The Role of Leadership: Business and Social Responsibility

I’ve been thinking a lot about the role of leadership in an organization. This may be because I am a C-level employee managing a not-for-profit organization, my father was a street gang leader in the Philippines in the 1950s, or my great uncle was a guerrilla warfare soldier during World War II. Leadership is in my DNA. I’ve always been fascinated by the way leadership manifests itself within a body of people, the behavior of those in charge, and the decision-making process leaders take to achieve their goals.

What makes a great leader? In his 2014 TedTalk, Simon Sinek, management theorist for the Rand Corporation and advisor to the US military, proposes that good leadership starts with safety and trust. Instilling the feeling of safety is imperative to establishing trust and building mutually beneficial relationships. Here are some other interesting points that Sinek presents on leadership:

• Leadership is a choice, not a rank.
• A leader is a person who chooses to look after the person left of them and the person right of them despite rank.
• Great leaders would never sacrifice the people to save the numbers. They would sooner sacrifice the numbers to save the people. They value heart count vs. headcount.
• When people feel protected by leadership in an organization, they’ll trust and cooperate.
• We call them leaders because they go first. We call them leaders because they take the risk before anyone else does. We call them leaders because they choose to sacrifice so their people may gain. And when they do, the natural response is that their people then may sacrifice for them.

If these elements are key indicators of strong leadership, how do individuals respond when strong leadership is lacking? As a member of a senior management team, how do I approach performance issues in my employees? How do I determine a course of action to improve the internal climate and morale at work? What do I do to build social responsibility?

What Is Corporate Social Responsibility?

In the context of business, social responsibility is understood as a set of initiatives aimed at delivering a positive environmental impact and benefiting consumers, employees, communities, stakeholders, and the public.

Investopedia defines social responsibility as follows: “Businesses, in addition to maximizing shareholder value, should act in a manner that benefits society.”

The International Organization for Standardization (ISO) emphasizes that a business’s ability to balance pursuing economic performance and adhering to societal and environmental issues is a critical factor in operating efficiently.

Why Is Corporate Social Responsibility Important?

1. It Boosts your Brand in the Eyes of Customers

Today, consumers care about social and environmental issues more than ever. Customers will be more inclined to do business with a company if they perceive them to be ethically solid. According to the most recent Global Trends report from the World Economic Forum, 70% of worldwide consumers want to support businesses that align with their values. Fighting climate change and promoting equality were two of the top issues respondents noted in the study.

Another recent survey revealed that 64% of people globally believe climate change to be an immediate emergency. Consumers will naturally be drawn to brands recognizing this issue and seeking viable solutions. Any business that rejects this reality will only alienate itself from the customers it’s trying to attract.

2. It Helps You Attract and Retain Employees

Successfully hiring and retaining employees goes well beyond offering an attractive salary and benefits package. Now, prospective candidates are equally, if not more, concerned with working for organizations that share the same values as they do.

The pandemic fundamentally changed how people view their employers and where they’re prepared to commit their professional time. According to a survey conducted by the Edelman Trust in 2021, six out of 10 respondents selected a new job based on company values.

3. It Makes You More Appealing to Investors

When it comes to your bottom line, there are compelling reasons to improve your levels of social responsibility. For example, you’ll enjoy numerous tax benefits by going green, including grants for 30% alternative energy use and credits for operating hybrid or electric company vehicles.

Then there’s the sentiment of your investor community to consider: more than 70% of investors today claim a company’s environmental practices, social issues management, and governance policies (ESG) are very or somewhat important to them.

Types Of Corporate Social Responsibility

Let’s take a closer look at the different types of corporate social responsibility:

Environmental Social Responsibility

Environmental responsibility is about demonstrating responsibility and care towards the natural environment and resources. This could take the form of reducing your level of CO2 emissions, exploring renewable energy solutions, reducing paper usage, or participating in recycling programs.

Ethical Social Responsibility

Ethically responsible businesses commit to and uphold the highest standards of honesty and transparency in all their activities – with employees, investors, suppliers, and customers.

Philanthropic Social Responsibility

Philanthropic responsibility is where companies invest in uplifting society and local communities, for example, by pledging a percentage of the organization’s profits to charitable causes and non-profits.

Economic Social Responsibility

Economic responsibility is about ensuring that an organization makes all its financial decisions in a way that supports the areas mentioned above.

Leading for Good

Life is complicated, and times are hard for many working Americans. I’m not sure if any of us really recovered from the Recession of 2008 – and then the pandemic hit. And in the last year, people have exited the workforce in droves.

If employees are bringing the stress of everyday life into their jobs, what are we, as leaders, doing to alleviate that tension? While tight budgets and shareholders may not always allow us the opportunity to promote as regularly as we would like, expand benefits, or offer additional bonuses and vacation days, are there other ways to enhance morale within an organization? Beyond career growth opportunities and pay rate increases, could building security and trust within the organization and authentically operating as a socially responsible business be affordable ways to increase collaboration and organizational productivity?

Leaders of organizations, causes, or social groups have a real and difficult responsibility to the people they manage.  Our number one job is the people. The product comes second. Without people, there is no manufacturing plant, there are no managers, and there is no one to do the work within the workplace. Businesses start with a dream, a founder’s vision. The vision is based on belief. Belief is created for and held by the heart of the people. It always starts with the people.

I urge all individuals who see themselves as leaders to use their powers for good. Demonstrate corporate citizenship. Make decisions that create environments of safety and security for everyone. Leaders, you’re in a unique role to transform a culture. Use your powers wisely so that those who work for you will willingly and passionately bring your vision to life. And maybe, just maybe, these empowered individuals might also, in return, change the world.