Companies today are being judged – and their reputations are being made – not only on their financial performance but also on their commitment to social responsibility. The days when contributions were made at the whim of senior executives are long gone in most organizations. Effective corporate philanthropy is now an extension of a company’s values and culture.
We have found that one of the most effective strategies for integrating philanthropy and community involvement at every level of the business is to build a partnership that extends from the Community Affairs organization to the Board of Directors of the corporation.
For most of its history, CA (formerly Computer Associates) was like many other companies when it came to philanthropy. Decisions on major corporate contributions were commonly made by a handful of Community Affairs staff and reviewed by the individuals to whom they reported. The process was largely disconnected from the rest of the company.
In 2005, we created our first corporate contributions policy, at a time when many of the company’s business and financial processes were being transformed to create greater transparency and accountability. Our goal was not only to bring more focus, consistency and strategic direction to our philanthropic initiatives but to engage CA’s leaders in a more effective way.
We knew we needed the support of senior management, including the chief executive officer and chief operating officer. Under our policy, they approve the community affairs budget for key philanthropic initiatives along with our Corporate Contributions Council. The Council is made up of representatives from community and public affairs, marketing, finance, human resources, risk and compliance, and the general counsel’s office.
Engaging the Board
But we also decided to build a partnership with one group that is not usually part of a company’s philanthropic process – the board of directors. We saw three reasons to partner with the board.
First, engaging the board helps insure greater compliance and transparency. Corporate contributions have come under more scrutiny in recent years. New SEC rules require that any contributions of more than $25,000 made to a non-profit organization where a corporate board member is a director must be reported in the company’s annual 10k. Contributions to those organizations may be very worthwhile, but board members need to know ahead of time that the information will appear in the 10k.
While almost all companies have complied with the SEC ruling by putting a process in place to report all board affiliations with charitable organizations, CA went even further. Under our policy, the Board approves our contribution guidelines annually and approves all corporate contributions of $50,000 or more. The VP of community and public affairs meets quarterly with the corporate governance committee of the board.
The result is an ongoing dialogue with the board about our philanthropic efforts rather than a one-way flow of information about affiliations. This approach has gone a long way toward avoiding conflicts of interest, protecting both management and the board. It has also deepened the board’s understanding and appreciation of CA’s social commitment.
Second, the Board has a broad view of the company’s major initiatives and its direction and strategy. At CA we have found that board members are in a unique position to advise us on how to integrate our initiatives with the company’s business goals and objectives.
Third, because many board members are personally involved with community and charitable organizations, they can be champions for our philanthropic programs. The members of CA’s board understand why philanthropic giving is important and have proven to be powerful allies of community affairs within the company. That can help provide continuity in programs as companies and management inevitably change.
CA is not alone in building a partnership with the board. Board involvement in corporate citizenship efforts is a growing trend in the field. TCC Group, a management consulting firm that works with numerous corporations (including CA) on their philanthropic and community involvement programs, has found that corporate citizenship – philanthropy and volunteerism as well as diversity, governance, social responsibility and environmental impact – has increasingly become a board-level issue.
More Fortune 500 companies are adding a corporate citizenship committee to their corporate board activities. Among companies that have established a corporate foundation, there is also a small but growing number who are asking some members of their corporate board to also serve as trustees of the foundation.
“We are seeing an increasing number of our clients being very proactive about engaging their corporate boards in their corporate citizenship efforts,” says Tom Knowlton, head of the corporate practice at TCC Group.
“We feel it is a key strategy for integrating community involvement/corporate citizenship programs with important business objectives. The community affairs function should not stand alone or outside the company’s major business activities but rather should straddle both corporate and community interests for their mutual benefit,” Knowlton says.
At CA, the past two years of partnering with the Board have made a big difference in our philanthropic initiatives. Our giving is more effective because it has broad company support. Decisions are easier to make because we have clear guidelines and focused objectives.
The process is transparent, from community affairs all the way to the board of directors. And we all benefit greatly – community affairs, senior management and the board as well – from the open discussion about corporate philanthropy and how it supports CA’s overall business model. It’s a fundamental part of who we are as a company and the values that define our character.
This article was written by Anne Marie Agnelli, vice president of community and public affairs at Computer Associates, and Janice Brown, a consultant with the TCC Group. It was excerpted from the PR News Crisis Management Guidebook, Volume 2. To order a copy, visit the www.prnewsonline.com/store.