The Role of ‘High Potentials’ in Integrating and Implementing Corporate Social Responsibility

Abstract

The Samenleving and Bedrijf (S&B) network of Dutch organizations seeks to embed corporate social responsibility (CSR) within business practices but faces challenges with regard to how to do so across various organizational practices, processes, and policies. The integration of CSR demands cultural change driven by senior management and other change agents, who push CSR principles throughout the organization. This study examines the change processes that S&B member organizations have initiated, with a particular focus on the role of high potentials—those persons who have been selected for the fast track into senior management. Interviews with nine S&B organizations document their levels of CSR integration and implementation, the role of senior managers, and the effects of high potentials’ competencies on the realignment process. High potentials have the ability and opportunity to act as CSR change agents, but organizations’ expectations of their purposes as future senior managers prevented them from doing so. In the existing organizational cultures, leadership focused on economic success, and the CSR implementation process had just initiated. Therefore, a measure of CSR embeddedness might refer to the performance measurement and expectations of high potentials as potential CSR change agents.

Appendix

Case 1: ABN AMRO

International bank with 4,500 branches in 53 countries, employing 110,000, with assets of 999 billion Euros, focused on consumer and commercial clients and globally on select multinational corporations, financial institutions, and private clients.

Mission, Strategy, and Values

“To create maximum economic value for our shareholders through a constant relationship focus on the financial services needs of our chosen client segments and a strict adherence to our financial targets. We are operating in three principal customer segments, whereby the objective is to maximize the value of each of these businesses as well as the synergies between them. Excellence of service to our clients and leadership in our chosen markets are of paramount importance to our long-term success.” (ABN AMRO Corporate Website)

Corporate Values

Integrity: teamwork: respect: and professionalism, underpin businesses principles to guide and evaluate employees and define what the bank stands for: we are the heart of our organization: pursue excellence; aim to maximize long-term shareholder value; manage risk prudently and professionally; strive to provide excellent service; build our business on confidentiality; assess business partners on their standards; a responsible institution and a good corporate citizen; respect human rights and the environment; accountable for our actions and open about them. Collectively seen as essential to achieving mission and used to develop policies and procedures.

Corporate Social Responsibility

“To live our Corporate Values and Business Principles and to meet the needs of the organization and our stakeholders, thus seeking to protect, sustain and enhance human, natural and financial capital needed in the future.” To “be committed to continuously improving the integration of sustainability into our working environment and business processes. Our aim is to play a proactive role in contributing to sustainability, within our spheres of influence. We are committed to accountability and transparency in our sustainability performance.” (ABN AMRO Sustainability Report 2006)

Fulfilling its values and principles enables it to meet organization and stakeholders needs to protect, sustain and improve human, natural, and financial capital and achieve sustainable growth. CSR strategy based on six principles: (1) Being accountable and transparent, (2) Protecting the assets, (3) Providing responsible financial services, (4) Being an employer of choice, (5) Supporting local communities, (6) Minimizing impact on the environment.

Corporate Social Responsibility and High Potentials CSR Implementation

Stimulates all employees to consider and be involved in CSR; high potentials can spend 1 week of their working hours a year on volunteer work. High potentials are not tasked with CSR implementation.

Competences

High potentials’ competencies relate to the key values of the company (integrity, teamwork, respect, and professionalism). Plus initiative, courage and risk taking, commercial drive, result focus and ambition, problem analysis and judgment. This competence profile is relatively constant but improved regularly. Trainees evaluated on the key values and competences and aspects of CSR inherent in these, but specific CSR evaluation not undertaken.

Case 2: ING Bank

Leading global financial services company; interests in banking, insurance, and asset management services; employing 120,000 worldwide whose customers are individuals, families, small businesses, large corporations, institutions, and governments.

Mission, Strategy, and Values

“We strive to deliver our financial products and services in the way our customers expect: with exemplary service, maximum convenience and at competitive rates. This is reflected in our mission statement: to set the standard in helping our customers manage their financial future.” (ING Annual Report 2006)

Corporate Values

ING’s management structure follows the principles of transparency, accountability, and client focus. Its strategy seeks the following: a clear financial objective; a clear strategy; customer satisfaction; managing costs; managing risks; managing reputation; growth; a performance culture, used to generate business principles which serve to guide employees: committed to our integrity; aim for an above average return; open and clear; promote sustainable development and respect human rights; we respect each other; involved in the communities we operate in (ING Corporate Website).

Corporate Social Responsibility

Corporate values determine role in society: to maintain stakeholder’s confidence by acting with professionalism and integrity. ING has been involved in CSR for a number of years and is structuring is CSR policies. A CSR department was established with CSR parameters defined by the board which see it as a strategic issue based on: entrepreneurship; sustainability as a quality characteristic; success for entrepreneurs. Internally focused on awareness; defining CSR, what is going on in society and how ING can respond? Employees are aware they can contribute to CSR, reinforced through training.

Corporate Social Responsibility and High Potentials CSR Implementation

All employees learn the business principles through induction and courses on compliance. Groups targeted as able to further CSR receive additional instruction and guidelines to encourage open discussion. High potentials undertook round-table sessions to gain insights as what they want, and think is important, to connect them with CSR. High potentials are considered important for future CSR implementation. Awareness of CSR has been established, ongoing challenge is structurally embed it within development programs.

Competences

Its leadership profile describes behaviors required in current and future leaders used to measure high potentials, assess general managers, develop the ING Business school curriculum and recruit the right people (1) create shared vision and strategy; (2) drive for result with integrity and compliant behavior; (3) focus on customer; (4) build, engage and empower high performing teams; (5) embrace and drive for change; (6) entrepreneurship (ING Career Website).

Case 3: Deloitte Netherlands

Mission, Strategy, and Values

“Deliver measurable value to our clients through a global network of diverse professionals who bring unmatched depth and breadth of expertise.” (Deloitte, Annual Report 2005–2006)

Achieved through “Corporate Understandings,” which demonstrate strategic direction focus on: leadership; quality; teamwork, and client relationships with associated values and standards of excellence.

Corporate Values

Complimentary to strategy, globally shared values were developed that apply to all employees: integrity; outstanding value to markets and clients; commitment to each other; strength from cultural diversity. These form the business code of conduct for all employees focused on public confidence, client and mutual obligations (Deloitte Corporate Website).

Corporate Social Responsibility

“A form of entrepreneurship based on creating value for our clients, our people and other stakeholders through allocation of human and intellectual capital allowing us to make an actively positive contribution to society and reduce our impact on the environment in a commercially responsible manner.” (Deloitte Stakeholder Report 2005–2006).

In 2006 Deloitte Netherlands’ strategic plan placed sustainable growth alongside operational excellence as a top priority. CSR policies are based on nine values and ethical principles: honesty and integrity; professional behavior; competence: objectivity; confidentiality; fair business practices; responsibility to society; respect and fair treatment: responsible decision-making. CSR strategy focuses on five strategic themes: integrity; employees; member of society; outstanding values for clients; ecological footprint. Deloitte was first of the big four financial service providers in the Netherlands to publish a Corporate Responsibility report and set sustainability goals for 2006–2008. Deloitte wants the role of CSR thought leader, to influence society as a whole and be an example for others and apply their knowledge and CSR experience (Deloitte Stakeholder Report 2005–2006).

Corporate Social Responsibility and High Potentials CSR Implementation

CSR implementation involves young people who conducted the zero assessment to define CSR undertaken, because they had various functions, work in a range of departments and locations. This group formed the basis for further CSR implementation and are seen as important because they can encourage CSR adoption.

Competences

High potential competences required are entrepreneurship, excellent service, commercial skills, leadership effectiveness and effective management, plus to possess professional qualities and social skills. Entrepreneurship is CSR strategy theme which links these.

Case 4: KPMG Netherlands

A Dutch company and a member firm of the KPMG network, providing services in Audit, Tax, and Advisory. KPMG has an annual turnover of about 634 million Euros, employing 4000 employees in the Netherlands (KPMG Website the Netherlands).

Mission, Strategy, and Values

“Outstanding professionals working together to deliver value. We offer Audit, Tax and Advisory services. Three complementary areas of knowledge and insight that enable us to meet the needs of our clients. We turn knowledge into value for the benefit of our clients, our people and the capital markets.” (KPMG Annual Report 2005)

Strategy based on four principles: quality and integrity; knowledge and experience; multidisciplinary; the best people.

Corporate Values

KPMG globally formulated corporate values: act with integrity; work together; respect the individual; seek the facts and provide insight; open and honest in our communication; we are committed to our communities; lead by example. Employees trained to work with these values to guide them in the decisions, considerations and judgments they make that cannot easily classified in training, handbooks or procedures.

Corporate Social Responsibility

“CSR sought through four strategic pillars: (1) Translating and embedding CSR values and principles into business processes and procedures. (2) Decrease effect on the environment, reducing ecological footprint. (3) Invest in Dutch society, focusing on social inclusion, specifically the vulnerable, deprived young, disabled and elderly that are socially isolated. (4) Stakeholder consultation and corporate responsibility reporting. These were created after a broad consultation with internal and external CSR stakeholders which also resulted in the appointment of a CSR director and department.” (KPMG Annual Report 2006).

Corporate Social Responsibility and High Potentials CSR Implementation

CSR not corporately structurally implemented. Aspects such as a professional code (integrity driven), values and community investment are well developed and embedded. It directors are attentive to CSR, but struggle to show leadership because finding the right themes and to understand the sense of urgency of certain issues is challenging. Organizational culture means CSR is not imposed on individuals who are considered to value traditional work practices.

Competences

CSR competences are: problem solving; commercial focus; integrity; team work; lead others; build effective relationships; learn from experience; desire to achieve; passionate about client service; proactive. All employees through their annual plan agree how they will fulfill each competency and are measured on this. The plan should include a CSR element as “extra functions” i.e., what they will do in their work for society, this does not form part of their performance evaluation.

Case 5: IBM Netherlands

Globally largest information and communication technology company with 300.000 employees in 160 countries and annual revenue of 90 billion dollars. World leader in middleware and second-largest software company overall. Market leader in information management software, application integration, middleware categories, IT services, consulting and server sales (IBM Annual Report 2005).

Mission, Strategy, and Values

“At IBM, we strive to lead in the invention, development and manufacture of the industry’s most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide.”

IBM seeks to be a partner in its clients’ success by enabling their capacity to innovate, so that they may differentiate themselves for competitive advantage in a global economy. IBM views enterprise innovation in terms of products and services, and across all dimensions of its business: processes, model, management systems, culture and role in society.

Corporate Values

“The IBM values, formed in conjunction with employees, provide the basis for everything employees do: dedication to every client’s success; innovation that matters, for our company and world; trust and personal responsibility in all relationships. Values enable organizations to manage themselves in a world where hierarchical controls and rule books no longer work.” (IBM Corporate Website).

Corporate Social Responsibility

IBM has a long CSR footprint e.g., led on workplace safety before first formal policy was issued in 1967 and established a corporate policy on environmental protection in 1971. CSR strategy: employees; environment; community involvement; supply chain responsibility; governance and compliance (IBM Corporate Responsibility Report 2006). To identify its workforce CSR orientation, IBM launched an intranet site that employees could post examples of social engagement activities. Employee’s engagement was encouraged through financial donation to the CSR activity triggered when they undertook 40 h plus on such activities.

Corporate Social Responsibility and High Potentials CSR Implementation

“All new employees including high potentials participate in induction, CSR is part of this. The CSR department does not focus on high potentials, instead focused on convincing current leaders to support CSR. The next step is to work with high potentials as future leaders to gain long term support.”

Competences

High potential competences realigned to fit new company values: earning peoples trust being trust worthy and acting accordingly are considered as basic behaviors a person should possess. CSR was indirectly involved in the development of the new set of competencies because they reflected IBM’s values.

Case 6: LogicaCMG Netherlands

Leading international information technology (IT) services-company, providing management and IT consultancy, systems development and integration, outsourced management of targeted business processes across diverse markets. In the Netherlands, focused on consultancy with about 6000 employees (LogicaCMG Website the Netherlands).

Mission, Strategy, and Values

“To help leading organisations worldwide achieve their business objectives through the innovative delivery of information technology and business process solutions”

“Its strategy is to be a provider of international services with local attention: acting as a bridge between business and ICT: and viewing the customer as central, enshrined in the view that when the customer is successful, LogicaCMG and her employees are successful. The company strives for long lasting and intensive customer relationships.”

Corporate Principles

LogicaCMG, merged with Unilog and WM-data, which all had recognized reputation and ability to successfully deliver to customers due to the quality of their people. Building on the shared legacy of people focused values one set of values and one set of systems and processes were created: openness, communication and involvement; mutual respect, fairness, integrity and meritocracy; professionalism and quality; recruiting the best people and releasing their potential; loyalty; client focus and teamwork. These principles define the way LogicaCMG and its employees do business. (LogicaCMG Annual Report 2006).

Corporate Social Responsibility

Good standards of corporate responsibility are inherent to its business principles. The company established policies which reflect the company’s ethos and attitude toward its employees, customers, other stakeholders and the community in general. CSR is brought into the workplace through partnership with UNICEF to provide education for all children by 2015. The Bloom program involves employees fundraising and free delivery of manpower, ICT knowledge to school related projects in developing countries. Every division has one manager who promotes the program. All employees chose to participate or not in Bloom. The company within the S&B network shares CSR practice to further its development. It is early on in its CSR orientation but sees CSR as becoming a future strategic focus.

Corporate Social Responsibility and High Potentials CSR Implementation

CSR orientation currently is to people and identified to a limited extent in Human Resource policies because it is only part of the company’s agenda. High potentials, just like other employees are confronted with Bloom during a 2 day introduction. The first day is focused on their business unit. The second day all new employees come together to receive presentations, discussions etc. on social involvement. High potentials are currently not considered important for CSR implementation.

Case 7: KPN

KPN is leading Dutch Telecommunication Company providing telephone, internet, and television services to personal customers through its fixed network in the Netherlands and a range of services, from voice, internet, and data services to full managed outsourced ICT solutions to business customers and mobile services in Western Europe and employees 29.000 (KPN Corporate Website).

Mission, Strategy, and Values

“We are committed to providing a portfolio of modern, high quality telecommunications services to our customers. We want to help our customers to achieve their goals and to enrich their lives, whether for business or pleasure.” (KPN Corporate Website).

KPN strategic challenged to develop new services while keeping leadership in “old” markets by: having lowest cost infrastructure; open access infrastructure; providing new for old; new services for consumers: and new services for businesses. KPN believes a society of satisfied customers forms the basis for profitable growth and subsequently shareholder value. Quality and customer satisfaction are realized through motivated employees. Conscious of their responsibilities to the wider community, they contribute through their use of knowledge and technology to all stakeholder well-being, and account to them for their environmental performance (KPN Sustainability Report 2005).

Corporate Values

Its Code of Conduct sets out the standards and values of the company and describes how employees are expected to conduct business: personal; trust; simplicity.

Corporate Social Responsibility

‘The products and services of KPN contribute to the improvement of the quality of life. KPN makes it possible to communicate independent of time and place and connects people.’

CSR strategy builds on: (1) Sustainable business, includes ethics, environment and social policy. (2) Social involvement, based on socially responsible initiatives related to products and services e.g. ‘My Child Online’ foundation which contributes to more responsible use of new media by young people. (3) Personal involvement, how employees and KPN work with society to resolve social issue. All this is moderated by KPN’s focus to recover financially after spending considerably in 2001 on acquisitions and mobile internet licenses which almost led to company failure. CSR is important but it a lesser priority than economic well being.

Corporate Social Responsibility and High Potentials CSR Implementation

All employees including high potentials are confronted with the company code of conduct which has inbuilt CSR elements Although high potentials are not included structurally in CSR it is recognized as future leaders they may become important because they are considered to have different views and values to current leaders.

Competences

Core competences expected of current and future leaders are: priority; customer; team; influence; result; and change. These competences are not specifically linked to CSR.

Case 8: Siemens Netherlands

Siemens Netherlands is part of Siemens AG, with turnover of all Siemens companies in the Netherlands around 1.5 million Euros in 2006. With a workforce of 3,188 Siemens Group is one of the leading companies in electrical engineering (Siemens Website the Netherlands).

Mission, Strategy, and Values

“Siemens is a global network of innovation. This worldwide network is formed by people that want to apply their knowledge on electrical engineering and electronics to give their customers a competitive advantage. Siemens employees learn continuously and work closely together with each other and with partners. They are energetic, without loosing the social importance out of sight and are proud to contribute to the success of the organization.” (Siemens Website the Netherlands).

To fulfill its mission its strategy is based on the following: translate urbanization and demographic changes in growing opportunities: market leader position; and Fit4More delivered through performance & portfolio, continuous adjustment and innovation, operational excellence, the best processes, people excellence, involvement as a basis for success and corporate responsibility, active for people and society (Siemens Website the Netherlands).

Corporate Principles

Corporate Principles were defined globally and establish standards of integrity for all employees and values for all business activities. Corporate Principles are: strengthen our customers to keep them competitive; push innovation to shape the future; enhance company value to open up new opportunities; empower our people to achieve world-class performance; embrace corporate responsibility to advance society (Siemens Corporate Website).

Corporate Social Responsibility

Corporate Citizenship is embedded in business activities and is committed to a strategy that generates profit and growth while contributing to the well-being of people and the planet. CSR strategy is focused on people, employees, customers and society, working conditions, labor agreements, sustainable products and services and community investment. For the environment the company mainly complies with the rules and regulations. CSR implementation is considered to be efficient. (Siemens Annual Report 2006).

Corporate Social Responsibility and High Potentials CSR Implementation

With a clear CSR strategy it seeks to develop current CSR policies further, and identify new projects. High potentials are not targeted to be involved in CSR implementation though they are considered influential. All new employees participate in induction which includes CSR.

Competences

Competence framework based on: knowledge, experience and behavior, divided in five themes that represent several competences: (1) Edge: Creativity, entrepreneurship, Autonomy, and Strategic vision and risk management. (2) Energy: Initiative, Willingness to change, Learning capacity, and Professionalism. (3) Energize: Communication skills, Networking, Coaching and Mentoring, and Team player. (4) Execute: Analytical capacity, Decision making ability, and Result and Quality focus. (5) Passion: Customer focus, Integrity, and Siemens Values.

Case 9: TNT Post

TNT Post, part of a global provider of mail, express and logistic services. In the Netherlands TNT Post is the market leader in addressed and non-addressed mail. Globally TNT Post has about 80.000 employees of which 40.000 work in the Netherlands. In 2004 the turnover of TNT Post was 3.9 billion Euros (TNT Corporate Website).

Mission, Strategy, and Values

“Exceed our customers’ expectations in transferring their goods and documents around the world. We deliver value to our clients by providing the most reliable and efficient solutions through delivery networks. We lead the industry by: Instilling pride in our people; creating value for our shareholders; and sharing responsibility for our world. (TNT Social Responsibility Report 2006).”

Corporate Principles

Living consistently by TNT Business Principles cements the company’s culture. Business operated according to four guiding principles containing seventeen statements: (1) Principles that guide the company; (2) Principles that guide the employees; (3) Principles that guide the business; (4) Principles that guide the relationship with the world (TNT Corporate Website).

Corporate Social Responsibility

TNT strives to improve its social and environmental impact on communities. To help people realize potential and meet the needs of the current generation without producing a poorer world. The CSR focus is: stakeholders’ expectations; core business and accompanying sector-specific issues; competitors’ KPI’s/target areas, enabling the outside world to compare TNT’s performance with that of its competitors; strategy and mission; the Dow Jones Sustainability Group Index.

Corporate Social Responsibility and High Potentials CSR Implementation

CSR implementation requires employee’s awareness which starts with induction program. The goal of this induction is to make employees aware that in their work they should not only focus on profit, but also on people and planet and that CSR has to become part of every project they are involved in. High potentials can take part in the regular CSR activities that are available for everyone. Young TNT, a union of young employees, regularly has CSR initiatives.

Competences

TNT competence framework does not differentiate between current and future leaders: (1) Key competences-manage with the heart, build on promise, trust others to deliver, action and taking decisions, open for possibilities. (2) Transactional competences-awareness of business and market, customer focused, team work, deliver value, strategic thinking, learning. (3) Basic skills-effective communication, planning, functional knowledge. High potentials should possess or develop these competences and are evaluated on these. TNT wants new employees to have affinity for CSR. No specific competences are directly linked to CSR, performance against CSR criteria not undertaken.

Company Reports

• ABN AMRO Annual report 2006

• Deloitte Netherlands Annual report 2005–2006

• Deloitte Netherlands Stakeholder Report 2005–2006

• IBM Annual Report 2005

• IBM Corporate Responsibility Report 2006

• ING Bank Annual Report 2005

• ING Group Corporate Responsibility Report 2006

• KPMG Netherlands Annual report 2005

• KPN Sustainability Report 2006

• LogicaCMG Annual Report 2006

• Siemens Netherlands Annual Report 2006

• TNT Group Social Responsibility report 2006

Websites

• ABN AMRO Corporate website, www.abnamro.com, last accessed May 15, 2007

• IBM Corporate website www.ibm.com, last accessed May 18, 2007

• ING Career website, www.ing.jobs/careers/, last accessed on May 22, 2007

• ING Group Corporate website, www.ing.com, last accessed May 22, 2007

• KPMG Netherlands website, www.kpmg.nl, last accessed May 18, 2007

• KPN Corporate Website www.kpn.com, last accessed May 18, 2007

• LogicaCMG Netherlands website, www.logicacmg.nl, last accessed May 18, 2007

• Samenleving & Bedrijf Website, www.samen.nl, last accessed March 19, 2007

• TNT Group Corporate website, www.tnt.com, last accessed May 18, 2007