Among other reasons, your customers are watching.
Given the choice, would you prefer buying a product or service from a company known for achieving high standards of corporate accountability?
When economic pressures are severe and highly unstable, some people might think that employers shouldn’t be held to the fire. I disagree. As an organizational development professional, I strongly encourage employers to maintain an image that reflects high standards of corporate accountability. I am certain that most people, including customers and stakeholders, have high expectations of companies; and they are paying close attention, regardless of the economic climate.
Business studies are also substantiating this view. For instance, the IBM Global CEO Study: The Enterprise of the Future, announced in May 2008, revealed that “customers are swapping passive roles for much deeper involvement,” and, furthermore, according to an IBM press release Web page:
“CEOs point specifically to their own customer base as the source of the most important changes they will have to address, as two new and more demanding classes of customers emerged: the ‘information omnivore’, and the ‘socially-minded’ customer. Of all the trends identified in the study, surveyed CEOs plan their most substantial increases in investment in response to these customer sets.”
I agree, and I think it is very important that organizations develop and maintain a culture of corporate accountability. As indicated above, this is not only a wise approach to take for business survival and growth reasons, but it is also the responsible thing to do.
What is corporate accountability?
Generally, corporate accountability speaks to the moral and legal obligations that companies should fulfill for either legal or social reasons. These obligations are met through maintaining relationships with stakeholders—who can include numerous groups of people such as: shareholders, employees, customers, vendors and suppliers. And we can see these obligations measured by significantly populated areas, as well; for instance, local communities and other regions of the world that the company operates in.
Every week I plug into a lot of different resources in order to stay in touch with economic news and issues. I browse the Internet or pick up the latest issues of The Economist, The Wall Street Journal and the Financial Times.
As I research and study companies that tend to remain healthier than most, I notice they are usually the ones who operate by transparency. What do I mean by that? In my view, a transparent organization is one that is open and accountable.
How human resources (HR) can help.
A transparent organization, again, one that is open and accountable, requires awareness, participation and leadership—i.e., a strategy. HR professionals have the training, background and knowledge to help lead organizations in this area. From a human capital point of view, HR professionals have not only the necessary skill-set, but they also have the mindset for (1) seeing issues from employees’ perspectives; and (2) linking employers to their communities.
I think that businesses sometimes fail to recognize the impact they have on employees, their families and their communities. Employers have employees who arrive at work every day. These employees come into our offices, factories, shops, restaurants, etc.—they get paid for what they do—and, they go back into their communities.
Nonetheless, employers impact how they take care of them; they impact their lives both emotionally and physically, especially if health plans are offered to them and their families. In many communities, employers have a massive impact in areas such as influencing the environment, tax bases, etc.
Again, it’s important that employers develop and maintain a culture of corporate accountability. Employers cannot accomplish this alone and they do not have to. They can work in concert with HR and their employees to ensure that corporate accountability is a part of everyone’s mindset. As a result, your customers are more likely to remain loyal and supportive; and you are more likely to attract and retain top talent for your organization.
In future HRTools Insights, I will cover the topic of corporate accountability in more depth and reveal a few common mistakes that employers can avoid making.