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Findings from one of the largest ever corporate responsibility research projects suggest that executives with social and environmental responsibilities are too cautious in their aims.
The European Union-funded Response project, costing 21.1million ($1.57m, £770,000) and published last month, has revealed a ‘wide gap’ between what stakeholders want and how companies are responding.
In particular managers seem ‘tied to a fairly conservative view of corporate responsibility characterized by refraining from negative impacts rather than a proactive attempt to have a positive impact on society’. The study found 79 per cent of the managers it interviewed took the former view, while stakeholders were almost evenly split on the issue. Two out of three managers viewed the company’s role as ‘fundamentally disconnected from the wellbeing of the global community’. Only 15 per cent viewed the company they worked for as a ‘global corporate citizen’.
The flagship project of the European Academy of Business in Society was undertaken by more than 30 researchers from a consortium of business schools and overseen by an advisory board that included senior executives from multinational companies. Researchers questioned 1500 representatives of 200 organizations and interviewed 210 company senior managers and 217 other interested parties, among them shareholders and government and civil society representatives.
A key finding is that company managers take a highly selective view on who their stakeholders are. Eight out of ten managers considered investors, staff and customers to be their only stakeholders. But almost all those outside the company felt the term also encompassed suppliers, community groups and other interested parties.
To bridge the gap, the authors suggest that, where appropriate, managers bring in third parties to train staff. They say that working with partners on external initiatives has only a limited effect on employee attitudes. CSR managers need to do more to raise awareness inside their organization, as this is the first step to bringing about change and may strengthen their ‘hitherto peripheral role in the company’s power structure’.
However the authors stress that they do not expect company executives to ‘think or act like non-governmental organization activists’.
For their part, stakeholder groups must become more engaged with business and more accepting of companies’ efforts to behave in a responsible fashion.
Simon Zadek, chief executive of the AccountAbility think-tank, said the findings would challenge all companies: ‘Bringing stakeholders more deeply into the heart of the business, especially in governance roles, is an exciting and potentially revolutionary development’.
The European Union-funded Response project, costing 21.1million ($1.57m, £770,000) and published last month, has revealed a ‘wide gap’ between what stakeholders want and how companies are responding.
In particular managers seem ‘tied to a fairly conservative view of corporate responsibility characterized by refraining from negative impacts rather than a proactive attempt to have a positive impact on society’. The study found 79 per cent of the managers it interviewed took the former view, while stakeholders were almost evenly split on the issue. Two out of three managers viewed the company’s role as ‘fundamentally disconnected from the wellbeing of the global community’. Only 15 per cent viewed the company they worked for as a ‘global corporate citizen’.
The flagship project of the European Academy of Business in Society was undertaken by more than 30 researchers from a consortium of business schools and overseen by an advisory board that included senior executives from multinational companies. Researchers questioned 1500 representatives of 200 organizations and interviewed 210 company senior managers and 217 other interested parties, among them shareholders and government and civil society representatives.
A key finding is that company managers take a highly selective view on who their stakeholders are. Eight out of ten managers considered investors, staff and customers to be their only stakeholders. But almost all those outside the company felt the term also encompassed suppliers, community groups and other interested parties.
To bridge the gap, the authors suggest that, where appropriate, managers bring in third parties to train staff. They say that working with partners on external initiatives has only a limited effect on employee attitudes. CSR managers need to do more to raise awareness inside their organization, as this is the first step to bringing about change and may strengthen their ‘hitherto peripheral role in the company’s power structure’.
However the authors stress that they do not expect company executives to ‘think or act like non-governmental organization activists’.
For their part, stakeholder groups must become more engaged with business and more accepting of companies’ efforts to behave in a responsible fashion.
Simon Zadek, chief executive of the AccountAbility think-tank, said the findings would challenge all companies: ‘Bringing stakeholders more deeply into the heart of the business, especially in governance roles, is an exciting and potentially revolutionary development’.
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