A recent encounter made me think about companies and their responsibility for society. We work for them. We live next to them. We invest in them. We buy from them. They are, without doubt among the most important institutions in our lives. We think they are, more or less, greedy, and sometimes evil. Movements like 'Occupy Wall Street' show how much distrust there is, particularly in these times of continuing economic crisis. But is this vitriol justified? Are all companies anti-social, selfish, and greedy?
The answer is 'no.' Even in these times of economic hardship, most companies are dedicated to, what is known as, 'corporate social responsibility' (CSR). It makes imminent sense for companies to be good corporate citizens. As studies have shown, companies that help support common causes and help solve the community's problems enjoy a higher shareholder and portfolio values. This alleviates the concern of Milton Friedman's followers that CSR would be detrimental to a company's growth, squandering shareholder value.
Companies that invest in their communities in various forms create relationships and build trust. It has been shown that actors in the marketplace prefer to do business with those they trust. At the same times they demonstrate that they care about the good management of resources. It becomes clear that a company involved in CSR is a good steward of its business and people are willing to place their trust into it, giving it business, investing in it, or buying its products.
These findings do not escape most CEOs. According to a 2011 study of 300 companies, 72 percent have formal CSR programs despite the current economic climate, up from 62 percent in 2010. And 60 percent of them have dedicated budgets, up from 52 percent in 2010. The study shows that more needs to be done as medium-sized companies seem stalled in the adoption of CSR and a gap persists between a desire to engage in CSR and the ability to implement it. With growing public awareness of CSR, more companies will be held accountable to improve their engagement as corporate citizens.
Most recently it was British Prime Minister David Cameron who argued that the assumption that the interests of business and society are somehow opposed, need to be abandoned: "Business is not just about making money, as vital as it is. It is also the most powerful force for social progress that the world has ever known. [...] [B]usiness is [...] helping to build bigger and stronger societies. I don't think this gets celebrated enough. [...] [T]hose [...] who believe in business, in enterprise, in markets need to come together and prove the skeptics wrong."
Politicians and the public still seem to want to be able to chastise business when they make a profit. Particularly banks have been in the crossfire of such criticism.
A chance meeting with Rena De Sisto, a senior executive at Bank of America, helped me to better understand the challenges and rewards of CSR. Bank of America is an example of CSR done right, particularly in the areas of arts and culture. A small professional team, under the leadership of Ms. De Sisto, conducts a wide range of activities, which rivals any small country's ministry of arts and culture, in terms of volume and diversity. Their programs not only include sponsorships of art or theater events, but also cover a wide spectrum of music recordings, and art preservation, as well as loaning items from the bank's own art collection for public exhibition.
In these tough economic times, it is the unenviable task of Ms. De Sisto, Bank of America's Senior Vice President of International CSR, to serve the interest of the bank, as a private entity, by contributing to the common good. Is it possible to remain effective despite detrimental external factors and budgets cuts? Is it possible to successfully fight for existing programs?
For Ms. De Sisto the answers seem rather simple. She remains effective. Strong-willed and impressive, she insists that she is an advocate of the public interest, working hard internally to continue the programs. She explained how Bank of America agreed to maintain her budget, despite the pressure for cuts and restrictions elsewhere, creating a 'win-win' situation for the bank and the public. When Shakespeare's Richard III came to New York in a Old Vic Theatre London/Brooklyn Academy of Music production as part of The Bridge Project, sponsored by Bank of America, Kevin Spacey -- who is playing the main part -- appropriately praised Ms. De Sisto for keeping her promises to the performing arts in times of colossal financial difficulties.
Ms. De Sisto is sincere in her desire to keep up the level of financing of the arts and culture around the world. Explaining details of one of Bank of America's signature programs, arts conservation, she is a connoisseur who is intimately familiar with each and every detail of the works of art they are engaged in preserving. From a Gilbert Stuart portrait of George Washington at the National Gallery of Art, to a Chagall at the Tel Aviv Museum, to a Nimrud ivory carving at the Iraq Museum in Baghdad: They are treated as cultural treasures, individually and collectively. She knows, she cares, and is keenly aware of her crucial role retain and steer the financial resources to help arts organizations to carry out their missions, create new programming, and broaden the outreach.
The International CSR Department works closely with the bank's CEO and vice president of marketing, who are well aware of the importance of the CSR activities. It is important to not only know about but also talk about a company's involvement to create opportunities in a climate that fosters innovation, respect and tolerance.
President Eisenhower's statement that "[c]orporations are indispensable instruments of our modern civilization; [...] I believe [...] that they shall act for the interest of the community as a whole," could easily be a motto for Ms. De Sisto and Bank of America.
In days when companies are the target of anger, cynicism, and doubt it is soothing to learn about Ms. De Sisto's activities. She is an impressive fighter and a beautiful example, in the true sense, for what a company can achieve with its dedication to corporate social responsibility. As one of the largest financial institutions, Bank of America has commercial interests. Its commitment and its unique contributions to the community deserve respect and appreciation. In the end, it is not the profit or shareholder value that should matter when judging a company. It is what companies do with their profit that matters.