Paul Holmes 01 Dec 2002 // 12:00AM GMT
As corporate scandals continue to plague many prominent companies, American consumers, employees and investors say they are willing to act against socially irresponsible companies. At the same time, Americans are just as eager today as they were in the months following the tragedy of September 11 to reward good corporate citizens, maintaining record highs of public support for companies that address social needs.
According to the 2002 Cone Corporate Citizenship Study, an overwhelming majority of Americans say they would consider switching to another company’s products or services (91 percent); speaking out against that company among family and friends (85 percent); refusing to invest in that company’s stock (83 percent); refusing to work at that company (80 percent); or boycotting that company’s products or services (76 percent).
Seventy-eight percent of Americans today say that companies have a responsibility to support social issues, a figure nearly identical to the finding from Cone’s October 2001 survey (79 percent) and 20 percent higher than the pre-tragedy result from Cone’s March 2001 poll (65 percent).
It seems that the recent corporate scandals have only reinforced Americans’ expectations of corporate citizenship. Eighty-nine percent say that in light of the Enron collapse and WorldCom financial situation, it is more important than ever for companies to be socially responsible.
“With corporate citizenship a high American priority, and with a majority of citizens willing to exercise their individual power, the consequences of corporate social irresponsibility have never been more severe,” says Carol Cone, CEO of the Boston-based public relations firm. “On the other hand, our research demonstrates that Americans are willing to reward good corporate citizens, so companies that integrate their social commitments into business strategy can reap the benefits of ‘positive’ activism.”
Nearly nine in ten Americans (86 percent) agree that companies should communicate their support of social issues. Highlighting Americans’ deep mistrust of companies today, however, an overwhelming majority say they prefer to find out about corporate citizenship activities from a third-party source, particularly:
· News article or editorial (51 percent)
· Corporate Web site (36 percent)
· Direct mail (30 percent)
· Corporate annual report (30 percent)
Says Cone,“More than ever, Americans want to know about companies’ corporate citizenship activities, and they will form opinions of a company’s brand based on those efforts. Companies must respond to this heightened sense of activism by behaving ethically in all of their business practices, which certainly include their social commitments. The rewards for good corporate citizens are enhanced reputation and stakeholder loyalty; on the other hand, corporate ‘bad guys’ face an empowered citizenry that is ready and willing to use its resources to punish companies that do not share their values.”
Based on the study’s findings, Cone offers the following best practices in corporate citizenship:
· Implement corporate citizenship policies across the board. Although an overwhelming 86 percent of Americans say that supporting social needs is an important activity for companies to rebuild their trust with stakeholders, it is only one component of corporate citizenship. First and foremost, companies must be transparent in disclosing financial information; treat employees fairly; offer quality, reasonably priced products and services; adhere to laws and regulations; and adopt environmentally safe business practices.
· Build your values into corporate culture. Companies should integrate their corporate values into all aspects of their business and empower a decision-making task force and day-to-day champions to execute corporate citizenship activities and bring those values to life.
· Do what you say, say what you do. In this time of heightened scrutiny of Corporate America, it is more important than ever for companies to “walk the talk” – today’s savvy Americans will react negatively to insincere claims. At the same time, Americans want to know about companies’ social commitments, so businesses should tell them. Transparency and honest communications are critical in today’s corporate environment.