Corporate social responsibility intersects corporate activism - Activate World

Corporate social responsibility intersects corporate activism



corporate social responsibility corporate activism

Carolyn S. Berkowitz, President and CEO of the Association of Corporate Citizenship Professionals

Carolyn Berkowitz is an accomplished Corporate Citizenship professional. Having led CSR efforts at Capital One, she re-envisioned Capital One’s corporate philanthropy focus and led a team of 35 CSR professionals to develop and execute a $450 million, ten-year strategy to prepare low- and moderate- income people for future success. She was twice named among the “100 Most Influential Business Leaders” in Washington, DC by the Washington Business Journal, and earned the Washington Area Women’s Foundation’s Visionary Award in 2015 after serving as Board Chair from 2013-2015 and Board member since 2006.


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Season 1, Episode 4:

Corporate social responsibility includes elements of philanthropy and sustainability. Corporate social responsibility or corporate citizenship continues to evolve and grow to engage team members, serve the common good, and enhance operations. Business leader activism can elevate corporate social responsibility to greater outcomes and challenges.

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Transcript

Corporate Social Responsibility Intersects Corporate Activism

Carolyn S. Berkowitz, President and CEO of the Association of Corporate Citizenship Professionals

Season 1, Episode 4 Transcript

Jon Mertz:          00:02          Welcome to the Activate World Podcast, a series on how business leaders have more power to solve societal issue than any elected official. We explore business activism with substance and depth of thought.

Jon Mertz:          00:18          We’re very excited to have Carolyn Berkowitz with us today. She’s the president and CEO of the Association of Corporate Citizenship Professionals, and we’re excited to explore the topic of corporate social responsibility. Carolyn, welcome to our podcast.

Carolyn Berkowitz:  00:32          Thank you, Jon.

Jon Mertz:          00:33          You have a wonderful background filled with a lot of accomplishments in different roles. Give our listeners a little bit of background on who you are and what brought you to this new role with the association.

Carolyn Berkowitz:  00:43          Sure. I am a mixer of corporate resources and opportunity and influence with nonprofit and social change by trade. I’ve spent my entire career in that space of business and society, and I joined this organization just over a month ago, actually.

Jon Mertz:          01:05          Your association uses the term “corporate citizenship.” What characteristics make up a good corporate citizen?

Carolyn Berkowitz:  01:11          Corporate citizenship is actually broad. It is really, it characterizes the relationship that companies have with society and the role that they play in improving society, especially in ways that improve the context for doing business. So when I think about great corporate citizenship it includes the environment, it includes the relationship with community and community-based organizations, it includes the relationship with employees, it includes the way organizations are governed. It’s sort of the gamut of how business and society interact.

Jon Mertz:          01:58          That’s great, so corporate social responsibility or CSR is both a program, a term, and much more than that. How did the CSR programs began?

Carolyn Berkowitz:  02:07          Before we go there, I will say I often use the terms interchangeably, corporate citizenship and corporate social responsibility. I think corporate citizenship is ever so slightly broader, but I use them interchangeably, and many do. Corporate social responsibility actually started pretty early on, and I would say that the sort of founder of corporate citizenship, if you will, started with Andrew Carnegie and Rockefeller and those business leaders in the late 1800s who challenged wealthy people to support social causes. If you move on to the corporate space in particular, we’ll go all the way to 1950s or so, and there was an economist and a college president name Howard Bowen, who people think often as the father of CSR. He really talked about the responsibility that companies have to society, and he published a book in 1953 with a quaint name, but it advocated for a very important issue, which was business ethics and responsiveness to societal stakeholders’ role types. The name of the book was called Social Responsibilities of the Businessman.

Carolyn Berkowitz:  03:29          As we sort of move a little further, I would say it was the 70s when the idea of the social contract between business and society actually took hold, and I would credit that with the Committee for Economic Development. There were a number of early adopters in the 70s and 80s, so I think about companies like Hershey’s, I think about companies like Disney, a number of companies, Johnson & Johnson, whose founder was Robert Wood Johnson, companies like Allstate and Coca-Cola and AT&T and the Bells then. These were companies that worked closely with customer groups who were families, and I think actually that family connection is what brought them closer to the idea of social responsibility. There’s this obligation that business has to constructively serve the needs of society, and we’re operating in the context of this large group of stakeholders, and we owe them more than simply to make a profit.

Jon Mertz:          04:34          Yeah, it’s interesting. You mentioned the family aspect. Then there’s corporate sponsorships, and then again there’s social responsibility as well. Is that all under one umbrella?

Carolyn Berkowitz:  04:44          I think they are all sort of parts and pieces, so I think corporate philanthropy at its core is pure charitable giving. You saw more pure charitably giving in those early days. I think actually that is a good thing, because I think pure charitable giving is not sustainable for a company. It’s not sustainable for shareholders, and it’s too easily cut when it does not provide any kind of return whatsoever, and return doesn’t necessarily mean profit. So I think corporate philanthropy is best leveraged when it connects back in some way to the business. Corporate sponsorships are really more of an opportunity for marketing, and that’s when a company gives money to a cause for eyeballs.

Jon Mertz:          05:35          Is conscious capitalism just another way to develop greater momentum around corporate citizenship?

Carolyn Berkowitz:  05:40          I think conscious capitalism is sort of a brand, if you will, of a philosophy, introduced by a guy named John Mackey who was one of the founders of Whole Foods, and Raj Sisodia, who’s a professor at Babson University. What they believe is that using the power of markets that businesses can solve social and environmental problems, and that innately the potential of business and its market power has some of the most creative opportunity to make positive impact on the world. It also focuses on the culture of the business, so it says that in order to be able to do that, the corporate culture has to one that’s trusting and that’s authentic and that’s caring and that’s innovative. I think those things are true of all good corporate social responsibility programs.

Jon Mertz:          06:34          Are there other things that you see that are just as strong as sustainability that are happening within the corporate world today?

Carolyn Berkowitz:  06:40          When I started in corporations, when I made the shift from nonprofit to corporation, which was in the early 2000s, only some companies or the obvious companies were really touting their sustainability or even measuring their sustainability. It was a very nascent effort, so you’ve seen how quickly and how comprehensibly that’s taken hold. I would say similarly, diversity, equity, and inclusion is taking hold right now, and it is happening rapidly and it is happening rapidly because society is demanding that it happen rapidly. It is also happening rapidly because business needs are demanding that it happen rapidly. The research around diversity of boards and success in companies is powerful. I think the need to grow talent in the United States and not necessarily simply to import talent from other countries is palpable for companies. So when we think about the things that are driving diversity, equity, and inclusion to take hold like sustainability did, it’s both market forces and societal forces, which is when things happen.

Jon Mertz:          07:47          So as those programs begin to take hold, what can we learn from the sustainability initiatives to make the uptake of diversity and inclusion either happen faster or be more robust as it’s being implemented?

Carolyn Berkowitz:  07:58          I think like with sustainability, if the initiative isn’t authentic, if there isn’t a genuine desire beyond just the market pressures to do this work, and a real self-reflection on the part of a company, I think it becomes not much more than lip service, and it’s those community partnerships that can be some of the R&D for these bigger initiatives. So I think very often engaging with the community in different ways will help a company to be more authentic.

Jon Mertz:          08:33          I think that’s a great point, and within that you’ve highlighted the necessity of good collaborative work both within the company, especially between HR and other functions, but then also leveraging outside groups, whether nonprofit or otherwise, to bring those initiatives to fruition.

Carolyn Berkowitz:  08:47          Absolutely. I mean, it needs to have cross-sector partnerships. Ultimately, there needs to be industry partnerships, so when you think about the Per Scholas, for example, they work with Barclays bank on a training and placement program, and then Barclays works with others in the banking industry so that if they are not hired by Barclays, they can be hired elsewhere, and so that’s one of the rare inter-industry collaborations that you see where a company and other companies really are looking at the sector in general and not just an individual relationship with a nonprofit that is to the benefit of one company and only one company.

Jon Mertz:          09:36          What other innovative approaches are you seeing companies take around corporate social responsibility?

Carolyn Berkowitz:  09:41          I think that there is a lot, actually, that’s going on. I think there are a lot of companies that are using their technology and their company’s innovation for social good, so UPS, who is one of our members, for example, is using their drones to deliver blood and to save lives in Rwanda. I think that there are companies that are using their buying power to incentivize human rights or environmental stewardship and diversity, so that’s when you think about how does supply chain management influence these outcomes. There’s companies that are applying really new technology like blockchain and artificial intelligence to social issues around education and public health. So I think we will see much more of that in the next year or two.

Jon Mertz:          10:32          Shifting the direction of our conversation just a bit, CEOs are voicing their opinion and getting involved in some policy discussions. It fits with corporate citizenship, I think, but how does it also fit with corporate social responsibility?

Carolyn Berkowitz:  10:45          CEO activism is a part of a company’s CSR, and so I think CEOs are increasingly understanding that when a company’s values are threatened that the employees, that customers, that families impacted expect them to take a stand. So I think that when it is absent of a larger CSR strategy, it gets a little bit dicey because there are not necessarily stated values that the company is already working within. So when something potentially does happen to a company that has stated CSR values and is already seen as a good corporate citizenship, the stain is not as deep or as lasting when there’s a crisis as when a company does not have a good CSR record.

Carolyn Berkowitz:  11:46          Even if you look at something like what happened with Starbucks and the racist incident that occurred recently, Starbucks had a few things going for it. Number one, it took immediate action and the action was good, but number two, they already had a record of good corporate citizenship, and so there was some dissonance in the minds of the general public. Wait, that doesn’t sound like Starbucks. Wait, Starbucks is kind of a good guy. So I think that’s one place where there just really needs to be good ongoing, serious, authentic CSR. When we sort of flip and you go back to the activism space, so it doesn’t necessarily come from something that’s happened internal to the company, it’s happened as a result of something external, I think that there’s really good examples of authentic activism.

Jon Mertz:          12:37          It seems like in the past, call it the 80s and 90s, that some CSR programs were more like at a department or a separate organization, but in today’s world if a CEO is going to embrace more of an activist role within these conversations, they need to ensure there’s more of an integrated approach between their principals and their programs, so there’s that substance to back up their words.

Carolyn Berkowitz:  12:57          I think that’s exactly right, and I think companies are really struggling right now for frameworks around this. How do we know within 24 hours? Which is what the public, by the way, expects. How do we know how to respond within 24 hours other than it just hits us wrong? I think that like with other big business decisions, that companies would benefit from frameworks around what are our values? What do we support? What do we care about? What do our customers care about? What do our employees care about? And really having a good handle on those things and being able to sort of apply more systematically that framework to the decisions they make about whether they are the right voice in something.

Jon Mertz:          13:42          Millennials in particular are expecting business leaders to step up. How do you see that generational shift as you look at corporate citizenship and CSR as it continues to evolve?

Carolyn Berkowitz:  13:51          It is huge and it is huge even one year over another. 42% of millennials actually seek out a company’s position on their stand on social issues as consumers, even more so as employees, and that’s changed by 10% year over year. I think part of that is that the workforce is changing and being dominated by millennials. We know that millennials have a different view of how society and business ought to operate together. They don’t see them necessarily as separate, and I think that change is actually a good sign for corporate activism and CEO activism taking hold, because their employees are actually really pushing them.

Jon Mertz:          14:43          Yeah, and how can we continue to encourage that?

Carolyn Berkowitz:  14:46          You know, I think that millennials need to continue to realize that their voice matters. If you look at Salesforce and what happened there with a CEO that one would think of as woke, and the fact that millennials actually inside the company and the employee base really pushed on their CEO about ICE as a customer of their product, and when instead the CEO offered to support nonprofit organizations that work with immigration issues and that are on the front lines of some of the really horrid things that are going on at our borders with families, the employees said, “That is not enough for you to give money.” And the organization said, “We won’t take that money.” So I think employees have a powerful voice and activists, quote/unquote … So there was a study done in 2017, actually, that says 15% of the workforce in corporate America considers themselves activists, but among millennials that’s 26% of the workforce in corporate America that actually calls themselves an activist. And among management in companies that’s 20%, so as millennials become management, these things are going to really start to change.

Jon Mertz:          16:14          What’s your advice for CEOs at large companies to do over the next 90 to 120 days to better understand corporate social responsibility and activism?

Carolyn Berkowitz:  16:23          First of all, most big companies now do have corporate social responsibility groups, and I think CEOs don’t often speak directly with them or don’t often enough speak directly with them, so I think number one is seek out your corporate social responsibility lead. Include them at the table. I think the biggest mistake is failing to invest the resources that are required to be successful. When CSR is side of the desk, it’s not going to be very effective, but when CSR is resourced and it’s authentic, as you can see with Starbucks, it can make the difference literally for success or failure when something occurs.

Carolyn Berkowitz:   17:06          I think the second thing is for CEOs to really understand their values, and so there might be stated corporate values, but I think they need to really look at their customers, they need to look at their community stakeholders, they need to look at their employees, and they need to get a good sense of their values, and how well these things intersect and where they all land on social issues so that when something occurs, they have a framework that they can follow and make great decisions quickly.

Carolyn Berkowitz:   17:38          Then the third thing I would say is to get your hands on three studies. One of them is the Global Strategy Group’s Business & Politics: Do They Mix 2018 study, which is on the expectations of corporations to act quickly to address important social issues. There is really important data in there that I think if CEOs understood that and really took it in, they might change immediately. I think the other is a study by Weber Shandwick also in 2018 on CEO activism. It’s called CEO Activism in 2018: The Purposeful CEO. And then I think the study by Povaddo. It’s called Corporate America’s Point of View, the study Examining Corporate Activism and Employee Engagement Inside Fortune 1000 Companies. Those three alone will make a CEO who is not prepared for all of this to spend many sleepless nights wondering how they can prepare.

Jon Mertz:          18:53          Those will be sleepless nights well spent.

Carolyn Berkowitz:  18:56          Sleepless nights well spent in partnership with all of these disparate groups in your company who now are really wanting to help the CEO develop these positions to work across and really come to the table with the key pieces of information about their various constituencies that can be very helpful to a CEO who’s making that kind of important decision.

Jon Mertz:          19:23          Yeah, I think that’s a great point. There’s a lot of conversation on our civic discourse about too much segmentation happening within our society, but if the CEO reads these three studies and thinks through them and involves the right people, perhaps they can blur some of these lines between the segmentation within a company and really rally people around some common initiatives.

Carolyn Berkowitz:  19:43          That’s right, and it is equally difficult inside companies, even those that are most collaborative, to work across in the kinds of ways that really create the best decisions, and especially around some of the non-revenue generating activities where it’s easier to have some fiefdoms, whether it’s HR or sustainability or corporate social responsibility or marketing, where numbers can be a little bit softer and more difficult to measure. So I think really having those groups work across and bring their best selves to the table will benefit every CEO in America and around the world.

Jon Mertz:          20:33          As Gen Z enters the workplace and wants to find out what’s happening within a company or take that activism bent, what advice would you give to them?

Carolyn Berkowitz:  20:40          I think before a young person accepts a job they ought to do their homework on a company’s stance on social issues and a company’s CSR. I think in a hot job market, Gen Z and millennials have many choices and they can find a company whose values align with their own, and in the meantime just asking the question in job interviews, which companies collect all of that data. What do they ask? What do people want? So when that question is asked and the HR department has to go someplace else to get the information, it begins to register that companies need to invest more in these things.

Carolyn Berkowitz:  21:23          I think once a young person takes a job, they need to immediately become active in the employee resource groups. Most companies have them, so an LGBTQ employee network, an African American network, a women’s network. There are all kinds of networks now. Or women in tech network. I think it’s really important that the employee doesn’t just get involved in their own, but that they get involved in others and support the other resource networks, and those resource groups will grow and will have a more active voice when people join them and get active in them, and they can provide real internal pressure and they can provide real external guidance to relationships and partnerships.

Carolyn Berkowitz:  22:11          I think that young people, when they work inside corporations, need to realize that they don’t have to be in a job called corporate citizenship to incorporate it into the role in the company that they play. I think when you are seeking funding for a new business, be loud and proud of the fact that you can differentiate yourself with the social returns, because even the largest and most [stayed 00:22:42], if you will, funders, investors, like BlackRock, are demanding this.

Jon Mertz:          22:48          Sound advice, and much more than that, I think you’re right too. It seems that the next generation, it’s a part of who they are, and they may challenge other generations to step up their game. Carolyn, I want to thank you so much for joining us. Your service is a wonderful example and you’ve given us many insights on how we can take our activism and put that to work within our company or any initiative that we’re involved in outside of our organization as well.

Carolyn Berkowitz:  23:13          I’m so glad, and I thank you for doing this, because getting that voice out there is so important for young people generally, for companies that want to attract young people. The more we understand how much of a market force this will be, the more likely it will be to take hold, so I’m delighted that you’re doing this. Thank you.

Jon Mertz:          23:40          Listeners, we love to hear from you. How important is authenticity to you when it comes to CEO activism? How do you gage authenticity? What do you think makes a good corporate citizen? Send your perspective to me at jon @ activateworld.com. That’s Jon without an H, J-O-N, @activateworld.com. Write it out or record it. Send it my way. We want to hear and share your thoughts.

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Join us next time as we explore employee activism with Joel Makower, the co-founder, chairman and executive director of GreenBiz Group. Activate World is a team endeavor. Special thanks to Kaela Waldstein and Kent Nutt. Music by Jason Goodyear. For Activate World, I’m Jon Mertz.