By Ron James, Center for Ethical Business Cultures (CEBC)
I recently joined a panel discussion at a National Association of Corporate Directors (NACD) conference on the subject of Corporate Strategy and Long Term Sustainability. The panel was facilitated by the head of Corporate Responsibility at Coca Cola joined by a board director from Newport Mining and Southern Company and the director of Corporate Governance at CalSTERS.
In reflecting on the panel discussion, 4 themes emerge:
1. Avoid the usual debate about the labels of corporate responsibility, corporate social responsibility and sustainability. What really matters is how a business defines and fulfills its responsibility to its stakeholders, including environmental stewardship, while building the capacity to continue its legacy for future generations.
2. Corporate responsibility is not mutually exclusive from corporate profitability. An organization can and should be both profitable for its investors and responsible to its stakeholders.
3. The board of directors plays an important oversight role in corporate responsibility. Boards must be as knowledgeable and understand the effectiveness of the organization’s efforts in corporate responsibility as they are about the organization’s financial performance.
4. The growth of Socially Responsible Investment (SRI) funds highlights continuing interest in corporate responsibility from the investment community.
While most companies today are engaged in some form of defining, measuring and reporting on corporate responsibility and environmental sustainability, the NACD conference elevated the discussion to raise awareness and provide education on the board’s role in this critical area.