CEOs, evaluate your corporate social responsibility – don’t end it

November 8, 2017 - 4 minutes read

We’ve all seen the headlines the last few weeks.

Woah! That’s scary!

Well, kinda.

All of these articles are talking about a recently published study in the Strategic Management Journal called Higher Highs and Lower Lows: The Role of Corporate Social Responsibility in CEO Dismissal.”

Authors Tim Hubbard of Notre Dame, Dane Christensen of the University of Oregon and Scott Graffin from the University of Georgia examined all CEO transitions in Fortune 500 companies from 2003 to 2008 and found that investing in corporate social responsibility underscored a CEO’s performance, whether it was good or bad.

“If a CEO has invested in CSR and the firm performs poorly, they are much more likely to be dismissed,” Hubbard said. “On the other hand, if they have invested in CSR and the firm performs well, they are less likely to be fired. This shows that CSR investments can be a double-edged sword — do well and they’ll buffer you from dismissal, do poorly and you’re more likely lose your job.

Suddenly those headlines seem more alarming than necessary, don’t they?

The study is still important and you should absolutely read more about it, but you shouldn’t stop investing in any and all CSR efforts because you’re afraid you’ll lose your job. CSR is still a great way to show your customers and employees that you care about the community and having a positive impact on the world, not just on your profits.

At the end of the day, stopping all CSR isn’t an option. Now, 91% of people in the world believe companies should focus on social and environmental issues in addition to profits. Social purpose is the #1 deciding factor for shoppers globally. Job seekers and employees look for a company’s CSR efforts when deciding where to work, and 70% of all employees (plus 83% of millennial workers) say they would be more loyal to a company that focuses on CSR than a company that didn’t.

Instead of ending your CSR efforts, take this great opportunity to evaluate what you’re doing and make improvements.

Are your CSR efforts making a measurable impact on both your cause/charity and your business?

Are you helping your cause or charity do something that they couldn’t do without you?

Do your employees know about your efforts? Are they excited or moved to join in?

Are your customers aware of what you’re doing? Do they know why?

Do you know why you’re focused on those specific CSR efforts?

Don’t like your own answers to these questions? Struggling to answer them? Then consider making changes. Make your corporate social responsibility efforts more measurably successful. It very well could help your company — and you — become more successful as well.