January 29, 2008
New Survey Uncovers Discrepancies on Corporate Citizenship Issues
by Anne Moore Odell
There is gap between what executives say on corporate citizenship and what their corporations
actually do, finds a survey of over 750 executives.
A survey released by the Boston College Center for Corporate Citizenship (BCCCC) and The Hitachi
Foundation shows CEOs and other executives support responsible corporate citizenship, at least
in principle. The third biennial 2007 State of Corporate Citizenship in the US, "Time to get real:
Closing the Gap Between Rhetoric and Reality," studies what CEOs and other business executives say
they believe about the importance of corporate citizenship and what policies are actually in place
at their businesses.
The BCCCC describes corporate citizenship as the commitment of
companies to minimize risks, maximize benefits, and be accountable and responsive to stakeholders,
while supporting strong financial results.
Although 73% of the 751 top executives surveyed
said that corporate citizenship needs to be a priority for businesses, only 39% of the businesses
include corporate citizenship as part of their business planning. An even smaller percentage of
these businesses (28%) actually have written corporate citizenship policies or statements.
"We think the gap between aspirations and actions is to be expected at this time because
business is going through a significant transformation," said Vesela Veleva, Research Manager at
BCCC and lead researcher on the Report.
"Companies are still adjusting to globalization,
increased transparency, instant communications and a more sophisticated-and larger-network of
stakeholders. It's only natural that senior level executives would articulate their ambitions to be
responsive to these pressures before they are able to integrate the practices into strategies
across the business," Veleva continued.
US companies are behind European and Japanese
companies in creating corporate citizenship policies, the report concludes. This could have dire
consequences for US companies that have not taken action incorporating social and environmental
issues into their businesses.
"We did see some movement toward corporate responsibility
[in the 2007 Survey], especially in the area of increased support for low-income communities,
greater hiring of women-owned and minority-owned suppliers," Veleva told SocialFunds.com. "We also
found increasing recognition among US businesses of the importance of corporate citizenship for the
One of the most striking discrepancies between CEO rhetoric and
business actions is the way businesses actually treat employees. Four out of five top-level
executives answered that they "see the importance of valuing employees and treating them well."
Employees’ actual experience often fails to match executive rhetoric. Just over half (54%) of these
companies offer health insurance to employees, and less than a third offer training and career
development for low-wage employees.
The dialogue between companies, shareholders and the
public about the social role companies should play is not as open as companies might think.
Sixty-five percent of business leaders replied that the public has “a right to expect good
corporate citizenship" yet only 29% report that they to discuss corporate citizenship with
stakeholders and only 21% report to the public on these issues.
The BCCCC/Hitachi study
compares the expectations of executives and the public over the part companies should play in
helping solve social issues. For example, 79% of the public surveyed believes that companies should
be expected to manufacture their products in an environmentally and socially friendly way. Yet just
55% of executives agree.
Sixty-two percent of the public believes that corporations should
be held responsible for reducing human rights abuses. Only 32% of executives agree. Another
striking difference of opinion exists over the role companies should play in helping reduce the gap
between the rich and the poor. Only 21% of executives answered that large corporations should help,
while more than twice that percentage of the public holds this idea to be true (49%).
survey also found that the response to the changing social contract varied by the size of the
company. "Executives from medium-size companies seem most satisfied with the current social
contract--50% of them see the existing social contract either as sound or as in need of some minor
adjustments," reported Veleva. "Senior executives from small companies seem most dissatisfied with
the social contract--only 32% of them see it as sound or in need of minor adjustments, while 66%
believe it needs a major overhaul or serious changes to fix it."
The report was released
as part of a well-attended webinar in December 2007 and interest in the survey has been extremely
high, reported Veleva. For example, the Social Investment Research Analyst Network (SIRAN) is planning to present the data to its
members. SIRAN, a network of 150 North American social investment research analysts from 30
investment firms, research providers, and affiliated investor groups, is a working group of the
Social Investment Forum (SIF).
"In a lot of ways the media is already inundated with corporate citizenship talk - it's all the
'rhetoric' we're talking about in the report," Mark Popovitch, Senior Program Officer at The
Hitachi Foundation explained. "We've really offered the report as a resource for the media to use
to inform their coverage of corporate citizenship moving forward and provide perspective to the
rhetoric coming out of corporate America."
The blog www.corporatecitizen07.com complements the
survey. The BCCCC and The Hitachi Foundation are also presenting the information to business
schools and groups about how businesses can adopt corporate citizenship principles.
Center's partnership with The Hitachi Foundation is an important part of this project," added
Veleva. "This independent foundation is more than a funder and operates as a full partner as it
uses the research to advance its objectives of enhancing the well being of economically and
socially isolated people in US and its strong commitment to advancing corporate citizenship,
business ethics, corporate philanthropy, and government governance."