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Many companies striving to be good corporate citizens today face an internal tug of war between giving attention to community initiatives that address social problems and the growing demand to make environmental issues paramount.
The context of corporate citizenship
By Brad Googins
As I’ve been watching the brinksmanship going on between Russia’s state-controlled gas monopoly Gazprom and the European Union, I am reminded of a seminar I participated in a few months ago with 20 Russian oil executives representing privately-owned enterprises.
As I reflect I think of how corporate citizenship is playing out. Frankly, with Gazprom, it seems they are being driven by self-interest and political clout. That is very different than what is motivating the Russian oil executives I met at the Organization for Economic Cooperation and Development training center.
It was most interesting to see what brought these executives to explore the scope and nature of global corporate citizenship, and the unique context of corporate citizenship in Russia, particularly given the issues of governance, corruption and the evolution of the economy and society after the breakup of the Soviet Union.
Getting some insights into the unique Russian context that is driving and shaping their interest in corporate citizenship helped me once again appreciate the importance of context in setting the stage for corporate citizenship. Too often we overlook the context within that provides the drive and incentives for citizenship, but which is critical in determining the path citizenship plays within a country
In the case of Russia, citizenship is coming along rather late compared to other parts of the globe.
After the collapse of the Soviet Union, issues of deep corruption and immature institutions and infrastructure have brought huge challenges to Russian companies in adopting and implementing the global standards that are emerging around corporate responsibility.
Clearly a Russian oil company such as LUKOIL, a major powerhouse within Russia, is quickly becoming a major global player, operating in more than 30 countries. However, with little national corporate citizenship culture or tradition, the oil executives’ journey to Italy was a step in understanding ways by which they can become more grounded in corporate citizenship and begin to develop the competencies and skills necessary for driving this into their businesses.
What made the meeting most interesting for me was the interchange that took place between representatives from European corporate responsibility organizations, a few international groups such as the U.N. and the International Labor Organizations, and myself holding up the American version of corporate responsibility. As the session stretched on, all of us become quite engaged in discussing the differences between the “European” model and the “American” model. As the discussion continued, it became even clearer there was not really any clear-cut European model carved out of proclamations from Brussels by the European Union. Rather, there was the Italian model, the English model, the German model, etc.
While model may be a stretch, it is clear that the context that defines corporate citizenship is very much influenced by local and national conditions, culture and configurations that exist in every setting.
In the Philippines, for example, it would be difficult to understand corporate citizenship without factoring in the deep religious life that underlies their culture. Likewise, it would be impossible to understand corporate citizenship in China without factoring in the strong role of the state.
So this experience got me thinking about how critical context is in truly understanding citizenship in any given environment. In fact, context will more often define citizenship and differentiate it from how we might experience citizenship in other contexts.
This holds true for country context as well as company context. Consequently, we can begin to understand context from at least two major frames:
- Country context which is shaped by culture, laws, social contract and values;
- Company context which is understood by materiality and corporate values, history and traditions.
Each of these is important to understand since they go a long way in defining and determining the nature of how corporate citizenship is understood and practiced. There is no one-size-fits-all, and although we can talk about general characteristics, elements and even metrics of corporate citizenship, at the end of the day much of this boils down to context.
So let’s return to the session in Italy with the Russian oil executives. From an American perspective it reminded me of a version of our turn of the 20th century where welfare capitalism ruled in the United States.
In Russia, providing social goods to employees and communities is the defining feature, probably reflecting some of the characteristics and residuals of the communist state which was the order of the day up until very recently.
There seemed to be somewhat of a consensus that the Russian “model” lies somewhere between the U.S. and the European situation. Here country differences are more likely defined by the configuration of the social contract – the role of government, and the role of civil society. While the weight of the government would push it more toward the Europeans, the community relations nudged it closer to the American. The unique challenge at the country level is how a company connects globally, integrates locally and executes internationally.
At the company level one might argue that context is everything. Anyone who has left one company to work for another immediately understands the concept of corporate culture, values, traditions and history, and the role they play in defining everyday life and behavior. Citizenship cannot be developed unless these things are understood and incorporated into effective strategy.
Perhaps more important for context is the issues management function, which requires a materiality filter to surface the risks and opportunities that will shape the corporate citizenship strategy. So many variables need to be calculated from community issues, broader social trends, particular historical issues, stance of media, nature of relationship with key stakeholders, issue readiness, fit with business – just to name a few. The more these factors and issues are understood, the more likely it is that the approach and strategy of citizenship will be aligned and relevant to the business.
Context takes time to understand and sharp skills to refine it into key issues, risks and opportunities. Many corporate citizenship efforts fail because they gloss over this often time-consuming process in a rush to develop programs and communicate visible activities. There is no shortcut to investing in issues management, stakeholder relationships, and using issues management to assess and frame citizenship for the company.
