The ROI Of Corporate Social Responsibility

responsibilityAfter focusing intensely on the composition of boards, institutional investors have begun shifting their focus to the social involvement of corporations. And they’re not the only ones clamoring for more corporate social responsibility. Increasingly, the public is demanding it as well, fueled by social media and a demand for greater disclosures.

In our annual quest to reveal the preoccupations of America’s boardrooms, the most recent “What Directors Think” survey conducted by Corporate Board Member and Spencer Stuart found that directors are a step ahead of the curve when it comes to social awareness and the need for greater corporate accountability. In fact, half of our respondents said their company had a corporate social responsibility (CSR) policy in place, with an additional 10 percent saying they had one in the works.

When it comes to the rationale for implementing such policies, 57 percent of public company directors said an enhanced brand image and reputation and a greater ability to attract and retain employees are the two biggest benefits for the company.

“Sustainability and corporate social responsibility have become hotter topics in the boardroom,” notes Julie Hembrock Daum, North American Board Practice Leader at Spencer Stuart. “Boards are hearing from investors and other company stakeholders more often on environmental, social and governance issues, and they’re aware that the next generation of employees and leaders want to work for organizations that take social and environmental health considerations seriously.”

Nevertheless, despite the mounting pressure from shareholders—and most recently BlackRock’s January 16 letter to CEOs—and the perceived value of a CSR on brand image vs. performance, the directors we surveyed ranked ESG initiatives and sustainability at the bottom of their list of priorities this year. We will have to wait and see to determine whose side will prevail in this area, but one thing is for certain: We are in a period of rapid change, and boards that capture the moment as an opportunity to grow are likely to stand out from the crowd.

Download the full “What Directors Think” report to read what other directors have to say about corporate social responsibility>>