and industrial sectors. Tackling them effectively requires joint action from companies, governments, stakeholders and the civil society. Faced with today’s complex environmental and socio-economic challenges, progressive companies are gearing up for a CSR approach focused on cooperation and innovation.

Through active engagement in Enterprise 2020, many enterprises and stakeholders are able to lead on collaborative projects and in doing so, develop though leadership and practical tools for companies and their stakeholders. In this respect, under the umbrella of Enterprise 2020, CSR Europe has prioritised six focus topics for the period 2011-2013. 

1. Supply Chain and Human Rights

Key EU and international frameworks have prioritized human rights and responsible supply chains for businesses – and particularly European and European-based companies. Despite the business sensitivities around human rights and supply chain issues, companies need to take a proactive approach to address the risks and opportunities of CSR and human rights in their operations.

2. Health and Wellbeing

Health literacy activities in the business context create value not only for employees, but also for businesses. By investing in a health- friendly work environment, businesses can increase employee well- being and productivity, thus reducing absences and lowering costs. Businesses play an important role not only as employers, but also as advocates for health in society. Technology and social networking can raise awareness and health literacy of employees and society as a whole, fostering a healthier lifestyle for all.

3. Ageing and Demographic Change

The European population is shrinking and ageing at the same time. The number of those older than 55 years is steadily growing, while all younger age groups are shrinking: Fertility rates in most EU member states have remained below replacement levels developed countries over the past 30 years. Individuals aged 50 and over already represent 20%. The number of people over 60 years will increase by 2 million every year. Eurostat predicts a possible labour supply shortage of 15% by 2050, which represents an unemployment gap of 35 million people. In light of these demographic changes, it is crucial for business, policy makers, and society at large to radically change their entrenched ways of thinking.

4. ESG Disclosure and Reporting

Research continually shows that CEOs and investors regard valuation of non-financial performance as a crucial issue. However, companies are slow to integrate non-financial performance (NFP) measurements into mainstream business strategy internally and to communicate it externally; and investors are slow to incorporate non-financial indicators into valuation models. ESG factors are nevertheless seen as key drivers of NFP and they contribute to the company’s ESG strategy.

5. Financial Education

Across Europe people are unable to save enough money for their retirement as countries face an unprecedented pension’s gap. Two financially vulnerable groups that stand out are young adults and pre-retirees. In several European countries, state retirement ages are being increased while provisions of defined benefit pensions are being decreased. This is also leading to more individualised pension decisions.

 6. Base of the Pyramid

Many companies are seeking to create new business models and partnerships which aim to alleviate poverty and deliver economic results through ‘Base of the Pyramid’ strategies. However, there is scope for better understand how to successfully develop and maintain effective cross-sector and multi-stakeholder approaches that partner with BoP groups in a mutually inclusive value chain.

To read more about other Enterprise 2020 projects, driven by CSR Europe’s members and national partners, please click here.

 

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Transparency Needs to Have Integrity

I recently received an email from a cousin of mine. She often sends stories and jokes that would interest me.

This was an anecdotal story about ethics, honesty and integrity.

The author is not known but the lesson discussed should make any CEO consider that their core values are one of the most valuable assets in their business.

A successful business man was growing old and knew it was time to choose a successor to take over the business.

Instead of choosing one of his Directors or his children, he decided to do something different. He called all the young executives in his company together.

He said, “It is time for me to step down and choose the next CEO. I have decided to choose one of you. “The young executives were shocked, but the boss continued. “I am going to give each one of you a SEED today – one very special SEED. I want you to plant the seed, water it, and come back here one year from today with what you have grown from the seed I have given you. I will then judge the plants that you bring, and the one I choose will be the next CEO.”

One man, named Jim, was there that day and he, like the others, received a seed. He went home and excitedly, told his wife the story. She helped him get a pot, soil and compost and he planted the seed. Everyday, he would water it and watch to see if it had grown. After about three weeks, some of the other executives began to talk about their seeds and the plants that were beginning to grow.

Jim kept checking his seed, but nothing ever grew.

Three weeks, four weeks, five weeks went by, still nothing.

By now, others were talking about their plants, but Jim didn’t have a plant and he felt like a failure.

Six months went by — still nothing in Jim’s pot. He just knew he had killed his seed. Everyone else had trees and tall plants, but he had nothing.  Jim didn’t say anything to his colleagues, however, he just kept watering and fertilizing the soil – he so wanted the seed to grow.

A year finally went by and all the young executives of the company brought their plants to the CEO for inspection.

Jim told his wife that he wasn’t going to take an empty pot. But she asked him to be honest about what happened. Jim felt sick to his stomach, it was going to be the most embarrassing moment of his life, but he knew his wife was right. He took his empty pot to the board room.

When Jim arrived, he was amazed at the variety of plants grown by the other executives. They were beautiful – in all shapes and sizes. Jim put his empty pot on the floor and many of his colleagues laughed, a few felt sorry for him!

When the CEO arrived, he surveyed the room and greeted his young executives.

Jim just tried to hide in the back. “My, what great plants, trees and flowers you have grown,” said the CEO. “Today one of you will be appointed the next CEO!”

All of a sudden, the CEO spotted Jim at the back of the room with his empty pot. He ordered the Financial Director to bring him to the front. Jim was terrified. He thought, “The CEO knows I’m a failure! Maybe he will have me fired!”

When Jim got to the front, the CEO asked him what had happened to his seed, Jim told him the story.

The CEO asked everyone to sit down except Jim. He looked at Jim, and then announced to the young executives, “Behold your next Chief Executive Officer! His name is “Jim!” Jim couldn’t believe it. Jim couldn’t even grow his seed. “How could he be the new CEO?” the others said.

Then the CEO said, “One year ago today, I gave everyone in this room a seed. I told you to take the seed, plant it, water it, and bring it back to me today. But I gave you all boiled seeds; they were dead – it was not possible for them to grow.

All of you, except Jim, have brought me trees and plants and flowers. When you found that the seed would not grow, you substituted another seed for the one I gave you. Jim was the only one with the courage and honesty to bring me a pot with my seed in it. Therefore, he is the one who will be the new Chief Executive Officer!”

• If you plant honesty, you will reap trust.
• If you plant goodness, you will reap friends.
• If you plant humility, you will reap greatness.
• If you plant perseverance, you will reap contentment.
• If you plant consideration, you will reap perspective.
• If you plant hard work, you will reap success.
• If you plant forgiveness, you will reap reconciliation.

Think about this for a minute. Now, don’t you agree Transparency needs to have a SEED of integrity as a foundation to your Sustainability approach? Can you see how its absence could produce poor business decisions that could dramatically impact your legacy? Have you considered the impact to the financial markets, too? If you plant integrity, you will reap an abundance from its benefits. It’s an idea worth thinking about …

So, be careful what you plant now; it will determine what you will reap later.

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What CEOs Want

Here are the 10 key issues that typically lead a CEO or business owner to decide to exit the business, usually through a sale, at less than desirable financial results.

•    The company is overly dependent on short-term debt. No cash reserves have been established to meet short-term cash situations. Also, cash shortages preclude funding essential business growth strategies. Serious cash needs can cause short-sighted actions.
•    Management structure is too thin. The CEO is so tied to the business that there are no resources for the CEO to share management responsibilities. Thus decision-making, sales, marketing, operations and growth are restricted to the CEO’s abilities and available time.
•    There is no succession planning. There is no training and grooming of a potential trusted successor. And, there is no active plan or resources to recruit from the outside if an internal candidate is not available.
•    Managers have no “ownership” in the business. Senior managers are vulnerable to outside offers when they have no real economic ties to the business. Equity incentives or bonus plans can support vested interest in business performance or solid, committed succession.
•    A specific business strategy is lacking. There is no strategic business plan to focus resources effectively toward goals and to increase profits. This is critical and rarely done consistently in small business today.
•    The CEO dies or is disabled. Being prepared for the calamities that can ruin a business is a responsibility a lot of business owners do not take seriously enough. Insufficient financial and management preparation for the death or disability of the CEO can create chaos for those left to sort out the issues.
•    There is disproportionate risk through personal guarantees. Because of personal financial guarantees required for the business, a major crisis could ruin the business owner. Overlooked are the opportunities to share the responsibility and liabilities of the business.
•    Family and other ownership issues exist. Family succession, majority shareholder issues including divorce, the death or departure of a shareholder, or even conflict between shareholders often precipitate non-economic exit decisions. More often than not, decisions are made with more emotion than reason. The opportunity most often neglected is to engage a business advisor to assist in sorting out the varied interests and prepare viable alternatives in advance.
•    The business is no longer enjoyable or CEO fatigue sets in. Many CEOs and business owners reach a point where they no longer wish to endure the pressures of the business. They have lost their enthusiasm and commitment. This condition is not only an impediment to growth, it often creates a lull that puts the business in a vulnerable position. An interim, part-time CEO/business advisor may be the alternative that works best outside of a sale of the
business.
•    The assets of the CEO or business owner are unbalanced. Most personal assets are in the value of the business. Little independent retirement savings have been established for the CEO/major shareholders in the event of a business downturn. In the absence of a strategic exit, the sale of the business is required as a retirement alternative.

Source: CEO Advisor Blog, This entry was posted on October 6, 2010. You can follow any responses to this entry through the RSS 2.0 feed. Retrieved: 30 November 2010

Source: Jarvis Business Solutions, LLC, © 2011, For services: www.JarvisBusinessSolutions.com

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