Corporate social purpose is more than the corporate social responsibility (CSR) that businesses know of. It extends not just to the stakeholders but also to the community and environment the company thrives on. Thus, this is a critical factor boards must consider when tackling social issues in business. Boards have a critical role to play in incorporating corporate social purpose into their corporate response.
Should boards speak out on social issues?
There is an increasing trend in companies taking a stand on social issues. More corporate leaders are now proactively speaking out on diverse social and environmental issues. However, boards are still hesitant to get the company involved in such issues, especially in controversial ones, despite pressures from the masses.
Before deciding to speak out on issues, you must weigh first the implications of this course of action.
Being proactive in social issues could benefit your company and its stakeholders. It can help empower mindful thinking in the workforce and drive actions with social and environmental purpose — emphasizing the company’s commitment to ESG. Being involved in such issues also promotes social justice, which heightens consumer loyalty and company reputation.
On the other hand, you must also be tactful when dealing with such issues. There will be times when your stand may differ from stakeholders and consumers. When speaking out on controversial social issues, the message should be able to represent the board’s judgment, the sentiments of stakeholders, consumers, and the larger community the company belongs to. The board must approach issues with sensitivity, understanding, consideration, and respect to what is beyond the boardroom.
Various Issues Calling for Corporate Response
Labor
Protecting the rights of the workforce should be at the top of the mind of every company. Thus, the board should always respect basic workers’ rights. They should have an active role in implementing good labor practices. Some issues boards must tackle are harassment in the workplace, occupational safety, and increasing wages. Companies should have a cooperative relationship with their workforce to lessen disputes and increase employee satisfaction.
Civil Rights
Some barriers to promoting civil rights are poverty, unemployment, and racial disparities. Because these issues still prevail in today’s society, boards are initiating informed corporate responses towards civil rights. More companies are now showing empathy, being in solidarity, and starting equity efforts for the marginalized sectors. An example is how a company takes part in or opposes systemic social inequity through a civil rights audit. Corporate leaders can begin advocating civil rights by being participative and transparent towards a meaningful civil rights audit.
Diversity, Equity, and Inclusion (DEI)
Today, diversity does not just cover gender, race, and disabilities. Companies must use their influence and have a stand on inclusivity regardless of education, political beliefs, religious beliefs, and socioeconomic status. Hence, boards must adopt inclusive leadership. Being able to acknowledge inequities in society is pivotal in providing fair opportunities for everyone. Initiating DEI efforts helps companies to respond to challenges innovatively.
Government Legislations
Companies are expected to comply with business legislations and regulations. In the US, companies must focus on employment and labor laws, data privacy regulations, and tax code. Corporate leaders should have an active role in driving changes in government regulations that are not on a par with today’s modern society. For example, the US Labor law continues to expand, covering vast issues such as equal pay and parental leaves. Corporate boards should initiate convincing the government to continuously amend laws and regulations. This encompasses their duty of forwarding the concerns of their workforce, especially those that are beyond their capacity.
Environmental Impact
With the environmental challenges the world faces, companies should be conscious of their environmental impact. This includes various sustainability aspects, such as climate change, waste management, and pollution. The board is responsible for bridging the gap between corporate governance and sustainability. Taking part in such issues can hit two birds with one stone — sustainable and environment-friendly initiatives for your long-term goals while increasing company reputation.
How to Craft and Develop the Board’s Response
Once your board has decided to speak on certain issues, you must prepare to develop a corporate response that is informed and realistic. These simple steps can help you produce an effective corporate response that is aligned with your company’s purpose.
Silence Speaks Louder than Words
Companies can’t bear to stay silent about the issues the world faces nowadays. For them, remaining silent is worse than the potential risk of backlash. Silence can convey a powerful message. It can imply that the company lacks interest and engagement on issues that need to be addressed. To refrain from silence, you can reflect on the purpose and core obligations of the company.
Revisit the Company’s Vision-Mission
The company’s mission, core values, and purpose help evaluate if the issue affects your company. Ponder on what you want to achieve by taking a stand. Having pure motives empowers your company to make a difference and eliminate the risk of being perceived as hypocritical.
Create an Internal Response
It is a good practice to take into account the different aspects of the issue when determining your stand. Bear in mind that there are many sides you need to hear out. It is your responsibility to fact-check every information that you have gathered. Start with a clear viewpoint on the social issue at hand. You can also get insights from what other industry members say.
Listen to the Stakeholder Sentiments
It is important to put your mind to issues that impact your company’s stakeholders. You must focus on delivering a message that elicits support and positive stakeholder and community engagement. You can make use of meetings, surveys, polls, and other means to get feedback from the stakeholders and community.
Create a Feasible Response
You must develop a response that the company and stakeholders can act on. Take into consideration the time and resources that need to be allocated. This assures that your company’s contribution will be worthwhile.
Board Collaboration and Corporate Response
Today, companies are now more involved and accountable for company issues and social concerns. The challenge is for board members to leverage their leadership and influence in providing a relevant and well-thought response. Your task is to implement initiatives that will make a long-lasting social and sustainable impact.
Collaborate better at taking informed stands on social and environmental issues with a digital ESG reporting software like Convene ESG. The software allows you to digitize your sustainability data which makes it easier for the board to assess the organization’s performance and impact, and monitor ESG goals more efficiently. You get access to a one-stop dashboard with the ESG Performance and Peer Benchmarking tabs, making response planning easier and more organized.
With Convene ESG, you can readily translate your sustainability efforts into a high-quality ESG report in one click while maintaining great collaboration between the board and other teams. Learn more about how Convene ESG can make this all happen.
