The following is part of a series by our friends at CSRHub (a 3p sponsor) – offering free sustainability and corporate social responsibility ratings on over 5,000 of the world’s largest publicly traded companies. 3p readers get 40% off CSRHub’s professional subscriptions with promo code “TP40“.
Originally published in the CSRHub Blog.
By Bahar Gidwani
Recently, CSRHub has seen and learned a few things about how to push the C-Suite (the CEO, CFO, CMO, etc.) of a company to commit to sustainability and CSR (corporate social responsibility). We will discuss three “Cs” for effecting this change—Cajoling, Calculating, and Competition—and make some recommendations about how best to employ them.
Cajoling has been the traditional approach to pushing the C-Suite towards CSR. Investors and non-governmental organizations (NGOs) have used letter-writing campaigns, boycotts, and shareholder resolutions to get the attention of the C-Suite for the issues they champion. There have also been “nudges” from popular business books and consultants, and we know of cases where the spouses, children, or parents of C-people have prompted them to shift their views.
Sometimes a fresh face at the C level or a new board member seems to encourage a fresh look at a company’s goals. Two recent Catalyst studies showed that companies that have more women board members generate higher returns on investment, sales growth, and returns on their assets. We can measure the connection between data such as the 2010 Alliance for Board Diversity Census on board diversity and overall performance on our CSRHub CSR rating system.
Another big influence on the views of the C-Suite comes from the attitudes of their employees. Some companies have formal systems for assessing the social views of their employees. Many more get input through everyday interactions, strategy reviews, and brand and product decisions. If a company’s employees strongly agree on a social issue, it is difficult for the C-Suite to ignore this. Government regulators (and congressional hearings) sometimes do their part to cajole and argue for change, as well.
This is a pretty long list of “cajolers,” but their effects may be intermittent and unpredictable. Is there a well-understood tool we could use to give the occupants of C-Suites a poke? Our next post will look at one of the most popular management tools—the ROI calculation.
Bahar Gidwani is a Cofounder and CEO of CSRHub. Formerly, he was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses and has experience building a multi-million visitor Web site. Bahar holds a CFA, was a partner at Kidder, Peabody & Co., and worked at McKinsey & Co. Bahar has consulted to both large companies such as Citibank, GE, and Acxiom and a number of smaller software and Web-based companies. He has an MBA (Baker Scholar) from Harvard Business School and a BS in Astronomy and Physics (magna cum laude) from Amherst College. Bahar races sailboats, plays competitive bridge, and is based in New York City.