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Rethinking corporate social responsibility

Most brands have four core dimensions – product or service, investor, employee and societal. Historically, leadership has paid attention to them in that order, with far more effort and resources going into growing revenues and market capitalization than attracting and engaging the best talent and earning social licence.

Those days are over. Brands and companies that violate their moral contract with society pay dearly – not simply in terms of what Canadians think about them, but in how they act towards them. Simply put, we’re now voting with our wallets when brands say or do things that run counter to our values.

Today, NATIONAL Public Relations is partnering with national polling and research firm Leger to announce the results from its 21st annual study of corporate reputations in Canada.

There are four key takeaways. First, brands that we know through headlines to have violated the trust of one or more key segments of their audience lost big time.

Second, we are a forgiving society. Brands that are actively investing to rebuild trust after breaching it are seeing support return, albeit gradually.

Third, several brands enjoyed a double win in the year – most notably Sobeys, Visa and the entire hotel industry – seeing solid net gains that trace to their own initiatives as competitors stumbled.

Finally, you can’t please everyone. Brands believed to be taking a moral stand on an issue are seeing real polarity or response among those for and against that issue in the general population. Taking a stand can help and hurt a brand. It’s a gamble, however: Some companies believe it’s worth the risk to reach their unique audience.

It’s time to invert the brand pyramid, to put the customer’s wants and needs ahead of the company’s and to stop trying to create demand and focus more on meeting it. Companies need to do right by us before we’ll do right by them. We will be quick to penalize those who stray from that ethos.

A company’s policies, products, processes and partners need to reflect the values of today’s society. They need to embrace and address a Canadian market where fairness to all is the order of the day; in which transparency and accessibility are expected; and in which everything operates quickly and where things can and do change on a dime.

All you need to do is look at the #MeToo movement to realize things that may have passed as socially acceptable within or outside the workplace even five years ago are now, quite rightly, seen as morally reprehensible.

Our obligation as leaders, marketers, employers and citizens is to evolve what we do and how we do it to meet the needs of today’s consumers; of today’s Canadians.

Time is not on our side. Canadian business leaders – C Suites and boards – need to make this a priority. Talk is cheap, and we’re not great at walking the walk.

In PWC’s 21st annual survey of Canadian chief executives, leaders cite their biggest worries as being protectionism, tech disruption, taxation and regulation. All of these macro forces will play a critical role in our future, but what is missing is the “how.” We won’t get anywhere without talent, and the talent needed won’t be there if organizational values don’t align with theirs.

We have to look beyond macros and start thinking with our societal brand hats on.

What this will take is courageous leadership. Deloitte – a NATIONAL client – has identified five key tenets of courage and found that only one in 10 Canadian businesses were delivering all five. Two of those tenets – doing the right thing and uniting to include – speak to what is missing in most boardrooms and, as a result, what is missing in most operations and brands. Deloitte proved a direct link between courageous leadership and financial performance.

Canada’s corporate boards share in the responsibility to drive change. Among other things, directors have the responsibility to approve strategy and mitigate risk.

It is easy to rubber-stamp a plan when the business is delivering on its performance targets. The new reality for directors is to ensure their charges are factoring a new kind of risk into their thinking – the risk that any of their organizations’ policies and actions could be perceived as offensive, insensitive or inappropriate by any audience critical to their success, such as to women, ethnic minorities or Indigenous populations. All it takes is one issue to spark a fire of citizen activism, negative media and shattered trust.

Businesses have a choice – tackle this new reality head-on with the conviction and commitment to make a meaningful and noticeable impact or wait until something hits the fan and play catch-up.

The easy decision is to wait. Canada needs more leaders who won’t.

This piece was originally published in the Globe & Mail.

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