What is Social Responsibility?
Social responsibility is the theory that a business should focus on their societal impact as much as their value to shareholders. The idea here is that businesses have a responsibility to act in a manner that benefits the rest of society. The International Organization for Standardization (ISO) posits that a business’s ability to balance economic performance with societal and environmental issues is critical in efficient and effective operations.
Why Does it Matter?
An important idiom to remember in the business world comes from a classic song: the times they are a-changin’. Investors are more likely these days to factor in a company’s commitments to socially-responsible policies. These can include but are not limited to philanthropy (the donation of money, time, or resources to a specific cause), respecting and abiding by environmental regulations (such as limiting pollution or “going green”), or focusing on equal-opportunity hiring practices. People are just more interested in companies that are out there doing something for the world.
Running a socially responsible company or business has an effect on the bottom line, too. Engaging in socially responsible practices drives more investor attention, which in turn increases shareholder value. It’s an added kick that being socially responsible also makes you (and your employees) feel good about where they work and what they do for the world. In a larger sense, being socially responsible also protects future generations that might one day be investors, customers, or employees.
There are loads to ways to demonstrate your commitment to social responsibility, but it’s important to appear (and be) genuine when doing so. In general, people have a tendency to shy away from businesses that are only adhering to socially responsible guidelines because they’re mandated by regulation to do so. The best thing to do is look for causes in the communities in which your company works and find where your money, time, or resources can be best allocated. Local or smaller communities typically don’t receive the same kind of aid and attention they need from larger-minded federal programs. Working locally can mean your business gets tons of local attention and support.
That’s really all there is to it. Find causes that matter to you and, if you can, keep them local. Adhere to socially responsible practices that will make you and your employees feel better, demonstrate your commitment to social responsibility, and get positive and lasting attention to your company.