Communications

And The Nominees and Winners Are…

The magazine’s editors announce finalists and winners for the Responsible CEOs of the Year.

By the Editors

THE WINNERS:

Gale E. Klappa, Chairman, President and Chief Executive, Wisconsin Energy
After taking the helm in 2004, Klappa cut upward pressure on customer rates while also executing a major plan to improve state energy infrastructure, including a focus on renewables.

Jeffrey Ettinger, Chairman of the Board, President and Chief Executive Officer, Hormel Foods Corporation
As Hormel Foods CEO, Ettinger was instrumental in helping set a new standard of transparency and sustainability through robust employee engagement and LEED-certified facility expansion.

Hikmet Ersek, CEO, Western Union
Financial Services
Hikmet Ersek has inaugurated a sea change in the way Western Union does business, focusing particularly on the rights of migrants and immigrants worldwide.

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The Straw That Stirs the Drink

Selling CR is highly dependent on the internal communications skills of those who preach it.

Sustainability—little more than a buzzword in the corridors of corporate America a decade ago—today is a business concept that has been embraced by many companies in principle and, increasingly, in practice.

Yet, while more and more companies are integrating corporate sustainability strategies and programs into their daily business operations, sustainability, like a Rorschach inkblot, is prone to multiple interpretations. Is it a corporate citizenship initiative? A compliance function intended to appease stakeholders who might create friction? A competitive advantage to leverage with customers?

A strategy to attract and retain talent?

Indeed, despite the growing visibility of sustainability within corporations, leaders charged with integrating this emergent function must often operate in unique ways compared to other well-established C-suite positions.

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Board Brains

Using neuroscience to improve decision making.

By Larry J. Bloom

Board directors are facing a rising problem. They are increasingly responsible for compliance, governance, and corporate responsibility, which are essential to organizational decision making. Yet decision making also depends on the efforts of real people. And real people are flawed.

Can the law or internal policies change the way that individuals receive and filter information, or is the human component of risk management an inevitable limitation? The field of neuroscience is starting to shed light on the importance of understanding the workings of the human brain when developing strategies and making decisions. It suggests that improving decision quality requires a better understanding of the human element.

The most sweeping corporate governance reform in any country in five decades, the Sarbanes-Oxley Act (SOX) of 2002 was overwhelmingly passed by an emotional United States Congress in the wake of major corporate and accounting scandals and the popping of the internet/telecom equity bubble.

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The Importance of Recognition

It’s okay—toot your own horn.

By Stephen Jordan

Many people love to be recognized, except maybe corporate responsibility officers. This state of affairs has to change. The thing is, some people receive too much recognition, while CROs should seek more.

What do I mean? Well, for any of you who have kids, this story might ring true. When my daughter was seven, she played soccer, and at the end of the season one enterprising parent bought trophies for the kids. For what? I don’t know, because no one kept score at any of the games.

This is just an anecdote, but polls and test scores indicate that Americans rank first in self-esteem but are slipping in terms of effective skills and knowledge acquisition.

When everyone thinks they’re special, two bad realities can happen. The first is that they often don’t believe that they have anything to learn from anyone else.

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Top Provider Rankings—PR, Communications and Advertising Firms

We rank the top providers of cause marketing solutions.

Service providers offer important tools for the corporate responsibility officer. One key partner is the communication firm. Being a good corporate citizen is necessary but not sufficient. Absent an effective effort to communicate such ideals and actions, CR is reduced to the tree falling in the empty forest.

Customers, shareholders, and employees all need to know what the mission is and how it’s being realized. Not just for brand development—and especially not in pursuit of anything that flirts with greenwashing. Rather, public relations in this sphere is integral to advancing the cause itself.

Corporate responsibility officers, or CROs, are at a similar point of evolution as human resources leaders prior to 1980. HR was then known as personnel, or, in unionized companies, labor relations. The professional association was the American Society of Personnel Administrators, with barely 3,000 individual members.

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Commit! Debate: A Logical Trap

The case against expending resources on corporate responsibility.

Dr. Aneel Karnani and Gerry Sullivan

The idea that companies can do well by doing good has caught the attention of executives, business academics, and public officials. It is argued that firms have a corporate responsibility (CR) to achieve some larger social goals, and can do so without a financial sacrifice. The most important driver of corporate interest in CR is the argument that corporate virtue delivers financial rewards. Approached strategically, in this view, CR need not be a cost, and can be a source of competitive advantage. It is not surprising that this idea has convinced many people—it is a very appealing proposition. You can eat your cake and have it too! Not satisfied with doing well by doing good, Indra Nooyi, CEO of Pepsi Company, goes one step further and urges companies to “do better by doing better.

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You Are A CRO

Workers at all levels can take action to improve corporate citizenship.

By Richard J. Crespin

“Globalization and the information technology revolution have gone to a whole new level,” wrote Thomas Friedman earlier this year in the New York Times. “Thanks to cloud computing, robotics, 3G wireless connectivity, Skype, Facebook, Google, LinkedIn, Twitter, the iPad, and cheap Internet-enabled smartphones, the world has gone from connected to hyper-connected.”

Now, thanks to the globalization/IT revolution you can be a corporate responsibility officer (CRO).

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From the Many, One

The path to integrated corporate reporting.

By Steve Mignogna

These days, most annual reports are little more than a letter from the CEO and a page or two of highlights wrapped around the 10-K. No context to help explain good or bad performance, no details or proof points about long-term vision, and certainly no effort to help an average shareholder understand the management discussion and analysis (MD&A) section. Institutional investors have the luxury of listening to a CEO firsthand and asking questions in analyst meetings and in one-on-one calls. But it’s almost impossible for individual investors to get the whole picture, especially if they’re concerned about the company’s impact on the larger world and its financial implications.

Whether for reasons of conscience or the growing realization that bad citizenship hurts the bottom line, solid evidence exists that investors are taking increased note of corporate behavior.

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How Do We Rate?

We’re on the cusp of new CR standards, and that requires caution.

By Richard Crespin

This spring, I spent a lot of time in the deep-end of the corporate responsibility ratings pool. Among other things, I participated in a workshop in Washington, D.C., organized by SustainAbility to reflect on the findings of their Rate the Raters report. I was also part of a Better Business Bureau panel aimed at roughly the same topic.

Now for the feedback. Dozens of ratings systems have sprung up to evaluate various aspects of corporate responsibility. This proliferation of good intentions has led to overload: companies can’t keep up with all the data calls. As a result, a cry has gone up to standardize on a common set of data elements for rating CR. Moreover, the users of the data—the people who make purchasing and investment decisions based on it—want predictive data, not the retrospective data that makes up most ratings today.

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Commit! CR’s Call to Arms

How CR evolved from inside-baseball to the world’s biggest CR playing field.

By Jay Whitehead

When Marjorie Kelly printed the first edition of Business Ethics Magazine in 1987, she recently admitted by phone, she had only a hint of where her invention would lead. “I had hopes and vision,” she told me, “but no

crystal ball.” Her idea of the role of the corporation, as reflected in her 2001 book The Divine Right of Capital, was a more democratically responsible form.

To those in the then-fledgling field of Socially Responsible Investing, or SRI, Kelly’s big innovation was the elegantly-conceived “100 Best Corporate Citizens List.” It was a great leap forward. The List, whose data was then provided by Boston-based KLD Analytics (first acquired by RiskMetrics Group in 2009, then re-gobbled in 2010 by MSCI Inc.), featured a golf handicap-like scoring system that allowed computer companies to compete with coffee companies, plane makers with pet stores.

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