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Enhancing the Journey to Excellence: Corporate and Social Responsibility

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Charlie Coffey
Executive Vice President
Government & Community Affairs
RBC Financial Group
"2002: An Excellence Odyssey" Summit
Metropolitan Toronto Convention Centre
Toronto, Ontario

Tuesday, October 22, 2002

Thank you Greta…

When Don Tapscott, one of Canada's leading consultants, entrepreneurs, authors and speakers on business strategy said, "if the corporation is naked, it better be buff", my antennae picked up. Don connects corporate social responsibility (CSR) to philanthropy, ethics and a competitive advantage. Corporations, "knowing they are naked whether or not they want to be, will encourage scrutiny and trumpet their transparent/responsible conduct. Strong values will drive ethical and responsible behaviour by staff. This will enhance their reputation, help build trusting relationships with staff, partners, shareholders, the public…and form the foundation of their competitive advantage." Don's right on the mark, as he pointed out the obvious: CSR is about our relationships with all of our stakeholders - our ability and commitment to act and respond in communities where we live/work.

The current CSR benchmarking program of the Conference Board of Canada and Imagine is an indicator of how seriously the matter is being treated by the corporate sector. "Emerging Practices in CSR Management", the Conference Board's recent survey of 40 senior executives in large Canadian corporations, indicates that CSR is perceived as being more than simply a community investment function. Half the respondents define it as the overall relationship of a corporation with all its key stakeholders and another 30 per cent are moving to adopt this approach."

RBC didn't wait for surveys, measurement programs, governance/accountability/ethics headlines or conferences to take a stand on corporate social responsibility. We've been working on CSR for years. It's not a matter of whether a company can be both profitable and socially responsible, because in the long term, you can't have one without the other.

Gord Nixon, our President/CEO, sums it up so well, "We believe that our success as a company is intrinsically connected to the economic and social well-being of our community and our country. To us, behaving in a socially responsible manner is not just something we want to do. It's something we know we must do as an essential part of our relationships with our customers/stakeholders and as a strategic investment in the future prosperity of a civic society…we believe that by contributing our funds, our network, our leadership and, most importantly, by encouraging and celebrating the involvement of our people, we can make a difference in helping to build a strong, healthy society."

In 2001, RBC Financial Group contributed $27.2 million to Canadian charities, almost half to education and health…and over $17 million in sponsorships for amateur athletics, the arts and community events. That's a lot of support. How much is enough? At RBC, we aim at about 1 per cent of pre-tax dollars. Not only do these dollars represent valuable social investments, these dollars also give us an opportunity to stay in touch with the overall needs of our communities and the individuals we serve. Whether in education, healthcare, social services, arts and culture, civic causes, including early childhood development and the battle against homelessness/poverty, we're a better organization and employer when we help to better the society in which we operate.

However, this is only the beginning of our story. We also believe the measure of a company's commitment to society includes a broader look at the bigger picture: a company's products and services, employee relations, the care it shows for the environment and human rights, the way it does business, the jobs it creates both directly and indirectly...its leadership and innovation in setting the pace in key areas of social interest. Corporate social responsibility embraces a wide array of elements that go beyond making philanthropic donations. Here's an example of what I mean.

RBC strongly supports a variety of initiatives that focus on youth and education…last Thursday we announced $2 million in additional funding for 54 after-school programs in 32 communities for 2002/2003. These programs offer kids an assortment of activities that go beyond the three Rs - activities such as cooking and art classes, organized sports, computer tutoring - activities that address a full-range of child developmental needs. We believe this investment not only helps children, it also strengthens our families, enriches our communities and builds the human capital we need to ensure the future health and prosperity of our country.

In 1993, we launched RBC's Aboriginal Stay in School Program…it gives aboriginal high school students across the country a chance to learn what it's like to work in the financial services industry, see the relationship between education and employability and earn some money at the same time. The RBC Foundation also supports scholarships at universities and colleges - over the last 10 years, RBC has provided more than $1.5 million in total scholarship funding. And when it comes to helping young people, our employees are generous with their time. In 2001, staff volunteered more than 15,200 hours in 380 different youth groups from coast to coast, including Big Brothers and Sisters, Boys and Girls Clubs, Girl Guides of Canada and Scouts Canada, to name a few...

This is what I mean by the bigger picture. And this is exactly how we're growing philanthropy into corporate social responsibility. Philanthropy is easy to measure. Citizenship? It might be impossible. We simply can't measure and report on everything we do for our stakeholders. The amount we donate to charities is easy to report, but it doesn't give the whole story…nor should it!

At RBC, we all know (in our guts), that corporate social responsibility is important. Since we believe that everyone has a role to play...everyone does. And we don't leave anything to chance. We also believe that, "what gets measured, gets managed." We've integrated image and reputation measurements onto our corporate scorecard, along with financial and customer loyalty/satisfaction results. Our employees know what's expected of them in helping improve our image and reputation. And they're measured and evaluated on their performance in this area.

Speaking of our employees, being socially responsible starts right in our own backyard, where supporting our own people makes the difference in promoting and sustaining a healthy workplace and healthy communities. We're strongly committed to investing in our people…not only by offering competitive compensation and benefits - but by investing in learning and education - by fostering a work environment that values communication - and by supporting diversity as well as work/life initiatives. We're also committed to staying on the cutting edge of trends in the workplace. Partnering with leading Canadian survey/research companies and academia has a two-fold result. RBC has access to the information we need to remain leaders in people management and we also contribute to the body of workplace knowledge - assisting other companies and organizations in developing the Canadian healthy workplace/workforce - today and in the future.

Our prescription for a healthy workplace is a work-in-progress, however we're proud of our accomplishments. That's why our average annual employee learning investment over the past 5 years is $110 million per year. That's why we've developed first class human resource programs to help our people balance work, family and life. Incidentally, RBC Royal Bank has more employees enjoying job-shares and flexible work arrangements than any other corporation in Canada; we believe this helps create a more creative, satisfied and productive workforce - better for our company, our customers, our families, our cities and our communities.

With corporate social responsibility tied to corporate financial performance, a less than banner business year could have dramatic repercussions. Would it be acceptable if a neighbourhood centre for children, youth and young adults in Winnipeg had to turn away troubled teenagers because one of its major contributors had a less than banner year? Not to me.

Would it be acceptable if an association for the blind in Halifax had to cut services or staff because its major sponsor had a less than banner year? Not to me.

Would it be acceptable if a health network in Toronto had to reduce its commitment to cancer research because RBC had a less than banner year? Not to me, not to us.

I cannot repeat often enough that corporate social responsibility is integral to the primary function of any good business in this country. Like profit, it's not a frill. It should be part of every company's vision and values. Giving to good causes doesn't make us good guys. It simply means we're doing what we should be doing.

You can find out much more about what we're doing in RBC Financial Group's annual Community Report - the Report that charts our Journey to Excellence. I have a few copies of our 2001 edition that you can pick up as you leave this session. RBC's Journey to Excellence summary piece (located in your delegate registration kit) indicates how to obtain additional copies/information.

In closing, RBC Financial Group strives for a socially responsible mindset, integrated across all our businesses and functional units. And we see this imperative becoming more, not less, critical in the increasingly competitive, global economy in which we operate. Is RBC proud to be named Canada's top corporation in the category of corporate social responsibility (the Globe and Mail's annual Canada's Most Respected Corporations poll), six year in a row? Sure we are…however, this means we have even more work to do. We take our role as a leader seriously, especially when it comes to raising the level of integrity, dialogue and action, as we are today. I look forward to hearing your comments and questions this morning.

Thank you.


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