KQ Article

The trend continues to build momentum. Despite the state of our world economy, corporate social responsibility (CSR) is becoming increasingly popular among today's businesses. CSR dominates the business news headlines, as legions of corporations continue to embrace it.

This movement toward greater social consciousness represents an important milestone. For the first time in a long time, it has aligned the interests of business and the public, as companies and communities collaborate to promote the common good together.

But while business and the public move closer in certain ways, they drift apart in others. The financial deregulation and fragmentation of our economic infrastructure has compromised Americans' confidence in the financial services industry. The recent bailouts of prominent financial institutions have not helped matters. Nor have the suspicious pay structures of the executives involved. According to a recent survey by Harrison Group, 63 percent of wealthy Americans say they have lost their faith in financial institutions.

These conditions have reshaped the role and our sense of community in the process. Specifically, advancing the community's interests has worked its way into our purchasing decisions. Consumers now require that the businesses they patronize exercise a social consciousness that reflects their own. So do employees. Companies are now held to account for their impact on society and the planet.

A NEW ERA OF RESPONSIBILITY
While the financial crisis is forcing policymakers to rethink market regulation to mitigate risk in the U.S. economy, businesses are still cutting costs and laying people off. Meanwhile, banks, mortgage companies and credit unions are being forced to do what's right, out in the open for everyone to see, by revamping their pay and bonus structures, risk management systems, and compliance and transparency policies.

All of this is happening at a time of change, hope and opportunity in America, with the election of President Obama. This spirit of the times elevates the status of social consciousness within corporations and among the larger communities of stakeholders. Significant change is now possible in both the corporate and policy environments. But it's going to require enhanced leadership from government, legislators, consumers and businesses.

There's a lesson to be learned from the recent failure of several prominent financial institutions. Almost all of them failed to make CSR a priority. Now, as a result of their untrustworthy social and business practices, the rest of the financial services industry must clearly demonstrate their CSR to their stakeholders. Those organizations that embraced this movement from the start are now rising to the top. But it's not too late for everyone else. Being socially conscious is an excellent way for every financial institution to help reverse the issue of declining trust among stakeholders.

Mere "checkbook philanthropy" will not suffice. Stakeholders now require businesses to get actively involved by donating relevant products, services and their time. In fact, such activities comprise more than 60 percent of today's corporate contributions.

STRATEGIES FOR GETTING STARTED
Let's assume your financial institution is ready to launch a full-scale CSR initiative. Where do you begin? First, it's important to build a holistic program that supports both your business objectives while also addressing these four fundamental questions:

1. How will you properly contribute to the community to advance public interest?
2. What impact will this have on your reputation, your stakeholders and your performance?
3. In what ways will you demonstrate and prove your commitment to society?
4. How can you be held accountable for your CSR initiatives?

In addition, it is essential that your CSR program addresses all the key sustainability issues of the day, including energy, climate change, disease and human rights.

Here are some other key strategies for a smooth CSR implementation:

• Embrace new tools and technologies that can help you establish connected communities.
• Gain early consensus from stakeholders about the causes to which you plan to contribute.
• Implement marketing campaigns that encourage staff participation across your organization.
• Make it easy for employees to participate.
• Partner with fi scally healthy nonprofi t and non-government organizations that have experience in developing successful community-driven campaigns.

Our current economic crisis underscores the importance of building a truly sustainable economy for the long term. That not only requires sound leadership from government, but from businesses and consumers as well. Just like individual citizens, your financial institution has an equally important role — some would say an obligation — for bettering society at large.

Here's the good news. As you contribute to a cause larger than your business alone, you will discover that it also pays off. CSR is an effective way to enhance your competitive edge and recruit first-rate talent. And most importantly, it offers a powerful means of restoring consumer trust, by standing alongside them and working together toward a common goal.