What Board Members Should Know About Communicating Corporate Social Responsibility

by Matteo Tonello from The Conference Board. Published by The Harvard Law School Forum, April 26th, 2011.

Since creating stakeholder awareness is a key prerequisite for reaping the strategic benefits of any business initiative, it is imperative for board members and senior executives instituting a social responsibility program to have a deeper understanding of the key issues related to CSR communication. This report discusses what to communicate (i.e., message content) and where (i.e., message channel), as well as the major factors (internal and external to the organization) that affect the effectiveness of CSR communications.

Corporate social responsibility (CSR), defined broadly as “a commitment to improve [societal] well-being through discretionary business practices and contributions of corporate resources,” occupies a prominent place on the global corporate agenda in today’s socially conscious market environment. [1] More than ever, companies are devoting substantial resources to various social and environmental initiatives—ranging from community outreach and neutralizing their carbon footprint to socially responsible business practices in employment, sourcing, product design, and manufacturing.

These unprecedented CSR efforts are driven not only by the ideological construct of a corporation as a force for social change but also by the financial return that could be reaped from such endeavors. Surveys of senior executives and CSR professionals indicate that CSR creates unique business value in a number of ways—by building reputation, enhancing employee morale, and strengthening competitive positions. [2]

Consistent with these findings, a growing body of academic research attests that:

  • A company’s positive record of CSR fosters consumer loyalty and, in some cases, can turn customers into brand ambassadors and advocates who may be willing to even pay a premium to support the company’s social policies. [3]
  • CSR may offer a competitive advantage in attracting, motivating, and retaining talented employees [4] and socially responsible investors. [5]

Stakeholders (customers, employees, and investors, among others) are key to the success of any business, and CSR has the unique ability to cultivate stakeholder relationships. (continue reading… )

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