The Business Roundtable issued a statement Aug. 19 [please see statement at the bottom of this post]. It declared that corporations share a fundamental commitment to all stakeholders, not just shareholders. The statement represents a refreshing recalibration of what it means for organizations to demonstrate corporate social responsibility.
In addition, it is a bold and welcome move, and the Business Roundtable should be applauded for it. It also has important considerations regarding PR and communicators’ roles in bringing that realignment to fruition.
Beyond Stockholders
Since 1978, the association of almost 200 CEOs from leading U.S. companies has periodically issued Principles of Corporate Governance. Each one since 1997 supports the idea that corporations exist primarily to engage with stockholders “on issues and concerns…that affect the company’s long-term value creation.”
The new proclamation commits companies to deliver value not just to shareholders but equally to customers, employees, suppliers and communities. It is a long overdue clarion call grounded in the concept of doing well by doing good.
Similarly, it reflects what we as PR pros and communicators stand for and counsel everyday: the importance of increased social responsibility, trust, practicing what you preach and fostering “diversity and inclusion, dignity and respect.”
But how will the CEOs who signed the statement actually do it?
Act and Communicate
It will be critically important for these corporations to demonstrate progress. They must show through action that they are following through on their promises.
As communicators and PR pros, it will be our job to help make sure they do. In addition, it is our job to ensure narratives are created and disseminated. They will illustrate that the promises in this statement are kept.
Today’s media landscape is evolving rapidly. For example, it is more social media- saturated than ever. Sometimes the next crisis or triumph is only as far as a tweet away. In this volatile environment, ethical guidelines, including PRSA’s Code of Ethics, set the standard for the professional practice of PR. The communicators’ insight and relationships across the stakeholder ecosystem work can ensure the integrity of positioning that organizations promote.
We are on the front lines of these organizations’ brand and reputation. As such, we are well-positioned to, and must, speak frequently, directly and honestly with the C-suite throughout the development of strategy and the implementation of policy.
Consumer Demand
As the Business Roundtable’s statement notes, there is increasing demand from consumers for leaders to demonstrate their credibility and willingness to engage in shifting social and cultural trends and movements.
A Feb. 2018 study from APCO Worldwide and the latest Edelman Trust Barometer come to similar conclusions about consumers’ interest in seeing CEOs and companies take stands on social issues and lead the way on them.
As we know, PR and communications professionals play an integral part in crafting and conveying those messages. As such, they build mutually beneficial relationships with all publics.
The downside, of course, is when companies are inconsistent with the values they have espoused. This risks alienating consumers and damaging the company’s reputation.
The CEO and Communication
For corporations to change, an integral element of the equation must be the CEO’s willingness and commitment to communicate and to value the PR and communications team. Without this, deep changes are not possible, whatever an organization’s stated goals might be.
The Business Roundtable’s statement is an encouraging and welcome addition to the discourse on the importance of serving, and communicating to, a wide and diverse audience of stakeholders.
The declaration of principles, however, must translate into verifiable, measurable activities in order for real progress to occur. The words will spark action only if PR and communications professionals are increasingly, and continually, recognized as essential to realizing a CEO’s vision for the future.
Statement on the Purpose of a Corporation
Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.
While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:
- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
August 19, 2019
Debra Peterson is chair of PRSA and president of Comm365.
NOTE: A version of this content appeared originally in PRNEWS, Sept. 3, 2019. For subscription information, please visit: https://www.prnewsonline.com/subscribe-now/
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