Business

Sunday MBA

What should a corporate responsibility office do?

Sunday MBA provides ideas on running better businesses and succeeding in the modern workplace, this week from MIT Sloan Management Review.

Alberto Andreu Pinillos has been global head of Organizational Development and Corporate Culture at the Spanish telecom giant Telefónica since 2014. For 14 years prior, he was Telefónica’s director of reputation and corporate responsibility and a pioneer in the business sustainability movement.

“Ever since I started with this whole corporate responsibility thing,” says Andreu, “a lot of people have asked me: What do you do? What’s your job actually about?” He distills the job into three principal activities and responsibilities: foresight, nurturing, and evangelism.

Foresight

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The director’s responsibility here is to identify the social and environmental risks or opportunities that may not be relevant in the near term, but will be in the medium to long term — and then place them in front of the appropriate decision makers. The corporate social responsibility manager, by engaging with stakeholders in government, industry, civil society, and international organizations, captures valuable information about emerging social and environmental issues.

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By placing those issues into context and relating them to the business, corporate responsibility directors make them accessible to decision makers. “For example, 10 years ago very few executives were aware of the social and environmental issues involved in the supply chain,” notes Andreu. He points to the Bangladesh textile factory collapse in 2013 that killed more than 1,000 workers and tripped up brands like Benetton and Mango that were outsourcing to the contractors.

Likewise, diversity has recently been incorporated into the legal framework of national laws and European directives. Effective corporate social responsibility directors helped guide human resources executives in addressing these concerns in advance of regulations.

Thus, the director acts as a “social radar,” detecting emerging issues, understanding their potential importance to the company and communicating any concerns in the language of executives they need to influence.

Nurturing

Just as there are incubators for startups, Andreu says the corporate responsibility office needs to act as an incubator for internal projects. The office must work with other functional areas to bring about the needed improvements in social and environmental performance.

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Let’s imagine a company is operating in Europe. The previous example of diversity is one that has been identified as a priority subject by the company’s corporate responsibility office, and the director initially takes the lead on moving the company toward compliance — but after incubation, this issue is now is a matter dealt with primarily by the human resources department.

The challenge lies in ensuring that the transition from one team to the next happens at the right time. “The problem is that [managers] get confused in one of two ways: Either releasing projects before they’re ready or holding on to them for too long,” says Andreu. “You can’t make a mistake when it comes time to let your “children” leave home . . . neither too soon, nor too late.”

Evangelism

In the long run, what is the purpose of a corporate responsibility office? To bring the company into a more sustainable mindset, to spread the word about sustainability. But there should also come a time when the word is thoroughly spread. As Andreu puts it, “The true test of a responsible company is when all functions and departments are capable of minimizing their own negative impacts and are thinking about making a positive impact on their community.”

There are a number of functions that make sense to have in the corporate social responsibility office such as environmental reporting and relationships with global and local nonprofits. But in the long run, all this may be a temporary state of affairs, says Andreu. To be truly successful, corporate responsibility directors should be putting themselves out of business.

This article is adapted from “What Does a Corporate Responsibility Manager Do?” by Gregory Unruh, Arison Group endowed professor at George Mason University. Copyright 2015 MIT Sloan Management Review.