We recognize that your job is hard. It is difficult to make decisions about how to invest limited dollars. You are often behind the scenes absorbing many points of view from colleagues and others, making sure that your cause partners and executive leaders connect successfully, while managing issues on “both sides of the aisle.” You also have to say “no” to many worthy causes –an unenviable task.  For all of those trials and for the good results that come from them, thank you.

Giving USA estimated that total dollars given by corporations in 2010 exceeded $15 billion (about 4 to 5 percent of all gifts given in the U.S. each year) and the Chronicle for Philanthropy estimates that corporate giving will stay level in 2011.  Charity Navigator recently invited donors and charities to take part in a survey about year-end giving trends for 2011.  The survey was completed by 565 donors and 101 charities. Charities responding to this survey noted that they receive 41percent of their annual contributions in the last few weeks of the year. That is a huge proportion (and a potentially huge vulnerability and source of stress) if you are in a nonprofit trying to manage an annual budget.

The Charity Navigator survey also asked both the donors and the charities how important they considered various issues to be in considering which charity to support. There were some interesting differences between the perceptions of donors and charities. Donors and charities are mostly aligned on the importance of a charity’s financial health and effectiveness at achieving their missions. When questioned about the importance of a charity’s accountability and transparency (this includes ethics, good governance, disclosure practices), the majority of donors (87 percent) indicated that this issue is very important to them. In contrast, fewer of the charities (73 percent) believed donors considered their accountability and transparency important when considering whether or not to make a donation. The study also showed that donors are very concerned about nonprofit executive compensation.   Fifty-six percent of donors rated this as important when selecting a charity to support. Charities’ didn’t anticipate this as an important issue for their donors, with only 12 percent identifying it as such. Similarly, Guidestar’s “Money for Good” study released in November of this year notes that all donors, despite different motivations for giving, identify effectiveness and impact data as the areas where users say the information is important and is not meeting their needs.

Donors were asked if they planned to give at year-end. More than 90 percent indicated that they do plan to give in this quarter – about the same percentage as in 2010. Most will give about the same amount. Some will give more and some will give less. Thankfully, this matches closely the charities’ expectations of what they will receive.

The season of giving is driven, in large part, by empathy. This study made me think that we might benefit from extending that impulse not only to those in need, but also to those who work alongside us to serve those in need. At year-end, when the pervasive messages of the holiday season remind us to be thankful for what we have and to remember those who are less fortunate, and with the recession putting more pressure on many nonprofit organizations (and their corporate partners) to serve more people in need with even more constrained resources, it would be a shame to have potentially effective partnerships derailed by misunderstanding or misalignment of partner priorities.

The Charity Navigator study presents a terrific opportunity to initiate a conversation with nonprofit partners who you value, but who might not understand the pressures that corporate giving professionals can encounter when advocating support for specific charities. Appreciating others’ perspectives is the first step toward being able to meet others’ expectations. We all have time constraints and want to make most efficient use of our time together to achieve work goals. Securing the needs of the partnership only helps to create a stable base for serving your philanthropic mission more effectively.

Having a hard time justifying time out of the office to have a conversation about your partnership? Think of it as an investment. A recent study from the Academy of Marketing Studies shows that in order to realize fully the brand equity that can come with longstanding sponsorships and philanthropy, the relationships need to illustrate both a compatible partnership between brand and cause and a long-term commitment. Spending time not only on the needs of the people you serve, but also on your partners’ needs can lead to even more stability and better outcomes for the recipients of your philanthropy that can benefit all of us. So have a friendly holiday lunch, or make it a New Year’s resolution to invest in your partnership. It will only give us more to thank you for.

Among the images that present the contrasts between these percentages, one of the most widely reported was of the group of affluent citizens attending a cocktail party on the balcony of the legendarily exclusive Cipriani’s during the first week of the protest (now into its third week). Attendees were filmed sipping champagne, looking down on the thousands of protesters, and even snapping photos of the throng with their smartphones. That moment has been compared in the press to the Roman circuses and the comparison is sobering given how apt the analogy seems and how the Roman era ended. Though the protest seemed to be well contained during my visit to the city, more than 780 people have been arrested since it started on September 17 – more than 700 of them for obstructing the Brooklyn Bridge this past weekend.

The fact that the occupation/movement/protest (leaderless non-specific expression of a broad cultural zeitgeist of disaffection) has drawn so many is significant. Similar actions are taking place in multiple cities.  As significant as the numbers drawn is the fact that despite having a diverse set of complaints, the local foci of the protest in all of the cities where the movement has taken hold are the symbolic centers of commerce – in Boston, the Federal Reserve; at the epicenter of the movement, Wall Street, which is symbolic of – if not synonymous with – business in the U.S.

Media interviews with participants reveal a collection of people of disparate backgrounds – a 60-year-old unemployed veteran, grandmothers, average workers, college students and recent grads – drawn together to channel their shared anger over the trend of income inequality and the corruption of the American way into advocacy for our collective well-being.

Protesters have numbered in the several thousand over the weekends. On the Monday and Tuesday when I observed them, there were a few hundred. Where had those protesters gone? Many probably went back to work at their jobs in corporations. Going back to a corporate job after protesting against Wall Street might seem incongruent. It seems that this is an inherent condition of modern human experience. Just as Google Circles allows us to share different facets of experience with people who inhabit each sphere of our lives, so must we think long and hard about what we project and protect, through action or deed in all of our citizenship domains.

Corporations are ultimately groups of people connected by implicit and explicit contracts and covenants.  When the interests of the corporation and the individual are in sync, there can be tremendous potential for positive impact. I heard a powerful example of this on the same trip to New York at the Commit!Forum from Jeffrey A. Joerres, CEO of the ManPowerGroup. He recounted that after the tsunami last year, the Japanese government realized its capacity to generate power sufficient to restart manufacturing operations was 30 percent shy of what was needed. Collectively, Japanese corporations turned off all of the lights in their high-rise offices during the day and all non-essential night lighting (think Times Square on a massive scale going dark except for street lights). Households participated as well. With this collective action, Japan was able to conserve and redeploy almost all of the electric power required to restart the manufacturing so vital to its economy. Individual companies put the interest of the entire economy over the interests of their own firms.

Seeing the protesters on Wall Street made me wonder if we have in this country the collective will and ability to focus our actions in a disciplined way toward a common goal. At the Center, we talk about citizenship as a combination of rights, obligations, privileges, and responsibilities – and we focus on corporations as the unit of analysis. In the United States, there is cultural emphasis on the rights of individual people or entities to act freely, to compete, and to win status, resources and power, to the fullness of their ability, and to exercise privileges resulting from successful efforts. Our cultural focus on rights of individuals seems increasingly out of balance with ensuring that basic needs are met for a growing number of disaffected and increasingly disadvantaged people in this country. The focus on competition and individual achievement doesn’t seem to improve our well-being or happiness. With one of the highest GDPs in the world, the U.S. does not rank at the top of any of the global indices for educational attainment, health, or happiness.

At a time when national employment and poverty statistics paint a picture of greater want for more people than at any time since the War on Poverty in the ‘60s, we cannot rely on corporations alone to solve significant social and environmental problems, nor can we blame corporations for all of the significant problems that we face.

The perspectives of greater numbers of individual citizens seem to indicate that we are living in a world that we don’t like or want.  Recent Gallup polls put approval ratings of big business and Congress at the lowest levels that they have ever been (each near 15 percent).  This is a world of our own making.

Individual and corporate citizenship co-exist in the U.S., and one cannot substitute for the other. Both must be exercised in order for our system to work.  As individuals, we must stop looking to institutions to solve our problems.  Good corporate citizenship is necessary and should be expected of firms, but it typically and appropriately addresses the question, “What kind of world do we want to do business in?”

Many firms engage in good citizenship and contribute positively to our civic and social environments.  Employees of corporations should support these initiatives and act as ambassadors for the good works that their employers can accomplish with and beyond profit-making. This employee involvement, however, should not be mistaken for personal civic engagement.

The rhetoric of occupywallstreet.org may not represent my perspectives and values, but if I do not participate in an alternative collective, I deserve what I am served. Corporate citizenship does not replace personal individual action nor can it answer the question, “What kind of world do I want to live in?”  As individual citizens, we must make sure that our institutions seek the outcomes that represent, as nearly as possible, the answer to the latter question.

Corporate citizenship professionals are often asked why their firms should make investments in the community and environment – and there is then often a scramble to find a financial return justification. It is neatest when we can do well by doing good, but that is not always possible. Sometimes the return on community investments is not immediately quantifiable (on the quarter) and sometimes returns are purely social. They may create a more welcoming or more manageable environment in which the business can operate, but the firm might be just as profitable without having made them.

The empirical link between corporate social performance (CSP) and corporate financial performance (CFP) has been investigated for 35 years. In 2009, researchers from Harvard, the University of Michigan, and Berkeley analyzed 192 effects revealed in 167 frequently cited studies (Margolis, Elfenbein, Walsh). Their analysis revealed that positive corporate social performance correlates to small but positive financial performance effects in all but 2 percent of the studies they analyzed. Their conclusion: while these social investments yield typically only very small if any financial returns, they have not been shown to diminish value to shareholders. The major implication of this research is that Milton Friedman’s (1970) widely adopted concern about social investments reducing value for shareholders is likely misplaced. The data indicate that companies are not penalized for social investments. The data also reveal that firms that do well are more likely to do good (i.e., strong financial performance is a better predictor of strong social performance than the other way around).  Penalties seem to accrue only to firms that do wrong and perhaps only if they are caught. Analysis also suggests that firms might benefit from communicating more about their good works.

The association of positive effects is strongest for the specific corporate social performance dimensions of charitable contributions, and environmental performance, and when the actions were reported by observers or self-reported by the firm. The association is weakest for the dimensions of corporate policies and transparency and when CSP is assessed more broadly through third-party audits and mutual fund screens.

Correlation between revealed misdeeds and negative performance was also observed. Though not included in the study, it is worth mentioning that an interesting characteristic of this type of effect is that it can be contagious beyond the firm that has conducted the misdeed, think of oil spills and oil stocks; toxic CDOs and financial stocks, etc.

Given that the data seem to prove that corporate social investment can’t hurt and it just might help on the margin, perhaps the question we should be asking about firm investments in social issues is “Why not?” In their article, the scholars identify questions that will only become more important to understand as we work as a society to manage our limited resources and distribute our limited wealth,

“The impact that organizations have on our lives, along with the meaningful purposes that people (employees, customers, citizens, and investors) seek to pursue through them, implicates a much larger question …. How do we live with organizations that shape the distribution of costs and benefits, advantages and burdens within society? How do we live with organizations that infuse our lives with meaning, or fail to?”

Last month, Gallup released its annual poll on the confidence of the American public in institutions. Big business received consistently low scores with fewer than 20 percent reporting a great deal or quite a lot of confidence from a 1975 high of 34 percent. Only banks and politicians have seen more precipitous declines during the same period and only Congress rates lower currently. Even from a perspective of enlightened self-interest and risk-management, it would seem reasonable to be concerned that sustained levels of distrust and low confidence will not continue to occur without consequence.

Forty-five years ago in his Cape Town speech, Robert F. Kennedy issued a call to action to the youth of that era (now two generations removed). He talked of the danger of allowing personal ambition and financial success to create a sense of complacency that promulgated the status quo noting: “We must act effectively.  We must deal with the world as it is (AND) …idealism, high aspirations, and deep convictions are not incompatible with the most practical and efficient of programs – that there is no basic inconsistency between ideals and realistic possibilities, no separation between the deepest desires of heart and of mind and the rational application of human effort to human problems.”

Our world is better today in some dimensions than it was then and worse in others. Our successive generations have not done all that we can, certainly, but we will make no additional progress if we do not answer Kennedy’s call to envision a better world and ask, “why not?”  Studies show that it can’t hurt.

Having data like the studies cited is one of the reasons the Center recently introduced our Research Briefs – a new knowledge product that provides summaries of recent or seminal research findings from corporate practice and academic study. Our goal is to provide you with information that will help you demonstrate the value of your work and how it ties to company management and performance.

Margolis, Joshua D., Elfenbein, Hillary Anger and Walsh, James P., “Does it Pay to Be Good…And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial Performance” (March 1, 2009). Available at SSRN: http://ssrn.com/abstract=1866371

It is a question that is asked usually in tones of dismay, despair, disbelief – and it has been asked often in the last year about events that might confound our optimism about human intentions.

In a knowledge economy, human capital is part of the equation. Employees can be a firm’s greatest asset and most valuable resource – and its greatest liability. It is not the monolithic corporate entity that has failed in our most notable recent crises, but people within them. I am not judging. All of us have the capacity for failures as great and consequential, and for triumphs of even greater magnitude.

The earliest notions of citizenship combined rights and privileges accorded an individual with expectations of participation in civic life to advance the common good of society. A virtuous citizen accepted, in addition to privileges, obligations to contribute to the community beyond participation in markets or governments. Our perceptions of our citizenship obligations may vary according to the position we occupy within our social or corporate structures. If there is anything the past year should teach us, it is that we might benefit from imagining what it would be like to experience citizenship from the perspectives of others. This is certainly true when we are designing corporate citizenship, philanthropy, and community involvement programs, but it might also benefit those business functions and life pursuits that have less obvious connections.

In addition to contributing the positive brand of your company, your ideas about corporate citizenship and those that you hear from your stakeholders through the multitude of channels available today have the potential to help you imagine a different way of operating, a new product, a new service, a new business model, a new way of engaging stakeholders, of supporting a community. Perhaps we should try to spend more time imagining the world we want to live in and asking:

“How can I make this better?”

Your corporate citizenship is part of an evolving covenant between business and society and – make no mistake about it – society is changing in ways that we have demonstrated we are not prepared for. The radical disruptive innovations of just the past five years may be dwarfed by others that we have yet to experience. Our appetites are out of sync with our ability to preserve our natural environments and resources. Both individual and corporate citizens are going to have to change how they do business. Corporations face the added complexity of having to engage with customers and stakeholders faster than ever before. Well-prepared professionals grounded in corporate citizenship have an opportunity to make tremendous contributions in this context.

You have the relationships, the expertise, and the data to help develop and guide new business strategies for this millennium. Being able to articulate the risk of inaction and to quantify the opportunity that can be found in new modes of engaging stakeholders and markets and supply chains may be the way forward. If it is, there is no group of people who are better positioned to guide us as we imagine the future we want for our world. Now our task is to make sure we are prepared. So I propose that each of us take time every day to imagine the world you want to live in and ask yourself and those around you…

“How can I make this happen?”

It is an investment in your future.

As our most prominent global leaders departed Davos, Gallup released several polls that highlighted related themes. Among them, one conducted January 7-9 noted that 67 percent of Americans are dissatisfied with the size and influence of major corporations today, the highest level since Gallup first asked this question in 2001. Of seven aspects of the United States rated in the poll – including questions about the influence of government and religion – Americans are least satisfied with corporate influence.

The same poll revealed that we are more skeptical about the opportunity to get ahead by working hard. That’s likely because in our third recovery since 1991 in which jobs have not followed GDP recovery, unemployment as of the end of January has hit 9.8 percent and underemployment may be approaching 19 percent. As business leaders are called to participate in the development of our national economic policy, this may be the time to re-examine in what kind of society we want to live and operate and what may be required to attain that standard. Will we wait to get sufficient numbers of disaffected unemployed youth in revolt to make changes?

Among the G7, the American GDP was second only to Canada, yet our employment picture was at the bottom by a large margin. Unemployment here is higher than Britain, China, and Russia, and much higher than Germany or Japan.  The EU nations with worse unemployment than the United States (Greece, Ireland, and Spain) have not yet emerged from their debt crises. Most agree that relative to most other countries, American employers operate with many fewer restraints. We have weak unions in the private sector and laws in many states that favor at-will employment arrangements.

The pressure on business is to maximize profit and our collective sigh of relief at the multiple recent proclamations of the recession’s end actually created a breeze. None of us wants to see the equities allocation in our 401K statements dropping value.

President Obama has urged companies to create jobs by investing the growing equity on their balance sheets but firms are concerned that consumers will be slow to spend and are overburdened by debt – making pre-recessionary revenue levels difficult to attain. In times when consumption is reduced especially, there is pressure to reduce costs to maintain margin. The highest impact place to make cuts is typically payroll.  We do not make it easy for firms to keep workers.

The still-substantial ranks of people out of work only add to an existing problem of income inequity in the United State. Since 1975, practically all the gains in household income in the United States have gone to the top 20 percent of households and most of the gains came at the very top, according to the CIA World Fact Book. Statistics like this should make us consider whether our current measures of business success will yield the best results for our society – and the long-term prosperity of business. Even Alan Greenspan in his 2008 congressional testimony admitted that financial markets failed to regulate themselves, and that his assumption that they would had been proven wrong. In that same prepared statement, he predicted that unemployment would increase, credit would tighten, and the future stability of our economy would be a long way off. He also noted the stress that would be placed on working American households.

Past recession recoveries were V-shaped and companies would keep the expense of good workers on the balance sheet so they had them on call when the upswing of the V occurred.  This practice would result in lower measured productivity during recessions.  We are now in long, flat U-shaped recoveries that demonstrate higher productivity.  In his Worthwhile Canadian Initiative blog post, “US Productivity Exceptionalism”, Nick Rowe notes that labor hoarding only makes sense when the human capital is firm-specific. So when countries have big falls in sectors such as construction, where the human capital is general, jobs are shed and productivity goes up in recessions counter cyclically. This also means that when layoffs come they typically hit the least specialized workers first and in the largest numbers, (note we see unemployment of below 5 percent for college-educated workers).

We cannot expect that every person in our society can be college educated – and there is plenty of other work to do.  As a society we will pay for this gap in many ways – decaying infrastructure, increased pressure on social services as more people lose their foothold on the path to attaining “The American Dream,” and ultimately reduced competitiveness. Recent policy focused on saving banks and plugging gaps in state budgets may have been necessary, but it does not help businesses participate in the long-term strengthening of our society. Our strategy has been to grow the economy to grow jobs but data suggest that strategy seems to benefit only the top quintile of earners in this country.

Now the president is offering tax breaks and other government support for exports and innovation. He has proclaimed that he “gets it” when business leaders talk about their obligations to shareholders to make investment decisions based on economic conditions.

Perhaps now is the time to think about how we measure the economic value created by business. More jobs would mean more people participating in the economy, but possibly that profits would be returned to shareholders in smaller increments. The Global Reporting Initiative is moving toward its next generation of guidelines, Bloomberg has put ESG indicators on its terminals; accounting firms are gearing up for non-financial reporting practices, and the Obama administration has started down the path with its business advisory group. In this context we should remember that as individual and corporate citizens, short-term profits do not always create sustainable gains and ask how we can, as a society, make it easier for businesses to consider more than profit.

Share your ideas here about how we can do this most efficiently.

Other sources:

• Gallup report–Good Jobs:  The New Global Standard © 2011
• In Wreckage of Lost Jobs, Lost Power by David Leonhardt, The New York Times, Jan. 19, 2011
• Gallup Survey: Unemployment Solidifies Position as Most Important Problem, Feb. 11, 2011

This requires us to address directly issues that may present conflicting interests and values. That’s not easy, especially in an environment made ever more complex by increased scrutiny of ever greater numbers of people – people who may either stay at the surface of an issue or suddenly and in vast numbers dive deep into one of its dimensions.

As I read a recent story about how financial institutions are bracing for a potential new wave of information leaks, two thoughts occurred to me:

1. Being leaky is not the same as being transparent.
2. As a society we are in the midst of an information technology revolution that is moving so fast  we have not yet caught up to understand its potential impacts.

It seems that (in parallel with the progress of the 21st century) we are in our “tweens” and headed toward a kind of social adolescence. As is often the case with those only approaching maturity, we don’t always see how we are affected by the forces of development and therefore clumsy at times in how we deal with it.

Being leaky implies there are holes in an otherwise seamless container or closed system that holds its contents intact and safe from exposure, only to be dispensed in increments as decided by the owner of the vessel.  When breaches occur, they cause the contents (the proverbial beans) to be spilled at our feet while creating opportunities for others to look into the container.  If we think about information as the content, it is clear that the power of information technology has compromised any company’s or individual’s ultimate control of its story or message.  Narratives will be weaved in increasingly communal ways, with multiple, sometimes conflicting versions that are retold and revised on an ongoing basis.

Einstein noted that information is not knowledge. A state of historical amnesia exists today because the amount of information we experience leaves us intellectually immobilized by the fatigue that results from trying to process the volume and velocity. Faced with this paralysis we give ourselves permission to look away from the torrent of bytes that flow past and stay at the surface.  The challenge of our new era of transparency is to be able to know what to pay attention to, what to discard, what requires action, what requires protection.

It won’t be easy. In a year when, Facebook’s users number 500 million (up from 5 million in 2007), its valuation has topped $50 billion (up from its approximate valuation of $30 billion just six months ago), and founder Mark Zuckerberg is the Man of the Year; Wikileaks’ Julian Assange continues to garner major headlines and you cannot live a professional day without encountering a tweet, a post, a link, or a leak, we are undoubtedly in a new era.  Social networks, knowledge communities such as wikis, and ever-faster-cheaper-better – and more mobile – technology contribute to the volume of data and information available and the velocity at which they travel.  There are many benefits to our ability to connect with each other more easily and there are also challenges and risks for business to manage.

In this decade, which can be considered this century’s “adolescence” we need to emerge a stronger and more engaged society. Business has a tremendous opportunity to facilitate this engagement. Being transparent implies that our system is open, or at least accessible, and that we are receiving as well as offering knowledge and learning about our actions and our products.  Owners, stakeholders and customers may add to this understanding or learn from it.  This state of being requires us to start our decision making processes in fundamentally different ways that could bring positive and radical transformation to the quality of all of our lives.

How is our community fundamentally different if it is based on interests and affinity rather than on geography?  What is gained?  What is lost?  How might our decision-making and behavior change if we accept up front that they are fair game for broad public consumption?  Will our business decisions change? How would we measure and report success? Over what time frames?

These are all puzzling questions. Share your thoughts here about where we might find the answers and what are the greatest opportunities and challenges they pose for business.

This is one of several Wilson Center initiatives since 2001 designed to ramp up efforts to promote international understanding. Our charge is to create a business plan for the creation of an independent organization that will work closely with, and receive seed funding from, the U.S. government to forge collaboration and support of public diplomacy, as well as private and NGO actors around the world, through grant-making. The diverse and non-partisan working group includes expertise from such organizations as Microsoft, Yahoo, Sesame Workshop, Gallup, Brookings, Heritage, CSIS, CNAS, MIT, Harvard, Boston College, MIT, and congressional staff.

The Wilson Center meeting and my conversations with cab drivers from Pakistan, Somalia, and Ethiopia during that trip made me think about 21^st century diplomacy. How was the aspiration to come to the U.S. initiated in the minds of those individuals?  It was not from direct interaction with U.S. government diplomats, but through interactions with private enterprise.

One conversation was with “Rocky” from Pakistan. He revealed in the first minutes of our hour-long drive from the airport that he was a proud and devoted family man.  As a youngster he aspired to come to the United States so that he could earn money for his family of 12.  He was 18 when he arrived here via Germany, uneducated, and alone.  Living in a car while he worked his way up from dishwasher to line cook in a D.C. hotel, Rocky ultimately earned his GED and started coursework toward his bachelor’s degree. He married, had two children, and continues to be the primary source of financial support for his family in Pakistan, including the dowries for two of his sisters’ weddings there. 

How did he know that the U.S. was his destination? He saw the prosperity of other families who had sons working in the U.S. or the especially lucky few who were working for U.S. or European companies in Pakistan. He wanted to go to a place where you could earn money for your labor and give your children a better life. Today Rocky and his family live in extremely modest circumstances. We might consider them to be among the working poor, but they are grateful for the opportunity to earn a living, and for many other things that we take for granted in industrialized economies including accessible public education, central heat, clean water, and sanitation.  

The opportunities for individual prosperity that Rocky and the others saw being generated by global businesses, both in their homelands and on the other side of the world, project a powerful image. Certainly public diplomatic work is critical to successful international engagement, but perhaps the most effective carriers of culture are the individuals from multiple countries and cultures who work in corporations side by side, day after day. This includes almost 5.2 million Americans estimated by the state department to be living and working abroad who are not engaged officially in diplomatic or military service. 

While public diplomacy has been considered the exclusive domain of government in recent times, business plays an increasingly important role in promoting international understanding and cooperation. Whether via employees, products, advertising, global operating standards, or supply chain activities, participation in enterprise and human interactions with responsible businesses enable prosperity and create value – while promoting shared values—here at home and around the world.  In talking about the benefits to society provided by corporate citizens, we cannot discount profitability and prosperity as foundational to social and environmental gains.

As leading multinational companies turn to emerging economies in Asia and Africa as future markets and manufacturing bases, I’m hopeful that a new type of cross-sector diplomacy will provide opportunities for less disparate global prosperity and security – prerequisites for global stability from which we all benefit.  It’s possible to imagine that within a generation emigrating will not be the only path to a secure financial future for people like Rocky.

So how can we support corporations in understanding the multitudinous and nuanced cultures, contexts, and value systems that they will encounter abroad – and increasingly – encounter in our own nation simply as a result of engaging in global commerce? These are subjects that we will explore more fully in our work.  Please share your thoughts in the comments section below, or contact us if you are interested in contributing a bylined guest blog in the future.

This initiative so clearly reflects what we talk a lot about: strategy and alignment in our work.  Alignment between business strategy and the interests of society can be difficult to execute. Companies cannot be all things to all stakeholders and there is much debate about where the primary obligation should lie.  To realize corporate citizenship goals most successfully, companies must select the social interests most relevant to their stakeholders and the future well-being of their business.

IBM and five partner companies—AT&T, Bank of America, Citigroup , Pfizer, and UPS—who collectively award nearly $150 billion in contracts to small businesses each year, agreed to collaborate to standardize and simplify the application process required for qualified small- and mid-sized U.S. suppliers.  For those of you with college-bound children, think of this as the “Common App” for small business.

To facilitate this, the participating companies are establishing a free, public website, www.supplier-connection.net, created and maintained by IBM through a grant of more than $10 million from the IBM International Foundation.   Small vendors complete the single, streamlined electronic application form once to seek approval to become suppliers to any of the participating large companies.  Once through the process, approved small businesses can connect more easily to these large businesses to sell goods and services.

This initiative struck me as noteworthy for several reasons.  First, the unemployment rates in this country are hurting all of us.  Of course people without jobs feel this most acutely, but businesses are facing the social expectation (and sometimes political or community pressure) to create jobs while continuing to preserve profits.  This is extremely difficult for any business in a down economy.  The scale of these large companies increases the expectations exponentially.  In recent history, small businesses have historically been considered the engines of job creation, with the Small Business Administration and others estimating that as many as two-thirds of new jobs have been born in small businesses.

According to recent Gallup Polls, public confidence in big business is at historic lows.  At the same time, small businesses are enjoying among the highest levels of positive perception they have seen and continue to be lauded as potential engines of job growth in our economic recovery.  Despite the high confidence and trust enjoyed by small business, small business owners polled in the Wells Fargo/Gallup Small Business Index in the third quarter of this year showed record pessimism about their prospects over the next twelve months along all six dimensions measured.  Experiencing related but different pressures, this group of big companies led by IBM is making a strategic decision to offer small business a boost.  It is easy to imagine this solution being applied to different problems.  It will be interesting to see the outcome of this initiative, but here are the key positive social impacts that we can identify in this strategy:

1. It is collaborative on many levels, bringing partners to the table that have a collective interest in solving the same problem.  The partners know that the best environment for the conduct of their business, is one in which small business thrives.
2. The strategy aligns with a business function (purchasing) that is central to the companies’ success.  As such, it can be a sustainable activity in the businesses that adds value to the communities in which they operate and to the companies themselves.
3. It addresses a significant social/economic issue that affects the operating environment AND the interests of all of us in society—job creation.
4. In terms of the reciprocal reputation benefit, the value to small businesses in getting approval and contract revenue from these big firms is a great “good housekeeping seal of approval,” and the big companies can legitimately claim and quantify their contributions to economic growth by tracking the progress of their smaller partners.

As a technology and services company, IBM has pulled together what appears to be a solid and smart strategy that amplifies its core business strengths. IBM has selected partners that can contribute to solutions, and it has committed significant resources. For all of these reasons, this is a strategy worth watching.

There are many other examples of companies that are collaborating to address important social issues. Feel free to share your story here.

While the headline of that article is admittedly unfortunate, Karnani is not advocating for irresponsible behavior by corporations. He advocates for aligning business strategy with the public good when possible. He touts government regulation as the “ultimate solution” to balancing profits and the public interest when profit-seeking methods may be at odds with the public good. “The only sure way to influence corporate decision making,” Karnani wrote, “is to impose an unacceptable cost – regulatory mandates, taxes, punitive fines, public embarrassment – on socially unacceptable behavior.”

We all long for a world where alignment of interests is so great, regulation so effective, and social and environmental ills so minimal that corporate social responsibility is assumed and examination of its role is irrelevant or obsolete. In the meantime, Dr. Karnani himself points out significant deficits in our current legal, regulatory and social paradigm and proposes ONE solution out of many possible by emphasizing regulation. We are working today under assumptions about markets and social norms that evolved in a simpler time and that may not be true in the 21^st century of “too big to fail,” environmental stress, and globally networked corporate operations (read people). With all of the complexity, potentially conflicting values and norms, and resulting ambiguity that exist in our globally networked world, any discussion that seeks to establish productive strategies for sustaining business and society or minimum standards of acceptable behavior is welcomed by leaders and employees of corporations alike.

Companies are full of people who work to deliver long-term value and preserve the natural and social environment that makes value-creation and enjoyment of life possible. At the Boston College Center for Corporate Citizenship at the Carroll School of Management, more than 350 member companies and thousands of individuals participate in programs, access research, and share best practices that they can use to align their CSR and profit strategies. Dialogue about how to achieve the greatest value most effectively is part of the process of determining what actions we can take to serve our mutual interests. No company can solve all the world’s ills, but each can contribute a bit by focusing on where they or their employees can make a difference, whether it is by being a better employer, a more responsible steward of resources, a contributor to healthy and safe consumer habits, or as a supporter of community needs.

Companies can and do make positive contributions whether they are B Corporations or publicly traded giants. Any examination of ideas that creates dialogue that helps us figure out how we make business and society better – together – is good.