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Being Socially Responsible Helps Others and Your Company
|Gelman, Rosenberg & Freedman CPAs is a member of CPAmerica International, an association of CPA and consulting firms that provides industry knowledge including insightful articles, to help member firms serve clients and other individuals and organizations.|
Oct 24, 2012
Making corporate social responsibility initiatives part of your strategic plan not only will benefit the world around you, but will boost employee satisfaction and improve the bottom line.
In recent years, goodwill as related to corporate social responsibility has risen to the forefront of business competitiveness. Stakeholder perceptions of company behavior are the lead driver of enterprise value, according to The Reputation Institute, which surveys best practices among executives.
Companies with strong reputations are worth up to 150 percent more than those with low reputations, the institute found.
Corporate social responsibility programs can be grouped into philanthropy, community involvement and social innovation initiatives. A company’s efforts may be as simple as sponsoring the local Little League team or as complex as managing a global supply chain.
For example, the Dodd-Frank Act requires American companies to report their sources for so-called “conflict minerals,” including tin, tantalum, tungsten and gold, often purchased from war-torn African countries. The aim is to reduce funding for terrorist activity. Some of the sectors affected include manufacturers of electronic components, tools and gold jewelry, as well as the companies who subcontract production to them. Companies operating globally cannot afford to ignore human rights and environmental issues in countries where they have business relationships.
Sustainability is a growing piece of the reputation puzzle. Sustainability initiatives result in stronger public image and brand recognition, the Society for Human Resource Management found in its Advancing Sustainability study.
The group defines sustainability as “the commitment by organizations to balance financial performance with contributions to the quality of life of their employees, the society at large and environmentally sensitive initiatives.”
Last year, more than 5,000 companies submitted sustainability reports to the Corporate Register, which holds an annual competition. The self-reporting shows an awareness of the benefits in positioning a business as a good corporate citizen.
Employee engagement also drives company reputation and performance.
“Employees who work for organizations that offer corporate citizenship are significantly more engaged than employees who work for organizations that don’t,” according to Sarah Ketvirtis of Northwestern University, who studied the correlation.
The study found that the most favored programs by employees were sustainability and social initiatives, followed by charitable donation matching and volunteering. Employees not only want their employer to be socially responsible, but also to contribute themselves.
Programs such as corporate support of recycling, reuse of materials or redesign of products to increase their benefit to society give employees the opportunity to participate themselves in social responsibility, the report said.
Employees are your face in the community and as such are key partners in your social responsibility efforts.
Having employees participate in social initiatives will boost their satisfaction while building your company’s public profile, according to studies by Kenexa Research Institute, a leader in employee behavior research. Companies with high employee engagement also perform higher in many key financial measures, the report said.
This was my first time working with auditors and I was bracing for a tough audit and tax experience, but Jim Larson and his engagement team of Bob Maleta and Hang Hoang were very patient, kind and accommodating in breaking down their complex questions into layperson’s terms I could understand.
Carol | Binstock
The Quixote Center