“Greed is good,” declared Gordon Gekko in the famous movie, Wall Street, and, throughout the 1980s, that may have been true; most customers weren’t concerned about the results or consequences of their purchases. They bought products regardless of the company’s reputation and didn’t bother learning about how they were made or who manufactured the product. But times have changed; there is a growing demand among both consumers and stockholders for complete disclosure of how things are made, whether the companies are conducting themselves in a moral fashion, and whether companies are giving back to the communities they serve.
The concept of corporate social responsibility is a fairly new idea; most people didn’t think to ask whether a company was involved with a community at all. For towns built around companies such as Hershey, Pennsylvania, the answers were easy to obtain since one could simply walk to the company office and ask. But if someone from California wanted to know about a company in Houston, the process was much harder. One had to sit down and either make an expensive long-distance phone call to Texas, or mail a letter asking about charitable contributions with the hope that the right person received it.
The advent of the Internet changed all that. Now a company’s activities could be surveyed with just a few keystrokes and the click of a mouse button. Now people have the ability to see which companies practice corporate social responsibility and which don’t. Corporations have to not only make money for their shareholders but do it in an ethically responsible manner while giving back to the community through charities and other projects. In fact, many companies now have a separate branch devoted to philanthropy and charity. These foundations provide tax incentives for the larger company and are used as a form of marketing towards socially conscious consumers.
In the business world, companies saw the idea of transparency as a problem while others saw it as an opportunity to disclose and promote their companies’ charitable contributions. Many businesses had already been helping nonprofit groups and charities but had never seen the need to put that information where others could see it. As the decades progressed, demonstrating that a company behaved itself ethically and helped out charitable foundations became not just a matter of convenience but a source of pride for many of the newer CEOs in the business world. GoDaddy founder Bob Parson’s Linkedin profile lists six different charities that his company assists, and many companies have specific webpages devoted to letting people know how the business is “giving back”.
The trend does not appear to be changing. A study of 47,000 consumers across 15 markets which asked them to rank the world’s 100 most reputable companies found that people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their views of the company, and only 40% by their perceptions of the products. Companies that practice corporate social responsibility combined with good profit margins will be attractive to socially conscious investors for years to come.