Social Responsibility

What I Saw at the Revolution

A former CR practitioner looks back on the movement’s antecedents—and revival.

By Tom Kiely

Corporate social responsibility, sustainability, and shared value are terms I use all the time but don’t much like. Many people say (and I’ve joined this chorus) that the terms come loaded with too many meanings, have roots too deep in frameworks and concepts long-since outdated, and thus are only useful today in a short-hand kind of way. They are terms that seem to require clarification. “By CSR I mean…and I don’t mean…”

Terms and concepts won’t settle to clarity soon. During the last decade, momentum of activity and thinking within the business community on a broad range of issues that are clustered behind these terms has increased markedly. The number of late-comers (including me) who pitched in to help build on the work of others has been accelerating, as have the commitments of many executives and the attention of investors.

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CR 3.0: Good & Networked

Visibility, connectivity, instantaneity, and scale—welcome to the new world of corporate citizenship.

By Richard Crespin

Neanderthals, once regarded as the bigger, dumber, slower precursor to us Homo sapiens, might have actually been stronger, smarter, and faster than us. But the archeological record shows that every time Homo sapiens encroached on Neanderthal, Neanderthal eventually died out. The working theory: while smaller in both body and brain, Homo sapiens out-collaborated the more hermetic Neanderthal. Our principle competitive advantage as a species is our ability to collaborate. In fact, an increasing body of evidence across multiple fields of study shows that the propensity to collaborate has a profound impact on the success or failure of human endeavors, including corporate responsibility.

In a forthcoming study by the U.S. Chamber of Commerce Foundation, the research team (of which I was part) found that leaders in corporate responsibility are borrowing a number of lessons from other parts of business on collaboration in general and on how to use “network effects” in particular.

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2013 100 Best Corporate Citizens List

Our annual chronicle of transparency and accountability includes more than 25 companies that were not on last year’s list.

By The Editors

What follows is CR Magazine’s 14th annual recognition of the standout performers among public companies across the United States. Representatives from the final list joined Newark Mayor Cory Booker for the unveiling at the New York Stock Exchange in April.

The 100 Best List documents 298 data points of disclosure and performance measures—harvested from publicly available information in seven categories: environment, climate change, employee relations, human rights, governance, finance, and philanthropy. The list is drawn from an involuntary audit of companies on the Russell 1000 Index.

“We are pleased to honor the companies on this year’s Best List, as they represent a tried and true standard of transparency within the Russell 1000,” said Dirk Olin, Editor-in-Chief and Publisher of CR Magazine.

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Corporate Responsibility From the C-Suite

In assessing the many stakeholders affected by any CR initiative, consider a new gauge: return on impact.

By William B. Horne

The traditional view of prioritizing investments and decisions around corporate social responsibility (CSR) has changed in recent years, due to a significant shift in how companies communicate with their constituents and the public’s expectations on the way businesses operate. While companies could once focus almost exclusively on their products or services, they are now also expected to play a role in creating a positive impact through actions focused on safeguarding the welfare and interests of the society they serve. C-level executives are becoming increasingly aware of how public perception of their CSR initiatives can have a direct impact on their bottom line and are thus taking a closer look at their strategic plans in this regard.

The concept of CSR started to pick up momentum in the early 1970s, but the world has changed greatly since then.

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Meaty Questions

Hormel CEO Jeffrey Ettinger discusses transparency, hunger relief, and animal welfare.

By Dirk Olin

Jeffrey M. Ettinger is chairman of the board, president and chief executive officer at Minnesota-based Hormel Foods.
He joined the company in 1989 and has served in a variety of roles, including senior attorney, product manager and treasurer. In 1999, he was named president of Jennie-O Turkey Store—the firm’s largest subsidiary—and he was
appointed president of the entire operation in 2004 and CEO in 2005. Today, he oversees all functions and operations at the multinational, which most recently clocked in at $8.2 billion.

Under Ettinger, Hormel has grown through strategic acquisitions and a focus on new product innovation (part of a broader company philosophy he dubs “continuous improvement.”) The company’s common stock was added to the Standard & Poor’s 500 Index in 2009, and Hormel increased dividends for the 47th consecutive time in November 2012, despite economic and industry challenges.

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Honor Thy Mother

Boards with more women typically enrich the bottom line and lower risk.

By R. Paul Herman and Zhaoqi Fu

If a Credit Suisse report showed that your company’s return on equity (ROE) could be one-third higher than your competitors by just changing one factor, would you consider making that change?

Many global companies have ignored this factor, even though it comprises one half the population, one half the talent pool, and one half or more of most customer bases. The factor is the number of women on the board of directors. It is a meaningful indicator for potential increases in return on equity: Of 2,560 companies reviewed globally between 2005 and 2011 by Credit Suisse, those with no women on the board averaged 12 percent ROE, while those with one or more women on the board averaged 16 percent ROE—and with less volatility. How many women are on your board of directors? Does the percentage match your customer base and talent pool?

Gender inequality on corporate boards is increasingly a hot topic, especially with Facebook COO’s Sheryl Sandberg’s new book Lean In.

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100 Best: Most Improved

The biggest movers in the 100 Best Corporate Citizens List.

By The Edtiors

As with all of our Best Corporate Citizens lists, we use the same methodology for the Most Improved Corporate Citizens list as we do for the 100 Best Corporate Citizens list with some additional data analysis. (Visit for a full description of our methodology.) The Best Corporate Citizens database comprises publicly-available data from Russell 1000 companies collected and analyzed by IW Financial, a Portland, Maine-based financial analysis firm serving the ESG (Environment, Social, Governance) investment community.

For the Most Improved Corporate Citizens list, we identify all companies in the top half of the Russell 1000 (this is in order to establish a starting set of companies that have achieved at least a minimal level of performance) that have been listed in the Russell 1000 for two years.

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From Spare Change to Real Change

How IBM’s corporate service corps solves problems, grows leaders, and builds markets.

By Stanley Litow

Corporate responsibility has its beginnings in philanthropy, which in America has a long history. It began in earnest with individuals of great wealth, such as Henry Ford, John D. Rockefeller and Andrew Carnegie. They amassed outsized fortunes through their business activities and then used that wealth to create foundations to distribute large amounts of cash directed at specific issues they were interested in. Carnegie’s activities in support of public libraries are an example. The philanthropy of these individuals, which has survived for more than a century, is now complemented by Bill Gates and other individuals of great wealth. Foundations funded by great personal wealth can be transformative by providing needed support to worthy causes. But the tradition of amassing personal wealth and then distributing it through foundations seldom has involved incorporating a culture of citizenship and service into business practices.

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Consider the Source

As CR programs mature, they must constantly refine focus beyond their own companies.

By Kenzie Ferguson

As more companies embrace socially important values, principles, and guidelines, they are requiring suppliers to comply with their standards. They are developing supplier social responsibility programs to clarify expectations and requirements. Many companies recognize that they are inextricably linked with their suppliers in the eyes of customers, shareholders, media, and other stakeholders.

If an issue arises with a supplier that reflects negatively on a company, the company is put in a difficult position. The company must protect its reputation, find the root cause, and face any financial and legal consequences. The potential for problems has grown as supply chains have become more global and complex, and the demands for corporate responsibility and transparency have risen.

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The Second Responders

How—and why—business is uniquely positioned to help with long-term disaster relief.

By Richard Crespin

When you compare before and after photos from Hurricanes Rita or Katrina or the tornado in Joplin, MO, it looks like God took out His eraser and wiped the slate clean. Whatever was there before is just gone. Touring the zones impacted by Superstorm Sandy, as I did in January with a business delegation led by the US Chamber of Commerce Foundation’s Business Civic Leadership Center (BCLC), reveals a different scene. As we’d pull in to different communities, the telltale signs weren’t there. No huge tracts of destroyed houses. No big piles of rubble. No high water marks on houses and buildings.

I’d often find myself saying, “Oh, this isn’t so bad,” until we actually went inside of homes or talked to people.

“When we first came in [after the storm], it was still dark.

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