Up the Ante: Consumer Demands Lead to Corporate Social Accountability (CSA)

Rockfeler P. Herisse, Ph.D.--Partnership Advisor/Energy Executive/Life Coach

Starting from the Bottom Line Up

When SustainAbility founder John Elkington coined the term “triple bottom line”[i] (TBL) in 1994, some thirty years had passed since the business world was introduced to the concept of Corporate Social Responsibility (CSR). Perhaps it is fitting that we revisit today the international private business and partnership construct that is based on a self-regulated premise geared towards establishing a “social license” from the marketplace. Also described as corporate conscience or corporate citizenship, CSR often starts as an organizational policy and then becomes a business strategy that is integrated into a business model. Over the years, CSR has evolved from corporate self-regulation to industry-induced schemes at local, regional, national, and even transnational levels. Public sector organizations (e.g., the United Nations, U.S. Agency for International Development, Department of State, UK Aid, GIZ, etc.) typically use “triple bottom line” in considering private sector partnerships. As part of the due diligence process including TBL, they look at corporate image, social responsibility, financial soundness and policy compatibility. An emerging trend in the marketplace, however, is the demand for accountability by corporations when the economic stakes and political gambits are stoked to higher (read toxic) levels. Accountability in this sense means being able to see a direct correlation or actions that reset the corporation to profitmaking pathways.

As the name implies, CSR is structured to advance an organizations’ (i.e. corporate) mission as well as serve as guide to what the company represents socially (i.e. to its consumers). Businesses have traditionally engaged in socially responsible activities for strategic or ethical purposes. From a strategic perspective the aim is to increase long-term profits and shareholder trust through positive public relations and high ethical standards to reduce business and legal risk by taking responsibility for corporate actions.[i] Over the years positive public relations have been bundled as “the three well-known “Ps of CSR”—not Public-Private Partnership but paraphernalia, pens, and power sticks. So shallow have the give-away “events” or token “activities” become that the “R” for responsibility is being viewed as the result of a social movement against unbridled corporate power (from the early to mid-1960s) transformed by corporations into a “business model” and a “risk management” device, often with questionable results.

What is at Stake

TBL consists of three Ps indeed: profit, people and planet which, when framed as a core business strategy, allows the company to stay true to its main reason for being in business in the first place. Beyond a simple snapshot of how the company may be viewed at a particular time or within a particular market or even market segment, the corporation’s financial, social and environmental performance were measured over a period of time. Companies and nonprofits were set up just to track and publish scores similar to the Transparency International Index or the World Bank Doing Business Indicator. According to the TBL tracker, only a company that produces a TBL is taking account of the full cost involved in doing business. But as we have seen, the events of the past year (2017-2018) have tested companies in a number of ways and changed mainstream discourse about the reaction corporations should have and roles played in advancing and addressing social and global challenges. The public conscience is now demanding accountability—a more active and, when done well, pragmatic approach to engaging with the marketplace.

Watershed Moments Demand Both Responsibility and Accountability  

Merriam-Webster dictionary defines accountability as “subject to having to report, explain, or justify; being answerable, responsible.” In one series of his publications “Accountability: Taking Ownership of your Responsibility”[ii], Henry Browning makes the following distinction: “Whereas responsibility is generally delegated by the boss, the organization, or by virtue of position, accountability is having an intrinsic sense of ownership of the task and the willingness to face the consequences that come with success or failure.” Meaningful and decisive steps are taken in a progressively conclusive manner while addressing the matter(s) which may have disrupted social norms or the corporation’s own values.

Consider the case of Papa John’s Pizza (PJP listed on the table below) and its expressed “P.A.P.A.” value touting “people are priority always”. When irrefutable and disparaging comments about African-Americans were attributed to company founder and CEO John Schnatter, major sponsors or “partners” (i.e. the NFL and its large African-American athlete pool and followers) demanded corporate social accountability. Schnatter’s remarks suggested that the company did not “prioritize” or value African-American people and in response the PJP Board removed him as Chairman. Mr. Schnatter filed injunctions and brought on lawsuits against the company that he founded, only to be rebuffed by the judicial courts and the court of public opinion.

Listed on the table below are some examples of very successful and powerful corporations that, when their brand and corporate identity were challenged in the marketplace, chose a particular type of response deemed as the most fitting for the set of circumstances before them. The “Response” is oversimplified here to point out what the legitimizing public is increasingly expecting from Fortune 500 companies.

TABLE GOES HERE

The Susan Fowler whistle blowing essay was very much about sexism and harassment during her time at Uber. It was also about what happens when the “corporate social license” providers demand for accountability. By the end of 2017 after the essay was published, other stories and examples of corporate irresponsibility were brought to light and the #MeToo movement went viral in a historically transformative manner. One could argue that CNN’s Paris Dennard was ensnared by the movement as corporations began to pay closer attention to the treatment of women by men in the workplace. The company may declare a “suspension” for public consumption. Deep within the corporate confines, such individuals become pariahs that pose a threat to brand value.   

Conclusion

Current trends project increasingly a move away from the Triple Bottom Line (TBL) to a sense of responsibility for the actions and performance of the corporation in the marketplace. Customers, and to a greater extent, stockholders, are very alert and tuned in to the various social media and methods for mass communication. Any transgression can go viral within 30 seconds and reach millions throughout the globe. Partners with social licenses who had considered themselves vested on the basis of shared values would either control through crisis communication tactics or demonstrably pivot via a separation or settlement (a la Megyn Kelly for $30 million from NBC). By no means are we advocating for an end to the use TBL in the corporate social partnership lexicon. TBL should remain a tangible consideration. Instead, experience is now showing that when a partnership is based on shared values with metrics and openness for communication and accountability, the prospects for greater returns and mutually beneficial outcomes increase. Incidences that may arise to snarl the public image and dim the brand value will continually be addressed with a combination of crisis communication strategies. The prevailing trend shows a coupling of crisis communication strategies with demonstration of accountability. The consumer and competition base have upped the ante; they are now demanding corporate social accountability.

[i] Corporate Social Responsibility. Wikipedia. Retrieved 2018-06-04.

[ii] Henry Browning, Center for Creative Leadership (CCL) Wiley, 22 Jul 2013 - Business & Economics. Retrieved 2018-11-20.

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