(CNN) -- There is often a lot of confusion around Corporate Responsibility and what organizations need to do to account for their actions. What are the key facets of a good Corporate Responsibility policy and how exactly will it benefit the business?
Jo Causon, Director, marketing and corporate affairs, Chartered Management Institute
Corporate Responsibility is often confused with the more widely recognized term Corporate Social Responsibility. This focuses exclusively on the impact of business activity on community and environmental issues. In today's business world, organizations need to look beyond statutory obligations and be responsible for their business activities at many more levels. Failure to do this is likely to impact on the organization's reputation, and how well it can recruit and retain the best talent.
Guidelines published by the Chartered Management Institute outline the key components of Corporate Responsibility for organizations. When putting a policy in place it is important to consider five key areas: corporate governance, sustainable communities, environment, the workplace and the wider market, including customers and suppliers. These categories should encompass the organization's business-critical stakeholders and be taken into account when considering its areas of responsibility.
After analyzing these groups, you will be able to identify the risks and opportunities that are most material to the business, and how the organization is currently managing these issues. The success of your policy will clearly depend on how well you can engage key stakeholders throughout the process, setting performance indicators so activity can be measured, and regularly revisiting the policy to ensure that it is aligned to the overall business goals.
Taking a structured approach to Corporate Responsibility will make the policy more effective and have the most benefit to the organization in the longer-term. For example, evidence from the latest National Management Salary Survey suggests that the majority of UK organizations are struggling to recruit and retain enough talented people. In a competitive labor market, your organization can use a responsible and accountable approach to business as a way of attracting the best people.
Corporate Responsibility is also likely to resonate with customers, alongside factors such as quality of product or service. Having a reputation for integrity and respect can build customer loyalty based on distinct values that differentiate your organization from the competition. It can also have a significant impact on recruitment, retention and engagement with employees, but only if it is implemented and measured through a formal process.
Director, marketing and corporate affairs
Chartered Management Institute
The Chartered Management Institute is the only chartered professional body that is dedicated to management and leadership. It is committed to raising the performance of business, supporting and advising individuals and organizations, and to help tackle the management challenges you face on a daily basis. E-mail to a friend