Step 1: Confirm CEO/board commitment to give priority to responsible business conduct

Corporate responsibility (CR) is gaining an increasing significance for businesses worldwide.

The ICC 9 steps are intended to cover the main elements that companies should consider when forming their own approach to corporate responsibility.

The commentary provides additional explanation and practical business examples.

Step 1: Confirm CEO/board commitment to give priority to responsible business conduct

A basic requirement is the commitment of senior management to treat responsible business conduct as a corporate priority. Rather than reacting to outside pressures, a company’s voluntary adoption of its own business principles should be motivated by its desire to express the values that guide its approach to doing business.

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Commitment of senior management

Senior management commitment is key to a company’s successful approach to corporate responsibility. While it is essential that senior management assign clear responsibilities, resources and authority to company managers for addressing corporate responsibility issues on an ongoing basis, leadership in these matters rests with the chief executive, the chairman and board directors.

A task force of chief executives under the aegis of the World Economic Forum in partnership with the International Business Leaders Forum, has developed a statement entitled “Global corporate citizenship: the leadership challenge for CEOs and Boards”. This statement recommends a “Framework for Action” that chief executives, chairmen, board directors and executive management teams can use as a template. The framework identifies some key leadership actions that can be adapted by most business leaders to their own circumstances. This template for leadership is intended to be relevant for all companies, industry sectors and countries.

According to this framework , experience has shown that for corporate citizenship to flourish, CEO and board leadership in particular is essential. CEOs and board members can provide leadership by setting the strategic direction for corporate citizenship in their company and engaging in the wider debate on globalization and the role of business in development. This can be divided into the following concrete actions:

1. Articulate purpose, principles and values internally and externally

Business leaders can play a crucial role in serving as role models and champions by communicating and behaving in a manner that is consistent with the company’s stated values and principles. Platforms for doing this include:

  • Annual general meetings and other briefings with investors
  • Annual report, environmental/social reports and other corporate publications
  • Regular meetings and communications with employees
  • Interaction with trade, industry and business associations
  • Other focused stakeholder dialogues and communications
  • Non-executive roles on other company boards
  • Speeches, conference platforms and media interviews

2. Promote the “business case” internally

Business leaders are uniquely placed in emphasizing to their employees in a persuasive manner the costs of “getting it wrong” in terms of economic, social and environmental performance and the business and societal benefits of “getting it right”.

3. Engage the financial sector

Business leaders can engage proactively with their major institutional investors, bankers and insurers on issues related to their companies’ social and environmental risks, innovations and business opportunities.

4. Enter the debate on globalization and the role of business in development

There is a growing need to ensure that the public debate on these subjects is open and rational, backed as much as possible by solid evidence, practical examples and experience of the business contribution to development. Business leaders can join dialogues aimed at defining the different roles and responsibilities of governments, business and other actors in helping to spread the benefits of globalization to more people and countries.

A key rule to observe is the absolute necessity to ensure that the messages and positioning of the CEO and/or board members match the activities and behaviour of the company in all its business operations.

Companies that have chosen to publish their business principles usually feature these on their websites, many of which include a section entitled “Business principles” or “Corporate responsibility”. The principles are often preceded by a message from the chief executive explaining the background and intent of the principles. Other useful sources of CEO communications on corporate responsibility are company reports on their economic, environmental and social performance. These generally include an introduction by the CEO or another senior company executive, which gives the overall approach of the company. In addition, company websites often include a selection of speeches by the CEO and other senior company executives, and increasingly these deal with corporate responsibility issues. These can provide first hand information on how chief executives communicate their company’s corporate responsibility messages.

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