Last month, Barron’s published an editorial by Alex Friedman and Larry Hatheway on the need for the U.S. to move toward more sustainable capitalism. They were right. For the longest time, Wall Street has been rewarding companies that put shareholder value and profits first, often at the expense of their own employees, suppliers and partners. After all, those have been the key metrics for corporate success. But today, it’s no longer enough.
This shift to stakeholder value is even more critical today. There is no question that the COVID-19 health crisis is changing society and how we view the world around us. People are taking notice of how companies, governments and politicians are responding to the pandemic and the actions they are taking. And once we have successfully emerged from this pandemic, there will be a social reckoning for brands. People will be keen to support, work at, or do business with companies that did the right thing, stood by their employees and partners at a critical time and overall took a responsible stance.
Several executives and companies have led the way to find a balance and support the communities around them, even before the pandemic. Salesforce CEO Marc Benioff is a shining example of someone who has not only been outspoken on several social and political issues but has also taken steps to move them forward and help the community. Others have followed suit, and it is making a difference.
This is why now, more than ever, corporate responsibility should be at the forefront of every company’s strategy—not an afterthought or an initiative reserved for companies with deep pockets or at a mature stage of growth. Finding ways to support the common good in a way that aligns with a company’s business strategy should be as important as delivering shareholder value and profitability. Every company, regardless of its size or stage of growth, should make corporate responsibility and stakeholder value a key area of focus.
To make an impact, companies should keep the following things in mind:
- Be realistic. Be clear on your mission, vision and values, and what behaviors truly matter to you as a company. Identify the causes you want to support and make a commitment to do so, only if your business can afford it and if you have the resources to follow through. This is not a time for half-hearted steps or self-promotion. There is nothing worse than taking a public stance or a pledge for publicity, only to have to backtrack or contradict yourself down the line.
- Good corporate responsibility starts with your people. Before you start helping the local community, make sure your employees are taken care of and feel supported. Take steps to help them transition to the new realities of working from home and ensure that the most vulnerable workers are protected and financially secured. Nobody wants to find itself in TQL’s position, the second largest logistics provider in the US, that came under fire last month for firing hundreds of employees simply because the company “didn’t have the technological bandwidth to support all of its employees working remotely.”
- Make corporate responsibility a cross-company function. Corporate responsibility is not an initiative that should be orchestrated in silos. It’s not the sole responsibility of the HR or the public policy team. It is an integrated function that should start at the top and cut across the entire company. Marketing and communications leaders should be involved in the planning and decision-making process along with other corporate functions, and not simply called upon at a later stage to only promote the results.
- Be authentic and thoughtful in your communications. This should be an obvious one, but it’s worth repeating. Now is not the time to boast, as people will see right through it and your efforts will backfire. Focus your communication on why you’re providing assistance, keep it simple, show empathy and provide examples of how you’re helping your community.
Today, there is no question that the COVID-19 pandemic is creating unprecedented challenges. The toll on human lives around the world has been devastating, millions are unemployed, and entire industries are in the brink of collapse. This is the time for companies to evolve and advocate for corporate responsibility, because it is the right thing to do. Eventually, when this pandemic disintegrates, the world around us will be vastly different. At that time, we will be craving to find a new model of corporate success, one that advocates for and supports the common, social good.