Corporate social responsibility (CSR) is the concept of businesses having policies and completing actions that advance the promotion of some social good beyond the interests of turning a profit.
More businesses today want to show that they’re valuable members of the community.
Examples of CSR in action include the Bill and Melinda Gates Foundation, which targets investment in technologies that help developing nations. Ninety-three percent of business leaders agree that businesses should have a positive impact on society, yet 78% think they are failing to deliver on their CSR promises.
As the general public places less trust in government solutions, they are placing more trust in CEOs, with 64% of people saying that CEOs should take the lead on positive societal change. Fifty-six percent of people don’t respect CEOs who remain silent on pressing social issues like sustainability and world poverty, and 83% of Millennials (who will make up 75% of the workforce by 2025) say they would be more loyal to an employer that contributes to addressing social and environmental issues.
Societal Expectations of Top Executives Have Changed
No longer do the general public expect top executives to worry about profits while neglecting to address key social and environmental issues. People expect companies to understand issues like sustainability, and to create goals for addressing social ills that align with their business objectives.
While many companies have created CSR teams, these teams can only fulfill expectations when they have the buy-in and support of top executives. Often this means making extensive audits of business practices and sometimes altering them. For example, creating a supply chain that is more in tune with sustainability goals may mean examining vendor contracts and switching to more socially conscious vendors. In other words, the world expects action, not just empty rhetoric.
Benefits of Corporate Social Responsibility
The good news is that CSR benefits both the corporate bottom line and corporate reputation. Leveraging social impact as a sales differentiator works. A study by the Boston Consulting Group found that doing so was an impressive 13 times more valuable than traditional incentives like free shipping.
But simply voicing concern over causes isn’t sufficient. Consumers don’t place a lot of faith in, say, advertisements that express concern for a cause. They expect brands to actively partner with organizations that are committed to solving problems and that align their social actions with their business goals.
Disaster recovery is one way that businesses demonstrate their commitment to helping.
Characteristics of the Socially Responsible Leader
Socially responsible leaders demonstrate largely the same characteristics that I define in my new book The Intelligent Leader. Such leaders are fair and compassionate. They are authentic and willing to be vulnerable and learn new and better ways of doing things. They’re honest and their decisions are value-driven. They understand the value of building strong teams and they lead by example, tolerating no violations of ethical standards.
Most importantly, however, leaders of companies with strong commitments to CSR are willing to put in the hard work and make the sometimes-difficult changes required to transform their organizations into better citizens and better stewards of resources.
How does leadership coaching figure into CSR? Leadership development doesn’t always give sufficient attention to organizations’ roles in their communities. When leadership development programs only focus on the development of leaders who will maximize profits, they miss key opportunities to help their organizations become better members of the community.
Leadership coaching can help fill in these gaps by helping the socially responsible leader put actions behind their words. Leadership coaching can also help with better communications so that the importance of social responsibility can be made more widely known. It also helps leaders work with peers, superiors, and direct reports to help empower others to work on socially responsible goals.
Much is demanded of today’s executive leadership. Not only are they expected to run profitable businesses that fulfill the needs of their customers and clients, but they’re also expected to define their organization’s place in society – a place that includes being a good citizen and a good steward.
Leadership coaching is about getting better business results, but it’s crucial that we expand our definition of “good business results” to include the increasing roles that businesses play in solving problems in the community and the world.