Corporate Communication: New research shows value of Corporate Citizenship and CSR published July-August 2005 An organisation’s corporate values, and how it behaves as a corporate citizen, have a direct relationship with business performance and financial success, according to two recent studies. A study by US PR agency GolinHarris, ‘Doing Well by Doing Good’, shows that corporate citizenship translates to the bottom line. The study, undertaken in April 2005, showed that 40 percent of the 3500 respondents say that good corporate citizenship makes them more willing to do business with a company. The survey found that corporate citizenship can influence consumer opinion and behavior, and essentially turn consumers into brand champions. Respondents indicated that good corporate citizenship by a company would inspire them to (in ranking order): Be willing to try the company’s products for the first time Welcome the company into their community Recommend the company’s products and services to friends and family Improve overall trust for the company, its people and products Improve overall opinion of the company’s reputation “Our research shows that investing in corporate citizenship is a positive brand-building strategy, not merely a defensive brand-protection strategy," said GolinHarris President and CEO Fred Cook. "Progressive brands realize that corporate citizenship is more than a ‘nice to have’ -- it’s a ‘must have’ activity for their success." So what constitutes a good corporate citizen? Respondents identified 12 key drivers that determine a company’s performance as a good corporate citizen, with how a company treats its employees as the number one driver. Following is an overview of the 12 corporate citizenship drivers (percentage of respondents ranking this attribute "very high" or "high"): Values and treats its employees well and fairly (85%) Executives and business practices are ethical, honest, responsible and accountable (83%) Goes beyond what is required to provide safe and reliable products and services (75%) Responsibly markets and advertises its products and services (72%) Committed to social responsibility, economic opportunity, environmental protection, etc. (72%) Listens to community or customer input before making business decisions (68%) Is active and involved in the communities where it does business (68%) Committed to diversity (gender, race, etc) in the workplace and its business practices (65%) Company's products and services enhance peoples' lives (64%) Corporate values and business practices are consistent with my own beliefs (62%) Supports a cause or issue that has led to improvement and positive change (61%) Donates or invests its fare share of profits, goods or services to benefit others (59%) The impact of a company’s good corporate citizenship standing is not only dependant on its initiatives, but on its ability to communicate its commitments effectively. According to the survey, the top five most credible ways to learn about a company’s corporate citizenship are through: People and organizations that have been helped or are personally involved in the company’s corporate citizenship News coverage on television and radio News coverage in newspapers and magazines Partnering with non-profit organizations, educational institutions, government and other groups of trust, respect and admire Community events, fundraisers, sponsorships, symbols of solidarity e.g., ribbons, bracelets, bumper stickers, etc. The fact that corporate citizenship is a powerful influencer of consumer behavior is good news for American companies. Less encouraging is survey respondents’ perception of the performance of American business in corporate citizenship. Only 25 percent believe Corporate America is doing an 'excellent' or 'good' job in its commitment to corporate citizenship. Another survey, ‘Deriving Value From Corporate Values’, undertaken globally with 365 senior executives (C level representing nearly 50 percent) by The Aspen Institute and Booz Allen Hamilton, looked at corporate values. Undertaken in the second half of 2004 and released in February 2005, it revealed that overall there is a link between financial success and a focus on corporate values. Nearly half of the respondents (47 percent) were based in North America with 27 percent representing companies based in Europe, and 24 per cent representing companies based in Asia/Pacific. The study showed that companies which routinely identify values as a top agenda issue and public companies that report superior financial results also report greater success in linking values to operations in areas that foster growth such as initiative and innovativeness. Among those surveyed, financial leaders - public companies that outperform their industry averages - believe social and environmental responsibility have a positive financial impact. Nearly half (49 percent) said that both environmental and social responsibility have a positive impact on financial performance in the short run, compared with 34 percent for the other public companies. “Clearly, many companies are successful in turning their corporate values into a competitive asset,” said Judith Samuelson, executive director of the Aspen Institute Business & Society Program. “ As a result, they are better positioned to take advantage of the relationship between values and performance”. Other interesting results to emerge from the survey were: Ethics are addressed in the values statements of more North American companies (95%) than firms in Europe (84%) and Asia (85%). Environmental responsibility features more prominently in corporate values statements in Europe (55%) and Asia (56%), than in North America (34%). 85% of the respondents say their companies rely on explicit CEO support to reinforce values, and 77% say it is one of the ‘most effective’ practices for reinforcing the company's ability to act on its values. Nearly two-thirds of respondents agree that a corporation's values can strongly affect customer loyalty. However, despite corporate value being in vogue and mistrust in corporations at historically high levels, most corporate executives who participated in the survey do not see a direct link to growth, and the joint study also revealed that most companies are not effectively measuring their "Return on Values" in areas important to their business strategy. See here for a full summary of ‘Deriving Value from Corporate Values’. Note: An annual study is conducted by Sweeney Research with Grey Worldwide that reports on Australian consumers' attitudes to corporate Australia, including its brands, marketing and advertising. The 2005 Eye on Australia survey provides insight into the minds of consumers, including what they want from marketers and advertisers and what they expect from a great brand. The report can be purchased from Grey Worldwide. For further PR Influences articles on this topic see below: Corporate Social Responsibility - an important tool for most businesses Corporate Reputation and The CEO Corporate reputation - what is it and how will my organisation benefit?

PR Influences Australian Public Relations Newsletter. Article: PR Research: Value of Corporate Citizenship and CSR. Information Content: Corporate Communications