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February 01, 2002
CEOs Worldwide Prioritize Corporate Social Responsibility
    by William Baue

A survey of CEOs around the globe revealed their appreciation of corporate social responsibility, though they have yet to reach consensus on CSR's definition.

How do chief executive officers around the globe define and value corporate social responsibility? PricewaterhouseCoopers' fifth annual Global CEO Survey, Uncertain Times, Abundant Opportunities, posed this question, among others, to almost 1,200 CEOs from 33 countries. Fittingly, the global survey focused on issues of globalisation and anti-globalisation, or "alternative globalisation." PwC CEO Samuel DiPiazza, Jr., unveiled the study yesterday at the World Economic Forum annual meeting in New York.

"Globalisation creates risk as well as opportunity, and business leaders have considerable responsibility to help make it a constructive, rather than destructive, force," said Mr. DiPiazza. "[CEOs] voice a strong commitment to corporate social responsibility and say that responsible behaviour toward employees, shareholders, and communities is not a luxury for good economic times but a core concern at all times."

PwC began interviewing CEOs by telephone soon after September 11, and completed the process early last month. Questions clustered around several pivotal issues: the global impact of September 11; the global economy; corporate social responsibility; assessing corporate value; and internet commerce. The survey focused its attention on corporate social responsibility more than any other issue.

"[M]any CEOs seem to view their companies' social reputations as a work in progress. While 47 percent are resolutely proud of their companies [for having a positive social reputation], another 41 percent offer a qualified view-'to some extent'," the survey stated.

The survey reported highest confidence in CSR reputation amongst North American CEOs, with 64 percent feeling strongly that the public perceives their company as a positive social performer and 30 percent feeling somewhat guarded confidence. Asia-Pacific CEOs have the lowest confidence in public perception of their companies as positive social performers, with only 28 percent feeling strongly confident and 54 percent feeling more cautiously confident.

The appended interview with United Nations Under-Secretary-General for Economic and Social Affairs Nitin Desai counterbalanced CEO perceptions.

"CEOs are bound to have a somewhat more rosy perception of their own companies than the world outside does. You have to discount this. Their notions of what constitutes social responsibility must also vary," Under-Secretary-General Desai said.

Indeed, CEO definitions of CSR differ across regions. As a group, CEOs prioritize workplace safety and responsiveness to all stakeholders, regardless of legal requirements, as the key defining components of social reputation, with over 80 percent support. However, North American CEOs' prioritize supporting community projects over workplace safety in their definition of CSR, while Central/South American and European CEOs prioritize workplace safety highest.

Perhaps the most telling findings concern the importance CEOs accord CSR. Most CEOs agree that CSR does not amount to public relations "spin" (51 percent), that CSR is vital to profitability (68 percent), and that CSR must remain a priority, even amidst the current economic downturn (60 percent). Interestingly, a relatively large percentage of CEOs responded to all three of the above propositions with uncertainty, "unsure" of where they stand.

"Would this indicate that their view of corporate social responsibility is still taking shape?" the report wondered aloud.

Under-Secretary-General Desai's commentary confirmed the survey's suggestion that the definition of CSR is a work in progress. First, he defined sustainable development, an issue closely related to corporate social responsibility, as a "process" instead of an "end state." Later, he called for consensus on the definition and realization of corporate social responsibility, though he admitted that this will take time.

Under-Secretary-General Desai noted the evolution of corporate social and environmental consciousness over the past decade, with corporate supporters of these initiatives growing from a small minority (sometimes perceived as "eccentric") to a larger, more legitimate minority. Marketplace competition, as well as burgeoning environmental and social consciousness in society at large, may create the critical mass necessary to push this minority into a majority.

"What a large minority now accepts as a structure for corporate responsibility and accountability may soon be accepted as a global norm not through legislation but simply through peer pressure," he opined. "A large corporation is simply a microcosm of society. If environmental awareness is growing in society, if a sense of social responsibility is growing in society, these things will be reflected in the workforce," Under-Secretary-General Desai concluded.


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