Protection of Assets:
- Long term business sustainability
- Risk management
- Early compliance with regulatory standards
- Inclusion in ethical investment funds
Companies are increasingly looking at community investment as a key contributor to long-term business sustainability. As 75% of companies surveyed in 'Corporate Community Involvement' indicated, sustainability is clearly aligned with the long-term commercial viability of a business. It is the key for maintaining community and stakeholder trust, support and legitimacy .
Where compliance and regulatory standards are required of an industry, social investment can assist with compliance strategies and government relations. Open lines of communication with the broader community allow for early alerts to potential disputes and enables early compliance with existing and potential regulations. This facilitates proactive management of risk.
The increase in socially responsible investment funds is becoming a considerable driver for community involvement. These funds screen organisations according to their community impact. Organisations that are actively involved in the broader community are likely to be favoured by these funds.
Employee Relations:
- Recognition as employer of choice
- Employee training
- Increased staff morale
To attract and retain good staff, many businesses are seeking to be recognised as 'employers of choice.' A proactive engagement with the broader community ensures staff (and potential staff) view the business as a socially responsible organisation that they would be proud to work for.
In addition to staff motivation, loyalty and retention, community involvement also offers the organisation opportunities for staff training and development and the chance to work more closely with their communities.
Box 1
Telstra's partnership with the Bionic Ear Institute is a good example of an outcome-rich collaboration between a major commercial organisation and a not for profit medical research organisation. This partnership has combined the Institute's world leading understanding of the way the brain perceives speech with the telecommunications expertise of staff at Telstra Research Laboratories.
The partnership provides the Institute with access to additional research expertise and funds as well as the potential to benefit from the exploitation of new developments through Telstra's strategic partners. For Telstra it is an opportunity to improve automatic speech recognition systems, which could play a major part in the company's future, and to demonstrate publicly that it is an organisation willing to contribute to the community beyond its direct interests.
Reputation:
- Increase in brand recognition
- Improved ties with customers, suppliers and government agencies
- Reputation within local community
- Increased media opportunities
- Improved access to key markets
Corporate community involvement is recognised as facilitating corporate image enhancement, brand recognition and brand reputation. In fact, 71% of companies surveyed in an American research project identified corporate image as being the prime benefit from their community investments.
Community investment offers business the opportunity to demonstrate commitment to societal goals to a wide variety of stakeholders, including customers, suppliers, government, and other community groups. Recognition and acknowledgement of this commitment affects risk management issues, relations with customers and suppliers, customer satisfaction and, again, employee satisfaction.
Community activities also provide an opportunity for creative and powerful marketing and public relations programs and may give access to media and markets inaccessible through regular business practices.
The following definitions of 'partnership' demonstrate the variety of attributes which a community business partnership may have.
'People and organisations from some combination of public, business and civil constituencies who engage in voluntary, mutually beneficial, innovative relationships to address common societal aims through combining their resources and competencies.' The Copenhagen Centre
'Three or more organisations-representing the public, private and voluntary sector-acting together by contributing their diverse resources to pursue a common vision with clearly defined goals and objectives. The objective of a partnership should be to deliver more than the sum of the individual parts.' The Ashridge Centre for Business and Society
'A cross-sector alliance in which individuals, groups or organisations agree to: Work together to fulfil an obligation or undertake a specific task; share the risks as well as the benefits; and review the relationship regularly, revising their agreement as necessary.' The Prince of Wales Business Leaders Forum, From the Copenhagen Centre website: www.copenhagencentre.org