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The Link Between CSR and Reputation Worldwide views on the local impact of corporate responsibility
Philip Mirvis, Center for Corporate CitizenshipFor UNGC Lead Webinar, May, 2009
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Reputation and CSR
Reputation is an “intangible” asset:
•Accounts for ±10% of market value of corporations
CSR is a major influencer of Reputation:
•40% of reputation is driven by Citizenship, Governance, and Workplace perceptions
Positive CSR perception leads to recommendation:
•65% of the General Public will “Definitely Recommend” the top 20 CSR US companies vs only 26% recommendation for bottom 20 CSR companies
Key Reputational Benefits
•Recruit and Retain Employees, Sales, Market Entry, License to Operate
•“Bad Behavior” = Reputation Killer
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Paradox for Business in a Downturn…..
Around the world...
10-20%
60-70%
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Reputation is based on feelings
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Reputation is driven by 7 dimensions
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Adjusted R-squared = 0.774n = 27,000
Note: Based on random sample of 1,000 rating per country
17.6%
13.6%
14.6%
14.5%
16.3%
11.8%
11.6%
Citizenship, Governance and WorkplaceAccount for Over 40% of Reputation Globally
CSR Index
Weight = 45.4%
Source: 2008 Global Pulse, Reputation InstituteCopyright © Reputation Institute. All rights reserved.
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The Corporate Social Responsibility Index- 3 Dimensions
Citizenship (Community and the Environment)
1. Expectation that Business will contribute to community
2. Environment #1 Issue for Public/Business globally
Governance (Ethics and Transparency)
1. License to Operate, Wall Street Crisis
2. Key Reputational Driver today
Workplace (Good place to work and Treats Employees well)
1. USA: #1 Criteria for Corporate Citizen
2. High Priority: Millennial Generation, EU and D&E markets
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Company Weights in Select Countries
Where will CSR give you the highest ROR (Return on Reputation)?
________France
________USA
________China
________Brazil
________ South Korea
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Company Weights in Select Countries
Where will CSR give you the highest ROR:
1 France
2 South Korea
3 Brazil
4 USA
5 China
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Importance of Citizenship, Governance and Workplace Varies by Country
Source: 2008 Global Pulse, Reputation Institute Copyright © Reputation Institute. All rights reserved.
Note: Weights are derived from the Driver Analysis. Each weight represents unique contribution ofgiven dimension to explaining companies’ reputation. The CSR Index weight is a sum of weights for citizenship, governanceand workplace dimension weights.
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Source: 2008 Global Pulse, Reputation InstituteCopyright © Reputation Institute. All rights reserved.
2008 Country Ratings of CSR Index
Note: Ratings are a mean of company scores collected in each country. All scores are globally adjusted. The CSR Index isa mean of the citizenship, governance and workplace dimension scores per country.
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Source: 2008 Global Pulse, Reputation InstituteCopyright © Reputation Institute. All rights reserved.
Performance vs. Importance- By Country
IMPORTANCE
PERFO
RM
AN
CE
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The Corporate Social Responsibility Index
45.4% of reputation
CSR has a major impact on business performance
The question is:
How do you leverage this?
Social Responsibility Index QuestionsQ: Workplace: 'Company' is an appealing place to work -- it treats its employees wellQ: Citizenship: 'Company' is a good corporate citizen -- it supports good causes & does not harm the environmentQ: Governance: 'Company' is a responsibly-run company -- it behaves ethically and is open & transparent in its business dealings
Corporate SocialResponsibility
Index
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How are Corporate Reputations Created?
ProductsCustomer Service
InvestmentsEmployment
StakeholderExperiences
BrandingPublic Relations
MarketingSocialResponsibility
CorporateMessaging Perceptions
Trust Admiration
Respect Good Feeling
Corporate ReputationCorporate Reputation
Print Broadcast Internet
MediaConversation
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Identify gaps between what you are doing, communicating and what creates stakeholder
support
Engage stakeholders on what’s relevant to them;Understand what they want from you and the
industry
Identify how your company vision and
values can play together with what
the stakeholders wantTake strategic actions to
‘close the gap’
Identify your key stakeholders
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2
3
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1Measure how your activities are increasing
support7
Communicate with stakeholders and the
public
Analyze & Improve
Using CSR to Drive Improvements in Reputation