The seemingly inexhaustible list of ratings, rankings, and indices can puzzle even the most seasoned corporate citizenship professionals. They are as varied as the industry itself—from the Best Corporate Citizens and the Best Places to Work lists to the Environmental Performance Index. Through them, a company’s environmental, social, and governance (ESG) impacts and efforts are ranked and reported to large audiences—affecting both internal and external audience perceptions. As a company’s brand and reputation continues to be one of its most important intangible assets, contributing to up to 80 percent of a firm’s market value[i], understanding what CSR and sustainability rankings genuinely report about a company is vital.
By the end of the first full day of the 2018 International Corporate Citizenship Conference, attendees had participated in panel discussions, workshops, case studies, networking events, and four inspiring keynote sessions. They closed the day leaving with practical tools and tactics to achieve resilience and results in their companies and communities through strategic responsibility.
Every year, the Boston College Center for Corporate Citizenship gathers 600+ CSR professionals together for its annual International Corporate Citizenship Conference. Some of the most popular aspects of this three-day event are the numerous breakout sessions, where attendees can learn from expert panels, practical workshops, and in-depth case studies. UPDATE: Save the date for next year's conference, hosted by Mary Kay, in Dallas, TX on April 28-30, 2019!
Below is a recap of a popular past session: Brand and reputation. You can find this story, and more, in our quarterly magazine, The Corporate Citizen.
The interaction between a company’s bottom line, its environmental, social, and governance (ESG) efforts, and the way customers view both its product and its people is complex. Figuring out the right mix may be demanding at times. If you get it right, the rewards are more than worth the effort.
“Reputation is what people expect us to do next. It is their expectation of the quality and character of the next thing we produce or say or do. We control our actions (even when it feels like we don't) and our actions over time (especially when we think no one is looking) earn our reputation.” – Seth Godin
Predictability is comforting. We like our daily routines, we wear the same jersey or sit in the same seat when our team plays, and we tend to remain loyal to the brands we like and trust. Unforseen events can shake our confidence in corporations, so companies spend a great deal of time preparing for the unexpected to ensure they consistently deliver on their brand promises. However, businesses today face a unique challenge in that most of their value is intangible, which must be protected and advanced in different ways.
In the 1970s, a company’s market value was comprised of 83 percent tangible assets, things like the physical property, products, and machinery that the company owned. Only 17 percent of the market value of a company was made up of intangible assets, like intellectual property, human capital or reputation.[i]
Fast forward to the present day and the proportion has completely inverted. Only 16 percent of a company’s value is comprised of tangible assets, while 84 percent is made up of intangible assets (see Figure A).
The following is excerpted from Issue 15 of The Corporate Citizen. To learn more about how you can engage your employees and contribute to your communities by developing a strategic corporate citizenship plan, consider joining us on online or in Los Angeles on February 7-9, 2018 for our Corporate Citizenship Strategy: Connect to Your Business and Community course.
For companies with a smaller operational footprint—even though they may have national or even global brand exposure—great value can be achieved by developing a foundational ethos, applying that mission to every aspect of business, from design through delivery, and incorporating it into community involvement strategy.
Founded in 1991 by Marcia Maizel-Clarke and Merlin Clarke, Dogeared, a global accessories brand that focuses on handcrafted jewelry, was built on the premise of community. The company sources the majority of products and materials locally from vendors around the Los Angeles area. Local artisans handcraft all of the company’s unique charms, and jewels are designed and assembled on-site in their Southern California studio.
“It takes many good deeds to build a good reputation, and only one bad one to lose it.” -Benjamin Franklin
A company’s brand and reputation are important assets. They can influence consumer perception, increasing loyalty and purchase intent. They are important forces in attracting and retaining top talent. Perhaps most importantly, they are major components of intangible value, which can account for more than 80 percent of market value.
We may call the value “intangible”, but the results of positive brands and reputations can and have been evaluated—and valued in cold hard cash. According to a 2010 study, brand and reputation have the potential to raise the market value of a company over and above the book value—and by more than just a little.[i]
“We make a living by what we get but, we make a life by what we give.” - Winston Churchill
Giving Tuesday is a national day of online giving which is held at the start of the annual holiday season following Black Friday and Cyber Monday. #GivingTuesday celebrates and encourages charitable activities that support nonprofit organizations.
The following is excerpted from the most recent issue of The Corporate Citizen, the Center’s biannual magazine.
Setting audacious long-term goals and working toward them is the central challenge of every business. One of the challenges for high-performing companies is creating evolutionary goals that are based on a vision for a sustainable future.
Addressing Boston College’s CEO Club in May 2014, Mark Parker, president and chief executive officer of NIKE, Inc., shared the company’s evolutionary process: “We wanted a mission statement and a set of values and guiding principles that were really true to the spirit of the company—that were forward-looking, aspirational, and something that employees would actually reference and use in their work.”
Plenty of research over the years has focused on the relationship between social performance and various aspects of firm value. Adding to the literature, research published recently by the Conference Board studied over 1,000 companies from 2008 to 2012 to see if corporate citizenship contributes to brand equity. Using CSRHub’s ratings and Brand Finance’s Brand Strength Index (BSI) for analysis, the study finds a positive correlation between brand value and corporate citizenship. This held true across all of the dimensions studied with employment dimensions being most strongly correlated.
When I was younger and imagining where my career would take me, the role of Chief Sustainability Officer (CSO) did not yet exist in business circles. There were many roles focused on environmental protection but these were largely externally focused on preservation of our resources like trees, minerals and animals. And they did not offer a seat at the board room table – in fact quite the opposite.