Why Everyone Hates Your Company.

Guest Author Ryan Scott is the founder of Causecast and creator of the Community Impact Platform which helps organizations become better global citizens through increased volunteer and fundraising engagement around social change. The article "Why Everyone Hates Your Company" first appeared on their blog.

While the Occupy Wall Street movement has cooled a bit, one thing hasn’t changed: public distrust of corporations is at an all-time high.  According to a poll taken last year by GfK Custom Research, a majority of Americans (64 percent) say it’s harder to trust corporations now than a few years ago.  Over half (55 percent) say that it will be tough for corporations to gain their trust in the future.  And among so-called “influencers,” corporate distrust stands at a whopping 74 percent.

This dismal impression is in keeping with the popular (more like unpopular) view of CEOs, the public face of corporations.  According to Edelman's most recent Trust Barometer, 2012 saw a massive decline in trust of CEOs.  On the other hand, trust in peers (regular folks like employees) dramatically increased, and for the fifth year in a row, NGOs are the most trusted institution in the world. 

Given this set of facts, what's a corporation to do? How can a perceived bully go from being hated to loved...or at least liked?

The answer, my dear Corp.: show you care about something besides yourself.  Get emotional, get involved, get responsible.

There's a name for this: corporate social responsibility, or CSR.  Of course this concept is nothing new, but given the stench that's fairly or unfairly associated with most companies these days, I thought that it was worthwhile to revisit the basics.

So here's your refresher, my business friends, in case you've been losing sight of it amidst the stormy economic weather.  Also known as sustainable responsible business, social performance and corporate citizenship, the basic idea is always the same. Corporations must act as contributing members of the community, with their responsibility to do so written right into their business plans. The concept of CSR recognizes what most of us already believe: a company's obligations aren’t only to its shareholders.

CSR takes many forms.  Corporate philanthropy, whether in the form of cash donations or pro-bono, skills-based work is one excellent way of creating goodwill in a community.  The preponderance over the last few years of goods distributed via Fair Trade -- a market-driven movement promoting sustainability and aiding farmers in developing countries -- has become another way to demonstrate good corporate citizenship.  Creating Shared Value (CSV) is an approach to CSR that doesn’t view business and the community as separate entities at all; rather, this concept purports that the success of one’s business and the success of its community are interdependent.  Indeed, it’s hard to imagine a corporation that could thrive on a deserted island, isolated from any type of community. 

Lest we forget, CSR has bottom-line benefits for corporations.  Good corporate citizenship creates a corporate culture where altruism is just business as usual. This in turn creates a brand identity strongly associated with doing the right thing, which customers respond to with increased loyalty. Think about how Patagonia, The Body Shop and Ben & Jerry’s have carved their entire brand identities from their principled positions around ethical business and good corporate citizenship...and the dedicated following that has resulted.  And in the cutthroat race to hire top talent (even amidst a down economy), CSR is crucial; amongst Millenials, 92% want to work for a socially responsible company.   

Concrete economic benefits of CSR have been well documented.  A 2004 study, for example, found that companies with a brand reputation of corporate social responsibility were more profitable and able to mitigate public relations disasters better than companies that didn’t have strong CSR brands.  Average revenues and assets were higher amongst strong CSR brands, market capitalization was almost doubled, and stock portfolios increased almost twice as much.  Other studies show that 80% of the 250 most profitable companies globally filed CSR reports in 2008. A 2009 study showed that CSR was associated with an increase in return on assets of between 1.8 and 2.5%.  This lends credence to the idea that what is good for the community is good for the corporation.  

Some view CSR as anathema to the role of business in society - believing that profits themselves are a form of social responsibility.  I respectfully disagree.  At a time when corporate distrust is at an all time high, actions most definitely speak louder than words (and unmitigated greed).  Corporations can - and should, for their own sake if nothing else - choose to be a part of the solution rather than the problem.  In doing so, companies might find themselves more accepted, trusted and, in the best of all worlds, even admired.  

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