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The State Of Corporate Citizenship In The US

The Center for Corporate Citizenship

Since the release of their first report in 2003, The Center for Corporate Citizenship at Boston College reports that attention to the roles and responsibilities of business in society has grown considerably in scope and attention. Consider just a few notable developments:

  1. Management consulting firm PriceWaterhouseCoopers reported in 2004 that 62% of U.S. companies required to comply with the Sarbanes-Oxley Act of 2002 see it as integrated with other corporate regulatory compliance processes; only 34% say it is not.
  2. The U.S. Chamber of Commerce Center for Corporate Citizenship has tracked the U.S. private-sector involvement in relief and reconstruction effor ts after the December 26, 2004, tsunami, and found that companies contributed more than $565 million in cash, employee and customer matching grant programs, volunteer time, and in-kind donations — a historical outpouring of U.S. corporate support for a single international disaster. Early indicators suggest that the corporate response to the relief and reconstruction needs in the Gulf Coast region created by Hurricane Katrina will exceed all previous privatesector effor ts.
  3. Judicial proceedings have begun to resolve the outcomes of the 2001-2002 corporate scandals in the energy, finance, accounting, and telecommunications industries.
  4. The performance of the overall economy and the financial condition of the business sector shifted significantly.

Economic and Business Climate: Key Trends from 2003 to the 2005 Survey

  1. Nominal GDP grew 7% in the nine quarters from the first quarter of 2001 through the first quarter of 2003. It increased by 14% from the second quarters of 2003 and 2005.
  2. Corporate profits grew slowly or declined in 2001 and began to rebound at an increased pace in 2002. Corporate profits increased by a total of 22% between the first quarters of 2001 and 2003. They grew 35% between the first quarters of 2003 and 2005.
  3. The Dow Jones Industrial Average fell sharply from the 10,000- point level at the closing of 2001 to as low as 7,300 (-27%) at the depths of the 2002 market. The DJIA recovered strongly, opening 2003 at 8,600 and rising to the 10,800 plateau in mid-2005 (+25%). In addition, there have been a number of academic, media, and outside commentaries that have had significant impact on the development of the field of corporate citizenship.
  4. The Economist devoted a cover story to express skeptical opinions of corporate citizenship and subsequently published a rebuttal by the worldwide managing director of McKinsey & Co., a global management consulting firm.
  5. C.K. Prahalad’s book Finding the Fortune at the Bottom of the Pyramid, encouraging businesses to do good and do well in low-income communities, hit the business best-seller list.
  6. In 2003, socially responsible investment funds controlled more than $2 trillion in assets and emerged as a significant force in corporate governance debates.
  7. The U.S. Council for International Business (USCIB) estimates that there are more than 1,000 codes of business conduct being produced by civil society, multilateral organizations, and trade associations.

Against this backdrop, it is clear that the field of corporate citizenship is evolving and that an increasing number of companies are actively managing their ethical, civic, and social engagement at unprecedented levels.

To date, The State of Corporate Citizenship surveys provide the most comprehensive examination of the attitudes and expectations of business executives from small, medium-sized, and large companies regarding the definition of and actions to practice their corporate citizenship. The data provide a deeper understanding of businesses’ attitudes toward corporate citizenship.

Additional information:

Defining Corporate Citizenship

For the purposes of its report, Boston College defines corporate citizenship as the commitment of companies to:

  1. Minimize risks.Work to minimize the negativeconsequences of business activities and decisions on stakeholders including customers, communities, ecosystems, employees, shareholders, and suppliers.
  2. Maximize benefits. Contribute to societal and economic well-being.
  3. Be accountable and responsive to stakeholders. Build relationships of trust that involve becoming more open about the progress and setbacks businesses experience in an effort to operate ethically.
  4. Institutionalize and integrate values into operations. Engineer corporate citizenship into the core of the business in a way that supports economic and financial goals.

Ethics + Reporting

In 1990, only 70 CSR reports were produced globally. By 2003, that number had increased to more than 1,500.
Source_ Association of Chartered Certified Accountants and

Among Global 250 companies, 64% published corporate responsibility information as part of an annual report or as a separate report in 2005.
Source_ KPMG

More than 1,000 professionals in the fields of business ethics, compliance, and conduct are members of the Ethics Officer Association.
Source_ Ethics Officer Association

Full report available at, The State of Corporate Citizenship in the U.S. Business Perspectives in 2005. Our thanks to Bradley Googins for permission to reprint this overview.

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