Boards are taking the lead in guiding companies through the ever-expanding world of corporate social responsibility. They are expected to consider the impact of the Corporation’s business operations and initiatives from a social responsibility vantage point. The board must take into account the interests of customers, shareholders, employees and regulators.
The best way to enshrine corporate responsibility best practices is to thoughtfully and purposely fill new board positions with members who bring diversity of thought, gender and ethnic diversity. Women and ethnic minorities who are traditionally underrepresented on corporate boards bring new perspectives, fresh ideas and additional accountability to boards. Boards set the standards for accountability and create a roadmap for the CEO and the management team to follow.
Today’s consumers simply expect more from the corporations they do business with. Socially responsible companies are intentional about how they address big issues like economic justice and protecting the environment. Millennial consumers – especially – care very much about the values and the mission of the companies they do business with. Millennials have recently become the largest consumer buying power group, so their opinions matter and their decisions impact the bottom line of many companies.
For example, many analysts tie McDonald’s downturn with Millennial customers directly to lack of social responsibility. Millennial consumers are passionate about the fight for fair wages, concerned about sustainability of the company’s food supply chain and wasteful packaging. With plenty of other competitors to choose from – Millennials are abandoning McDonalds for brands that demonstrably care more for their employees and the environment.
McDonalds has responded to the crisis by going through a succession of CEOs in short order – but corporate social responsibility does not start nor stop at the C-suite. It’s important to set corporate responsibility standards and expectations for the board of directors and to recruit diverse perspectives to sit on the board. Recruiting directors that are socially aware and can help insulate your company from PR disasters and make it more attractive to future employees.
When a company methodically builds a reputation for benevolent behavior, it can attract talent that it would otherwise not have access to. If the company has a bad reputation for treating certain groups callously or having a track record of environmental degradation, it creates a lasting negative reputation that top talent steers away from.
The collective knowledge contained on the board of directors can outlast the tenure of most CEOs and help steer the company toward sustainability and social responsibility. This effort is a conscious decision to be more purposeful, transparent and accountable.
“Walking the walk” and following through on corporate responsibility standards will earn the admiration of a new generation of talent that cares much more about doing the right thing than a temporary boost in stock price or record quarterly returns.