In recent years, we’ve observed a growing demand for corporations to implement sustainable and fair practices that go beyond the interests of the organization. And while investor pressure certainly plays a large role in the matter, consumers—especially millennials—have joined the fight in strides.
It is perhaps because of this group of 23- to 38-year-olds, which represents the largest generation of consumers benefiting from the greatest transfer of wealth in our nation’s history, that 56% of corporate directors who participated in our 16th annual What Directors Think study, conducted in partnership with Grant Thornton LLP, confirmed that their company has adopted a policy of social responsibility.
Malcolm Hotchkiss, a member of the Audit and Nom/Gov committees at California-based BayCom Corp, says consumers are now in the driver’s seat, influencing both the board and shareholders. “And I think they have a right to,” he says. “We evolve and we’re evolving now, and I think this evolution process that we’re doing is a natural course of what we do to become a better society both personally and corporately.”
Interestingly, only one surveyed director out of 10 said they believe corporate social responsibility policies bring awareness to important social issues. Instead, the majority of respondents (53%) said CSR policies serve to promote their brand, increase sales and attract employees.
Hotchkiss agrees that some companies tread a fine line between doing good and using CSR as a marketing tool. He gives the example of California’s PRIDE industries, a nonprofit organization that helps people with disabilities prepare for employment and more independent lives. “We’ve seen companies come in and say, ‘I’ve hired three PRIDE employees at my company.’ Well, congratulations. But why didn’t you do that five years ago?”
Kim Box, an independent director at two public company boards, says that how a company engages with the community that it affects needs to, indeed, be very thoughtful and come from the right place in order to be meaningful. She says she’s always been a very big proponent on how a company can affect both what they’re trying to do with growing a very big business along with how you can make a positive impact in the world.
“When you look at it from a business perspective, it’s absolutely imperative,” she says. “And there’s a bunch of reciprocal things that occur when you do social responsibility. There’s a lot of business engagement that occurs, and so this doesn’t get any better than that. If you can run a really great business along with improving your community or other things in the world, then why wouldn’t you do that?”
Nichole Jordan, National Managing Partner of Markets, Clients and Industry at Grant Thornton LLP, says executives who dismiss CSR as merely a marketing tactic or won’t move to implement such a policy at their company will not be able to attract or retain top talent or customers in the future.
“To attract and retain high-performing employees in the war for talent, corporate values are key. The most highly skilled and sought-after employees also care greatly about CSR. Future-focused companies with an authentic strategy to create value in their communities and for the environment also tend to demonstrate a strong commitment to the success and growth of their people. CSR helps drive employee engagement, which helps increase business value and competitive advantage over time,” Jordan says.