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Part II: Clarifying Corporate Responsibility

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In my previous post on CSR in a global economy, I provided some background on what's driving the CSR imperative and how accepting responsibilities beyond the traditional expectations of creating jobs, paying taxes and making a profit is a slippery slope. As one executive from American Tobacco put it, "I just wish someone would tell me where our responsibility begins and ends." Be careful what you ask for. Nowadays, executives will find a line of citizens, academics and activist more than happy to define their responsibilities for them. On more than one occasion executives responsible for their company's corporate philanthropy initiatives have asked: "We have dozens of worthy civic organizations asking for our support. How do we choose? "

The truth is, society's potential demands on business are limitless. What a good CSR vision and strategy does for a company is define the boundaries of responsibility. It provides a logical, defensible and strategically clear delineation between social concerns that fall within the company's responsibility and those outside.

Developing a clear CSR mission and vision statement for your organization, which is a company's declaration of its reason for being, is a good place to start. Entire books have been written on visioning so I won't recap here, but in today's world if your vision doesn't clearly state the value your company brings to society, it's probably out of date. For example, "The fundamental objective of Johnson & Johnson is to provide scientifically sound, high quality products and services to help heal, cure disease and improve the quality of life," answers the question clearly.

While a clear declaration of societal benefits from the company's existence is a worthwhile starting point, it is not a strategy and doesn't delineate the limits of responsibility. There are many ways leaders can clarify their accountability limits. Asking company's stakeholders, including employees & their families, customers, suppliers, communities etc. is a good start. Johnson & Johnson's famous Credo lays out a hierarchy of responsibilities beginning with the doctors they serve and ending with their shareholders.

But again, how far do you go? You may have customers in every country in the world, but what is your responsibility to them? One answer may be that you are responsible for the impacts of your products and how they are produced. Another answer may be that you are limited by the geography of your operations. For example, you can claim responsibility in the regions where you have facilities or offices. The answer to these questions will differ for each company because each company interconnects with society in unique ways.

To complicate things even more, most companies will find there are social issues where they are only one participant in a larger problem. The challenge of global climate change, for example, is a social issue for an oil company but also for many other businesses, governments and individuals. It is ridiculous - and unrealistic - to expect a single company to take on responsibility for the whole problem. But as a concerned corporate citizen you often have an obligation to become a productive contributor to the search for a viable solution.

Again, out of the endless number of specific issues a company could respond to, from child labor to malaria, how do you determine where corporate responsibility lies? There is no easy answer but you can begin by asking yourself a few questions. The first is, "Can this problem be solved without us?" If the answer is "no" and a solution demands your participation then responsibility will be unavoidable. A second question might be, "Will the solution to this problem come substantially faster with our engagement?" If the answer is "Yes" then there may be a case for engagement.

I'm not trying to provide a definitive approach for clarifying a company's responsibilities, but instead I'm pointing out that it is a leadership task that demands careful thought and discussion. To further complicate this matter it must be noted that a company cannot unilaterally delineate its responsibility. Society will have a say. Monsanto famously tried to define its responsibility as solving the problems of agriculture through genetic engineering, only to find that many stakeholders rejected modifying the genes of other species as responsible. Leaders will need to vet and verify their assumed responsibilities with society. A definite challenge since you can't pick up the phone and dial "society." Engagement with activists, community leaders and stakeholders is the only way to verify that you are aligned with society's expectations.

So what can - and should - business leaders do once the company has delineated where responsibilities begin and end? I'll answer this question in Part III of my CSR series.

Cross-posted from Forbes.com

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