The Business Case for Corporate Responsibility: Building Prosperity Together
Printer-friendly format
Charlie Coffey
Executive Vice President
Government & Community Affairs
RBC Financial Group
Good Corporate Citizenship: Myth or Reality? Forum
University of Ottawa
Ottawa, Ontario
Thursday, October 30, 2003
Penny, special thanks for the warm introduction…and
the invitation to share some perspectives about good corporate
citizenship in the company of Denis, Ursula, Nathalie and
everyone who has joined us here today.
Next week, hundreds will be gathered in Amsterdam for the
fifth annual Triple Bottom Line Investing Conference (TBLI)
- the largest international sustainable investment, learning
forum. The program includes recent developments on screening,
auditing, reporting, socially responsible investments (SRI),
corporate citizenship, indexes and research. As some of you
may know, TBLI is a concept revolving around the economic
profit of a corporation, as well as its social and environmental
accountability. You'll see this theme plays well in our discussion
this afternoon.
Let's begin by focusing on what is corporate citizenship?
One definition that gets to the heart of the matter goes like
this: "understanding and managing a company's wider influences
on society for the benefit of the company and society as a
whole" (Perspectives on Corporate Citizenship
- Jorg Andriof and Malcolm McIntosh, 2001).
Many people use the terms corporate citizenship and corporate
social responsibility interchangeably. RBC usually refers
to corporate responsibility (without the word "social"),
as this strategically important issue is much more than the
word "social" implies. It's also much more than
what the word philanthropy implies.
Corporate responsibility and good corporate citizenship is
about the marketplace: are we conducting business
responsibly; it's about community: are we assuming
a leadership position with investments and issues pertinent
to our business and customers; it's about the workplace;
are we treating employees well and encouraging/supporting
their participation; and it's about the environment:
are we taking care of our surroundings - the air we breathe
- the energy we use? It's all about TBLI accountability and
building prosperity together.
Is there a solid business case for corporate responsibility?
We believe so. However, it's important to note that corporate
responsibility is only on a corporation's agenda, if the company's
vision, mission, objectives, and goals -- developed collaboratively
by its major stakeholders, put it there. For example, corporate
responsibility is on RBC Financial Group's agenda. It's reflected
in our vision - "Always Earning the Right to be our Clients'
First Choice." We put it there.
What are the key drivers of corporate responsibility? Anthony
Lupi, co-founder of Positive Outcomes in Australia, addresses
this question (March 23, 2003 - University of Sydney):
- "Internal pressures: Capacity to attract
and retain staff; being an 'employer of choice'; staff morale/pride;
managing diversity - getting best value from your staff;
- Business pressures: Improved stakeholder relations;
community acceptance; brand image/company reputation; enlightened
self-interest; attracting socially responsible investment
funds (SRI); competitive advantage of good environmental
practices;
- External pressures: Increased demand for higher
standards of ethics, governance and accountability; globalization
- increased demands for transparency ('living in a CNN world');
increased importance of public/private partnerships; increased
stakeholder expectations - consumers/customers/interest
groups - the rapidly growing strength and assertiveness
of NGOs; and seeking to avoid (government) regulation."
These internal, business and external pressures are supported
by research, which shows that:
- Corporate image and reputation is the number one driver
of customer loyalty;
- There's a clear link between the company's reputation
as a good corporate citizen and consumers' willingness to
do business with the company; and
- Corporate image is also a key driver of employee engagement.
In addition, the 1999 Millennium Poll (involving 25,000 citizens
in 23 countries) suggests that 2 out of 3 citizens wanted
companies to contribute to broader societal goals. This poll
also asserts that, "people around the world focus on
corporate citizenship ahead of either brand reputation or
financial factors when forming impressions of companies."
Corporate responsibility makes a difference to brand success,
employer of choice leadership, investor preference and a competitive
advantage. It also makes a fundamental contribution to the
health, well-being and prosperity of our country and communities.
There are no limits to health, well-being and prosperity…only
unlimited possibilities. Talk about healthy returns…
Who disagrees with the business case? Milton Friedman says,
"Few trends could so thoroughly undermine the very foundations
of our free society as the acceptance by corporate officials
of a social responsibility other than to make as much money
for their stockholders as possible." Friedman maintains
that, "The business of business is business." David
Henderson (author of Misguided Virtue) believes that corporate
responsibility is "woolly at best and damaging at worst
- that it will bring higher costs with questionable social
benefits and that business leaders are too willing to appease
NGOs. He opposes government intervention and "global
corporate citizenship."
There will always be varying views on this subject, especially
since shareholder value is involved. However, when one sifts
through the research and observes the positive trends, it's
clear that corporate citizenship is hardly a myth and very
much good for enhancing shareholder value. Like anything else
of strategic importance, leadership and ownership starts at
the top. Gord Nixon, our President and CEO, says that corporate
responsibility is "an essential part of relationships
with our customers/stakeholders and a strategic investment
in the future prosperity of a civic society."
RBC will continue to maintain a leadership role in corporate
responsibility, track appropriate internal/external parameters
and participate in credible third party surveys - benchmarks
for success. We believe "what gets measured, gets managed."
For 7 consecutive years, RBC has been named one of Canada's
top corporations for social responsibility (The Globe and
Mail). This reflects the sum of our actions and view of good
corporate citizenship.
We believe our investment in corporate responsibility, helps
children, strengthens families, enriches our communities and
builds the human capital we need to ensure the future health
and prosperity of our country - the human capital right here
in this room. You can find out much more about RBC's priorities
and best practices in our Corporate Responsibility Report.
There are copies available before you leave this session.
In closing, it's not a matter of whether a company can be
both profitable and responsible, because in the long term,
you can't have one without the other. The bottom line is that
corporate responsibility is about relationships with all stakeholders
- our ability and commitment to act and respond in the cities/towns
where we live and work.
RBC Financial Group takes its role as a corporate responsibility
leader seriously, particularly in terms of raising the levels
of integrity, dialogue and action, as we're doing today. We've
been committed to corporate responsibility for years. When
you consider the difference between "involvement"
and "commitment", just think about an eggs-and-ham
breakfast: the chicken was "involved" and the pig
was "committed" (Anonymous).
I look forward to hearing your comments and questions. Thank
you.
2002-2003
Corporate Responsibility Report
Public Accountability Statement
|
