Throughout all the kibitzing about the need for corporate social responsibility one conclusion is that such programs may in fact be more trouble than they're worth. A new
report bears that out, showing that companies are frustrated in their CSR efforts and haven't taken the time to figure out whom they are responsible to and what they are
responsible for. The report, "Corporate Social Responsibility at the Crossroads," was conducted by Cranfield School of Management and sponsored by Edelman. A few key points:
- Companies know who their primary CSR stakeholder is e.g. employees, shareholders, regulators and activists. Surprisingly, though, they haven't prioritized the rest of
their stakeholders, leading to a poorly focused "first among equals" approach. - The failure to think carefully about and prioritize stakeholders makes it difficult for companies to decide what information is material when they communicate to stakeholders.
This is particularly evident in social-environment reports, which are becoming better longer, but not better. - CSR needs to be measured by business outcomes; it's currently practiced more as a "protective" or "reactive" function.
Despite the pitfalls, shirking CSR is not an option. "As long consumers, regulators and activists continue to demand more responsible business practices, it will be very
difficult for companies to back away significantly from CSR," says Steven Voien, executive VP- director of U.S. operations for, First&42nd, Edelman's CSR practice. "There's
been a fundamental shift in the marketplace, and no company can turn back the clock."