Corporate responsibility - striking a balance between business, people, and the community
Date: Monday , October 01, 2007
At the UN Global Compact Summit earlier this year, Goldman Sachs issued a report that found companies which are considered leaders in environmental, social, and governance (ESG) policies are also leading the pack in stock performance—by an average of 25 percent.
As human beings, each one of us has an ethical responsibility to the people, communities, and environment around us. As a business made up of people, each company should also have a responsibility toward its employees, communities, and environment that it is a part of. We firmly believe that businesses have a higher purpose beyond bottom line and top line growths.
Looking around the world of businesses today, we find many organizations that do not actively focus adequate attention or take responsibility for the communities where they operate. These businesses often neglect the employees, and societal and environmental issues in their own backyard, while thinking that their sole responsibility is to provide value to the company’s investors. In my opinion, businesses operating in India should provide more tangible support for the most pressing community issues such as illiteracy, poverty, or the enhancement of the status of women (to name a few), while companies in the U.S. could help out with environmental, educational, and healthcare issues. Organizations should decide on which issues they want to support and then find ways in which they as a company, and their employees can contribute to the improvement of those areas in their respective communities. This participation might include financial aid; but it must also be an integral part of the psyche of an organization—its values and culture, including its strategy and policies. And its employees should proactively dedicate time and effort, whether as part of the business or on an individual basis, for these honorable causes within their communities.
Once the business sets its objectives and properly manages a good balance between its operations, employees, and the community, the organization will notice an impact and see profitable growth in its business as well. For instance, a survey conducted for the 1999 Cone/Roper Cause Trends Report revealed that 76 percent of consumers indicated they would switch brands or retailers to one associated with a good cause, when price and quality are equal, while 87 percent of employees at companies with philanthropic programs feel a stronger sense of loyalty to their employer. This same attitude holds true today.
Timberland and SAS are two good examples of companies that foster values and objectives beyond that of just business growth. Not only have these companies won numerous awards for their community involvement and employee care, they also boast a loyal employee base and lower than average attrition. At UST Global, our experience is similar.
Company culture and values
UST Global was founded on the core values of integrity, humility, and humanity. According to our late Founder Chairman, GA Menon, our values and culture are our guideposts. The company’s internal tag line is ”Transforming Lives” of people inside the company and in the communities in which we operate. This humane mission has created a dedicated and highly motivated team of more than 5,500 associates.
An example of employee empowerment that has grown from this philosophy is the company’s “Colors” initiative that comprises of seven socially relevant themes, with each group named after a different color. Every associate is welcome to join and participate in one of these groups whose objectives range from helping with the growth of the company to making a positive impact in their local communities. Among other things, employees are evaluated in their annual appraisals on their achievements within these volunteer social activities in addition to their core business responsibilities.
The community initiatives we have created at UST Global actively engage our associates in every location where we have a major presence. Under the UST Global banner, initiatives in India include a host of social and charitable activities such as adopting and sponsoring public school initiatives, donating computers and the maintenance of the IT infrastructure in educational institutions, sponsorship of gifted students, and volunteer work at hospitals, orphanages and charitable homes. Similarly, associates in the U.S. participate in blood donation drives and volunteer services at schools and hospitals.
The company’s client-centric global delivery model is another aspect based on a relentless focus on values and culture. We team the best local skills available at, or near, the client location with the best offshore resources to derive the most value for our clients. While this provides obvious benefits and value to our clients, it also serves to transform what has traditionally been a client-vendor relationship into a long-term strategic partnership. Associates also benefit as this model exposes them to a wider range of projects than they would normally work on. Moreover, the community benefits as the model caters to and supports local employment.
The benefits to the business are significant as the business is able to attract associates of much higher caliber who tend to have a greater level of motivation. The associates have a strong sense of belonging and are able to actively provide value to their communities. The corporate mission of giving along with employee empowerment helps in attracting and retaining passionate and like-minded associates with a common purpose. It improves internal communication and interaction while reducing hiring-related costs. Our company enjoys an enhanced reputation and goodwill in the community that in turn increases our name recognition and positively influences the company’s brand. As a result, a healthier, better educated, and well-knit community is created over the long term. This is certainly what we have experienced and realized at UST Global.
The biggest reward, however, is the sense of fulfillment achieved when one honors one’s obligations toward the community at large and takes responsibility within a traditional business setting that is focused on bottom line and top line growths to play a proactive role in transforming the world to create a more humane and enriched environment.
The author is Chairman & CEO, UST Global