Who is Responsible for Corporate Social Responsibility and Business Ethics?

by Sarah Bennett, SHRM-CP

Corporate Social Responsibility (CSR) and business ethics are as important today as ever. Who is responsible for establishing ethical practices, integrating social accountability, and maintaining CSR within an organization? We set out to answer this in The State of HR’s Role in Ethics and Social Responsibility research with HR.com, which I had the opportunity to participate in as an Advisory Board Member.

The Advisory Board was selected by HR.com’s research team and consisted of five panelists working under the guidance of two staff members. This was an eight-month commitment that began with collaboration to design a survey that would answer the following questions:

• Who should be responsible for CSR in organizations, and to what capacity?

• How many companies have a formal CSR strategy, and what is the impact of a strategy versus not having an established formal strategy?

• What strategies or key concepts were most crucial to business success?

• What challenges do businesses face regarding ethics and social responsibility within their organizations?

Once we finalized the survey, we sent it to our networks and posted it within the HR.com community. We collected 242 responses, which we dissected and discussed to create the final report. We further discussed the common themes in businesses that reported having developed solid ethical practices in their core operations and strategized ways to help more companies strengthen their ethical frameworks and increase social impact.

Creating a strong purpose
One of this survey's most significant key takeaways was the need for a purpose beyond profit and capturing that purpose within a statement. Purpose statements should illustrate what a company stands for and why it exists. A good purpose statement creates an emotional response and resonates with employees, customers, and stakeholders. Some of my favorite purpose statements are:

• To make life better every day for hundreds of millions of consumers where they live, learn, work, and play. – Newell Brands

• We help people across the world lead healthier and happier lives. – Walgreens Boots Alliance

• To enhance the lives of our customers by creating and enabling unsurpassed leisure and vacation experiences – Marriott International

The impact of these statements should create value that can be measured. For example, in an employee experience survey, Marriott scored in the top 10% of companies whose employees cited “purpose, clarity, and impact” as part of their positive experience. In fact, Marriott’s positive employee comments outnumbered negative comments 3 to 1, with one comment summarizing beautifully: " People first mission statement, and they stand by that.”

Code of Ethics
A formalized code of ethics, which contains annual training and certification, is a must. A robust code of ethics is the roadmap to guide employee behavior and ensure understanding and adherence to ethical principles. Without a clear roadmap containing real-world examples and expected behaviors, your company is at greater risk, and employees are unclear about what is acceptable and what is not from an organizational standpoint. This situation results in departmental norms being the informant of behaviors and actions that may counter the company's mission and values. That is why it is crucial to align your Code of Ethics to your core values, establish a straightforward, multi-channel reporting process for unethical behaviors, and outline consequences for non-compliance. You can’t know what you are supposed to do if you don’t know where you’re going.

ESG Reporting
ESG reporting, or Environmental, Social, and Governance reporting, is a process where companies share information about their performance in these areas. Our report highlighted the growing trend of organizations adopting formal ESG strategies and communicating their sustainability and social accountability efforts to stakeholders. Adopting a formal plan is important to comply with regulatory standards, assess risk areas for the organization, and help align investor decisions. By leveraging ESG frameworks, including publishing annual reports and tracking performance metrics, companies can increase stakeholder engagement by building trust with transparency in sustainable growth and ethical practices.

Leveraging Tech
Technology is critical in providing the accuracy and administrative support required to collect all the data needed to inform a CSR strategy. Software can help develop a plan, train folks on what they need to know, and benchmark to industry standards. It can also help alleviate the workforce and time required for manually tracking metrics and reporting measures, which can be the foremost hurdle to adopting a formal plan if you are a smaller business owner or CEO. Technology can be leveraged to automate internal and external data collection, reducing manual errors and creating impactful reports in real-time that can reach a wider audience and positively impact shareholder engagement.

This experience was enriching, and I highly encourage other HR professionals to get involved in similar activities through SHRM and other industry organizations. Not only did I get to contribute to something that makes a difference in our field, but I also got to meet and have insightful discussions with other industry experts, during which we shared our own strategies and best practices. I think the most eye-opening piece from the survey for me was the discrepancy between 8% of respondents who cited whistleblower retaliation as problematic versus the reported employee experiences of retaliation being an issue. This raises concerns about the actuality of transparency and accountability within organizations and the effectiveness of whistleblower protection programs.

In conclusion, The HR.com State of HR’s Role in Ethics and Social Responsibility report highlights the significance of integrating ethics and social responsibility into the organizational culture. However, this cannot simply be words on paper; it must be a belief woven into the organization's fabric in everything it does. Companies can support a culture

of integrity, sustainability, and accountability by designing truthful and thoughtful purpose statements, crafting a robust code of ethics, embracing ESG reporting, and leveraging technology that enhances brand reputation, fosters stakeholder trust, and drives long-term growth. Read the full report here: HR.com.