Corporate Social Responsibility and Business Performance Reporting
Live from the World Economic Forum Content analysis has been used to assess whether business performances described in the annual reports of 137 multinational companies make convincing arguments and find an echo in opinion-leading news media. Research presented today at the World Economic Forum in Davos, Switzerland looked at more than 120,000 statements from 2011 annual reports. Overall, companies were cautious in the tone of content, negativity was almost non-existent, and risks were mentioned only when it was unavoidable. Even positive statements were included on a fairly limited basis, typically less than 10 percent of the total content. This contrasted with coverage from 28 leading international TV news channels that were clearly negative on almost all topics, including image, stock price, production, human resources, and management. In other words, TV news essentially ignores corporate performance assessments—except when it comes to financial results. Companies are therefore not making a convincing case about who they are and how they operate in their annual reports. TV news media are forming their own opinions, and the lack of clarity on successes, failures, and risks in these reports has led to a situation where the media feels free to ignore these documents that could be central to corporate image building.
Specificity and Credibility Annual reports talk about the topics that companies feel are important, and CSR activities typically only represent 5–10 percent of the total content. Specificity in annual reports is also a real challenge for many companies. CSR performance is a good example: companies were rarely specific as to where their CSR activity even occurred. Clearly, this lack of specificity impacts the credibility and level of transparency of the initiative. When location was specific, it was predominantly in the home country. While CSR activities in the home market are key and can be drivers for growth, this is the era of globalization—indeed the majority of economic growth is currently concentrated in emerging nations—and many stakeholders, in particular local stakeholders, want to know about CSR activities in developing markets.
Globalization and CSR Importance CSR is a new and advanced approach to assess the vitality of companies and is becoming increasingly relevant for the in-depth evaluation of investment and development opportunities. This is of paramount importance because investors faced with the uncertain evolution of the global financial crisis are now looking to evaluate not only the short term financial performance of companies, but also their real viability—in other words, their ability to grow in the context of new challenges and manage new risks generated by a fast changing world. The research presented today suggests that many multinational firms are missing out on a real opportunity to engage their stakeholders in a transparent and meaningful dialogue and, by default, are leaving it to others to tell their stories with all the risks that this inevitably entails. Wdesk provides companies with a complete CSR reporting solution to take advantage of the opportunity to streamline and optimize their CSR report creation, production, and publishing processes. Reporting teams can collaboratively assemble, draft, and review CSR reports, while complying with regulations, reporting requirements, and best practices with ease. CSR reports can be published to multiple internal and external stakeholders confidently and securely. The Wdesk revolutionary collaboration application delivers the only complete, fully-integrated platform dedicated to meeting your Corporate Social Responsibility reporting needs. Reference: Transition towards a truly global scenario: Challenging elite opinion. Reputation Lab Davos, January 23, 2013.
About the Author
Liv Watson is Senior Director of Strategic Customer Initiatives at Workiva, with a primary focus on monitoring and evaluating new market opportunities globally. She helped found XBRL International and is one of the original developers for XBRL.