Corporate responsibility reporting does not equal openness and transparency

Dr. Michael Groves

The ever-growing trend for companies to produce annual reports on their corporate responsibility (CR) or sustainability record, has created more questions than it answers. There is no doubt that the reports are more sophisticated and standardised, helped along by a range of voluntary standards and guidance notes. At the same time they have however become an expensive exercise in document creation and consultancy-speak, in other words, a communication tool that tries to please everyone and consequently pleases no-one. If you want any proof of this, even the investment analysts find them boring!

At best, your jobbing CR report is just a piece of corporate wallpaper. At worst it is a duvet hiding all manner of governance failings. Close to home, one can readily cite the example of Royal Bank of Scotland, a business that was founded in Edinburgh in 1727.
It jogged along for many years and latterly had played ball on climate change, produced an annual sustainability report and ticked many of the CR boxes. The turmoil in 2008/9 and its current state need no explaining here, but what it does show is that its reporting regime merely accentuated the disjuncture between measures of environmental and community engagement and actual company performance and governance. These reports singularly failed as tools of openness and transparency.

What then, is the aspirant CR communicator to do, be they a listed or a private business? Firstly, they need to recognise that being open and transparent is perhaps more important now than it has ever been before. Firstly because the private sector has paid the price of the banks’ mismanagement and is subject to a greater level of cynicism and scrutiny. Secondly because the interconnected digital world means that business reputations can be questioned globally at the touch of a button. On the plus side, there is a growing cannon of evidence showing that companies which are prepared to open themselves up and listen to their customers and others, will be more successful. This aspiration is given impetus by the growth of blogging, online video and other social media, which can work for, as well as against, a company.

Having established that openness and transparency are good, the business must then decide what are the best methods of communicating with the many groups interested in its CR record – be they customers, regulators, investors, employees, local communities, suppliers and so forth. While it may be harder to do, I would venture to suggest that a combination of different communication methods would be most effective, be they web based (including social media tools), printed summaries, presentations, one to one meetings, debates, adverts, maps, graphs, exhibitions, postcards or tea towels.
While a baseline level of communication will be required, be it according to stock exchange or limited company rules, there remains a huge amount of scope for businesses to be genuinely interesting in relation to CR. If nothing else, it is about telling a story and responding to the resulting debate and questions. The digital world also allows the story to be told in real time, with video, blogging and graphics that show what is happening right now within the business and even across its supply chain.

Adopting a greater level of CR openness may be daunting to the ‘on message’ communication control freaks out there, but I’m afraid they will just have to get used to it. In fact they will either adapt or be trampled into the soil when the CEOs, CFOs and CIOs born into a social media dominated world, start to get their hands on and create businesses. Its already happening, so come on you corporate suits, accept that the digital diaspora will be one step ahead of your finely crafted communiqués and open yourselves up a little more.

I look forward to a time when I can see data on corporate carbon emissions that is only a day or week old, rather than a summary from the previous year. I look forward to reading or hearing the reaction of those that have benefited from the support of a corporate donation. I look forward to seeing the responses from suppliers to an ethical sourcing questionnaire. I look forward to seeing video of a production process and up to date information on pollution and safety incidents. I look forward to being able to e-mail the CR or environmental manager and get a quick response. This may all sound onerous and a logistical nightmare, but I can guarantee that it will be great for business and great for the morale of employees and those working with the company. Let us hail the end of the dull catchall CR report and welcome the world of interesting, varied, up to date CR dialogue.