Reputation management and corporate social responsibily (CSR)

In the April issue of Risk Management, Morgan O'Rourke discusses protecting your reputation as a risk management strategy, and makes the case that reputation management is just plain good business sense.

"A good reputation can convince the undecided to choose a certain product or service and dissuade existing customers from moving to a competitor. But a damaged reputation can be irreparable and, in extreme cases, lead to a company’s downfall. One need look no further than the demise of Arthur Andersen in the aftermath of the Enron scandal to see an example of the perils of a damaged reputation."

O'Rourke suggests that ethics and fiduciary responsibility go hand in hand:

"Fiduciary responsibility means that in its quest to be profitable, an organization must consider the balance between the duty of obedience and the duty of care, or put more simply, the balance between legal obligations and ethical practices. Sometimes what may be legal may not be ethical, putting the reputation of the organization at risk."

The article also discusses active reputation management through public relations, crisis management planning, and brand building, although O'Rourke is quick to point out that such measures can't merely be skin deep - a company must have a deep and true commitment that is part of the very corporate culture.

We would take the issue one step further by suggesting that reputation management starts with your internal constituencies and radiates out. To be truly authentic - not just an external PR ploy - reputation management has to begin with your own employees. Yes, it's an old adage, but charity really does begin in the home, or on the shop floor, the assembly line, or the cubicle, as the case may be. And there is perhaps no better barometer of employer-employee relationships than workers comp. How seriously a company works to protect the safety of its workers is telling.

Right after reading this article, I came upon a series of weblog posts on corporate social responsibility (CSR) by guest blogger and author Jeffrey Hollender at FC Now. Hollender is author of a book entitled What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening. I haven't read the book yet, but it will definitely have a place on my upcoming-books-to-read list. Among the many benefits of CSR that Hollender discusses:

" ... businesses who integrate their values throughout their value chain, reduce risk, build stronger partnerships and achieve higher quality. Also, with value-chain responsibility the social and environmental costs of products and services are more fairly distributed to specific suppliers and consumers, as opposed to the society at large. Externalities then can be fairly internalized."

The series of postings are worth a read...some also have interesting comments tagged on to the post:

What Matters Most
A Definition of Corporate Responsibility
The Business Case for CSR
The Business Case for CSR II

I’m sure we’ll be discussing this topic again – CSR is a theme that resonates with us.