Companies have more staying power when management decisions consider a diverse range of interests.
In moments of crisis, companies quickly shift their attention to survival. The COVID-19 pandemic is no exception. Under these circumstances, businesses are scrambling to cope with employee safety and enforced shutdowns, among many other challenges. So it may seem misguided to focus on corporate social responsibility (CSR) now. But, in fact, there might be no better time.
To understand why, it’s important to consider what CSR involves, beyond “doing good.” Companies often view CSR as a set of charitable activities. They may support the arts, cancer research, and other deserving causes. But a more useful approach to social responsibility is one in which leaders account for the varied interests of the diverse stakeholders that surround the corporation — all the groups that influence and are influenced by its operations. (See also “How to Reconcile Your Shareholders With Other Stakeholders.”) We’re talking about workers, suppliers, local communities, environmental advocates, governments, and many others who are essential to the well-being of the business.