Extra, Extra! Read all about our good deeds!
Allison Shirreffs
September 29, 2006

As the saying goes, every dark cloud has a silver lining -- although upstanding corporate leaders may not have bought into that cliché in the weeks following the Enron scandal. To tweak another cliché, it seemed a few bad apples could make life difficult for a whole bunch of trees.

To right the ship and stymie egregious behavior, Congress passed the Sarbanes-Oxley (SOX) Act of 2002, a set of regulations so thorough it takes more than 1,100 sections to outline.

Appeasing the government is one thing; it's another to pass the word to the public and to stakeholders that a company has nothing in common with the unethical side of its corporate family. To do so, companies played up news of their good deeds.

The result has been a surge of corporate social responsibility (CSR) reports. With titles such as "Committed to Community" and "Corporate Citizenship in Action," CSR reports have the look and feel of an annual report without the balance sheet.

CSR reports are one vehicle companies use to increase awareness of their positive accomplishments.

"It's not just a brag sheet," said Ann Cramer, director of corporate community relations for IBM Corp. "It's a wonderful statement of who we are as a company."

Before Enron and the fall of corporate heathens, such as Tyco International and WorldCom, IBM collected information chronicling its philanthropic and charitable deeds; however, different divisions gathered information and filed separate reports.

Today, IBM compiles a single CSR report completely recounting the company's philanthropic efforts. It includes information pertaining to corporate governance (including SOX information); work-life balance; healthy living; environmental protection; and the general goings-on of the company. "It's how our company operates and does business in the community," Cramer said.

During the past five or six years, CSR reports have moved from "something nice to have" to being "highly integrated into the strategy of a corporation," said Karen Beavor, president and CEO of the Georgia Center for Nonprofits. CSR reports help stockholders and investment companies, as well as communicate to employees what their employer is all about, Beavor said. "It creates pride and acts as a retention vehicle."

Cramer said she also believes CSR reports help recruit new employees. "It's about working for a place you have respect for," she said.

And these reports speak to the public as well. "Studies have shown consumers are more loyal to socially responsible companies," Beavor said, adding that excellence in corporate citizenship delivers value to society and a company's bottom line.

In addition, compiling such reports helps a company study whether its philanthropic efforts are aligned with its business goals, strategic endeavors and branding. The reports also make transparent exactly where, and in some instances, how much, companies are contributing.

Internet-based financial institution NetBank Inc., headquartered in Alpharetta, supports organizations such as Habitat for Humanity, the Georgia Affordable Housing Corp. and TechBridge. It does so because it's the right thing to do and because it helps NetBank's bottom line.

"[Our CSR helps] us leverage our resources to reach an even broader part of the low- and moderate-income community," said Greg Jones, director of regulatory relations for NetBank. "The stronger all parts of our community are, the stronger our business will be."

Putting together CSR reports helped IBM work together "on a common business model of alignment," Cramer said. "Through leveraging each other, we can have higher impact."

The powers that be at IBM realized this could work on a macro-level as well. So, the world's top provider of computer products and services enlisted several other companies -- including FedEx, GE and General Motors -- to launch the Global Leadership Network (GLN). The creation of the GLN, states the Web site, is "to advance excellence in corporate citizenship through the alignment and integration of responsible practices into the core business strategy of companies."

For a fee, companies can access corporate citizenship planning and evaluation tools, as well as a data base of best practices, from global leaders. The GLN is an opportunity for large companies to compare data in a consistent and transparent way, Cramer said, and to have access to fact-based solutions, ideas and access to peers within other companies.