CSR reporting becomes a mainstream quality career
by Henry J. Lindborg
Charismatic leaders and highly successful organizations benefit from a halo effect. People tend to believe they have specific positive qualities or skills because they make a good impression. The phenomenon, identified by psychologist Edward Thorndike in 1920, affects our opinions about leaders and corporations.
Is the gregarious CEO good at finance? If we like her, we infer that she is. Does an organization have a thriving culture? If it’s successful, we believe it does because the judgment is based on a confirmation bias—the halo—and not specific knowledge.1 The halo, however, can quickly disappear when a corporation’s reputation is damaged. When this happens, the public can blame the wrong causing factors without evidence.
The traditional measure of maximizing value for shareholders is no longer a guarantee of public confidence, causing many corporations to burnish their halos with reports on their beefed up corporate social responsibility (CSR) efforts. These usually address issues related to stakeholder relationships, philanthropy and sustainability. However, CSRs vary in style, content and credibility.
While corporations make these reports available on their websites, independent sites like the Corporate Register (corporateregister.com) offer comprehensive, updated collections from a range of industries. For individuals interested in establishing or improving a formal CSR system, learning about effective issue management, communicating corporate results or studying business ethics, the reports present a wealth of information and challenges.
To understand the current state of CSR reporting, I consulted Paul Scott, the Corporate Register’s London-based director.
HL: What is CSR?
PS: It’s shorthand for a range of non-financial issues affecting businesses. There isn’t a single definition because it means different things in different global regions and is evolving.
HL: It’s new to many of my graduate students and clients. Where did it come from?
PS: For some perspective, the concept of CSR didn’t exist 25 years ago, but that of environment, health and safety did. Gradually, additional issues such as supply chain, ethics, social responsibility and philanthropy were added to varying degrees according to business sector and region. We see new issues added regularly. CSR is, therefore, a loose concept. Some commentators equate it with corporate sustainable development.
HL: What do you do?
PS: My organization takes a keen interest in this field. Since 1997, we have collated every corporate, non-financial report and made the entire library available online, free of charge—now more than 60,000 reports from 12,000 organizations across 160 countries. We tracked the development of the issues that organizations report—the way they are reported and the frameworks that are followed.
HL: How did you get started?
PS: In 1990, I found myself working for an international branding and media organization that was asked to produce the first environmental report for a multinational organization. Having written one of the first reports in the United Kingdom, the organization was approached to write for other businesses, and I was hooked. Here was a new niche market with no rules or guidance, and an opportunity to set the pace. After writing around 30 of these reports, I decided to collect all the available reports published globally and make them freely available online. That was in 1996. In 1998, I changed my company name to CorporateRegister.com and never looked back.
HL: In using reports in my graduate classes, I’ve noticed an explosion of new documents. What’s happening?
PS: The CSR reporting market is developing rapidly, but it’s in a state of flux. Organizations realize their stakeholders expect to see these reports—whether they read them all is another matter—and in some regions it’s becoming mandatory.
HL: The variety of reports makes them difficult to compare and evaluate. Is this a problem?
PS: The biggest challenge lies in conflicting frameworks and agendas with no clear steer on which will come out on top. Will CSR and sustainability reports continue in their current formats, or will they become integrated with annual financial reports? Short, comprehensive, printed or online? Independently assured or not? Ask three consultants, and you’ll get five different perspectives. This makes the field anything but humdrum for communications specialists.
HL: Are there job opportunities for those interested in CSR reporting?
PS: The communications market seems to be moving away from the boutique specialists and toward the larger communications practices as CSR reporting becomes mainstream. There are always career opportunities for those who can grapple with ever-evolving CSR issues, and having an intelligent and incisive approach is definitely a prerequisite for making a mark.
- Phil Rosenzweig, The Halo Effect...and the Eight Other Business Delusions That Deceive Managers, Free Press, 2007.
Henry J. Lindborg is executive director and CEO of the National Institute for Quality Improvement in Fond du Lac, WI. The institute provides consulting in strategic planning, organizational development and assessment. He holds a doctorate from the University of Wisconsin-Madison and teaches in a leadership and quality graduate program. Lindborg is past chair of ASQ’s Education Division and of the Education and Training Board. He is a past chair and current member of the IEEE committee.