STITCHING TOGETHER GOOD CORPORATE BEHAVIOUR Karan Chadda
How do you do the right thing? What is the right thing, anyway? In some contexts, these are simple questions with simple answers. For organisations, the context is rarely simple and neither are the answers.
• Why PR is structurally best placed to act as an organisation’s conscience
• The role values play in guiding organisations
• Corporate Social Responsibility (CSR) needs a golden thread
Outside in, inside out
So whose role is it to help an organisation work out how to do the right thing? Ultimately, an organisation’s conscience is built collectively through its culture but, for structural reasons, professional communicators are best placed to ensure it is functioning effectively.
In-house PR has traditionally been seen as a support function: PRs don’t do what their company does. This detachment from operational functions enables a broader view of a company and its role in society.
This operational detachment is balanced by PR’s role as the voice of a company. This role requires a deep understanding of how the company is perceived by its various audiences and society as a whole.
In his book, The Business of Influence , Philip Sheldrake outlined perhaps the simplest formalisation of PR’s role when he identified the Six Influence Flows .
Here we see a firm speaks to its stakeholders; stakeholders discuss the firm; stakeholders speak to the firm; competitors speak to the stakeholders; stakeholders discuss the competitors; and stakeholders speak to competitors.
PR is the only business function to sit across all of these flows of influence. This places it as the only function with a broad view of how an organisation is perceived. PR takes what’s inside the organisation to the outside world and brings information from the outside world into the company. Professional communicators are structurally best placed to act as an organisation’s conscience.
The value of values
Organisations now face faster and greater information flows. There is also a push for greater transparency: more scrutiny by campaigners, journalists, the public, and other stakeholders. For corporations, there are moves toward greater, more transparent and more comparable reporting to financial markets (i.e. the move to integrated reporting and greater supply chain scrutiny) too. The upshot is increased scrutiny, ease of comparison, and in cases where companies are caught doing the wrong thing, faster public backlash. Ethical behaviour is not only a moral choice, it is now a commercially necessary one.
Morality is an uneasy subject for organisations, but there are tools for tackling it. The most common approach is to have a set of values or principles by which a firm operates. Values provide a set of relatively objective markers against which decisions can be made and judged. When an organisation articulates what it stands for, it is much easier for those running it to judge which decisions are right.
We’ve already set out the factors that make ethical behaviour commercially important in the short term, but there is evidence of longer term value creation too. Various brand equity and reputation equity studies show that a significant proportion of market capitalisation is dependent on the positive perceptions of a firm. Doing the right thing creates sustainable value over the long term.
The golden thread
For the past two decades, the default option for organisations that wanted to demonstrate a commitment to ethical behaviour was CSR. Although rooted in common sense, CSR quickly built a reputation as a tool for companies to “greenwash” their reputations.
One of the most high profile examples of this is BP. Back in 2000, seeking to frame the firm as an environmentally conscious organisation, John (now Lord) Browne said BP would now stand for “Beyond Petroleum.” It adopted the now familiar green-yellow sunburst logo too.
The rebrand was coupled with initiatives to increase BP’s renewable energy activities. It was met with cynicism. At the time, a Greenpeace spokesperson told the Guardian : “They spent more on the logo this year than they did on renewable energy last year. Given they spend $8bn a year on oil exploration, BP stands less for beyond petroleum and more for burning the planet.”
BP’s words didn’t match up to its actions. Beyond Petroleum was quickly dropped from use but the logo remained. Another longstanding BP commitment remains too: its sponsorship of the arts.
Campaigners believe BP purchases respectability through its arts sponsorship. In July 2016, BP announced a further set of sponsorships for the next five years. In response, over 200 artists and campaigners, including Mark Rylance, wrote to The Times  to complain about this new round of sponsorship.
Arts sponsorship is BP’s most high profile and controversial CSR activity. There are others, including supporting STEM education and initiatives to support and build the communities in which it operates. It is these other activities that make the most sense for BP to support. As a firm dependent on engineering talent, ensuring excellent STEM education provision is not just good for students and schools, colleges and universities, it is good for BP in the long run.
The arts sponsorship sits uncomfortably. The reason is because there is no clear way to link it back to what BP does. It’s not about engineering. It’s not about energy. It is corporate hospitality on the grandest scale.
What does well sewn CSR look like?
Transparency, scrutiny and the commercial necessity of behaving ethically, means that CSR functions that “greenwash” are destined to fail. CSR must become embedded within an organisation’s operational decision making or it will become a reputational liability.
The best CSR programmes are stitched together using a golden thread that links activities seamlessly back to what an organisation’s values are and what it does.
Take children’s food company Ella’s Kitchen as an example. The firm has a very clear mission to create healthy eating habits. It not only produces healthy baby food, it also promotes healthy diets through initiatives such as its ‘Veg for Victory’ healthy weaning campaign that seeks to get children hooked on vegetables from the moment they begin to eat food of any kind.
Ella’s Kitchen isn’t looking at how it interacts with society as an afterthought. The firm has initiatives around recycling of its packaging, support for children locally (farm visits) and internationally (supporting a children’s home in Zambia), and organic sourcing. All these initiatives fit the healthy lifestyle values of the brand. The firm’s mission and values run through its operating business and its CSR activities. They are the golden thread that stitches together what the company does, how it does it and how it fits in the communities within which it operates.
Karan Chadda creates brands, marketing frameworks and content that build stronger businesses. He is the founder of Evolving Influence, a marketing consultancy. He has also founded Poetry by Numbers, a data poetry project, and Read.Think.Discuss., a business book club.