designing a csr structure (fra bsr)

Prepared by the Staff of Business for Social Responsibility

Bus ine s s f o r So c i a l R e spons i b i l i t y

Designing a CSR Structure

A step-by-step guide including leadership examples

and decision-making tools

Business for Social Responsibility (BSR) is a global nonprofitorganization that partners with member companies to achieve commercialsuccess in ways that respect ethical values, people, communities and theenvironment. Advancing the worldwide adoption of business practicesthat build a more just society and sustainable economy, BSR providesinformation resources, advisory services, networking and collaborativeopportunities to make corporate social responsibility an integral part ofbusiness operations and strategies. BSR member companies have totalannual revenues of nearly $2 trillion and employ more than six millionworkers around the world. For more information, visit www.bsr.org.

Copyright © 2002 Business for Social Responsibility (BSR) www.bsr.org.

This publication is printed on process chlorine free (PCF) 100% recycled/60% post-consumer waster paper.

Book design, layout and production by Jeremy LaCroix. Email: [email protected].

C

Table of Contents

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The Big Picture: CSR Management-System Development. . . . . 3

Designing a CSR Structure: Nine Essential Steps. . . . . . . . . . . . 6

1. Understand Primary Drivers for CSR Structure Change. . . . . . . . . . . 6

2. Identify Key CSR Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. Identify and Evaluate Stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . 9

4. Identify Current Functions That Support CSR Efforts. . . . . . . . . . . . 10

5. Analyze Current Systems, Culture and Impending Changes. . . . . . . 11

6. Design an Appropriate CSR Structure. . . . . . . . . . . . . . . . . . . . . . . .13

7. Develop an Effective Staffing Plan. . . . . . . . . . . . . . . . . . . . . . . . . . .14

8. Create a Structure for Cross-Functional Interaction. . . . . . . . . . . . .. 24

9. Assess Best Process and Framework for CSR Budget

and Resource Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

1

Introduction

As companies grow more sophisticated aboutcorporate social responsibility (CSR), they areforging new ground in their efforts to establisheffective CSR structures that support theirefforts. There is growing demand for informa-tion, company examples and advice aboutwhat works and what doesn’t in setting up aCSR structure. People are interested in know-ing more about the process of deciding whatCSR structure is right for their companies andin looking at specific issues such as buy-in,alignment, staffing, outside expertise andresource allocation.

Companies arrive at the point of needing todesign a CSR structure at various stages of theirCSR strategy development. Some companiesalready have dedicated CSR staff, but realizethey need a different structure to better coordi-nate and manage their growing CSR programs.Others have specialized staff working in one ormore areas of CSR who are overburdened as thecompany’s CSR activities grow, and are lookingfor a structure that provides greater strategyand integration. Still others decide to developa CSR structure as a reactive or proactiveresponse to external pressures.

One of the most important points to be madeup front is that there is no single universallyaccepted method for designing a CSR struc-ture. This is definitely not a “one-size-fits-all”exercise: What works for one company may notwork for another, and vice versa. What doeswork, though, is following a process that allowsyou to design a structure that aligns your com-pany’s mission, size, sector, culture, businessstructure, geographic locations, risk areas andlevel of CSR commitment.

This report aims to:

• Help you understand how a CSR structurefits into overall CSR management systemdevelopment,

• Outline the steps a company can take tobuild an effective structure that aligns keyCSR issues, stakeholders, functions, staffroles and responsibilities and resources,

• Share company examples of effective CSRstructures,* and

• Provide practical tools to help you workyour way through the decision-makingprocess.

* The company examples include detailed summary infor-

mation on structures gathered during the last year.

Although specific structural details will change over time,

we believe they represent models worth sharing.

2 Business for Social Responsibility

For more information on corporate social responsibility (CSR) – its definition, business benefits, leadership examples and additionalresources, go to BSR’s web site at www.bsr.org.

The Big Picture –

CSR Management-System

Development

Creating and building a successful CSRmanagement system is a complex, long-termproject for any company. It involves a shift inthe way a company conducts business, andcan be likened to implementing other large-scale change initiatives such as total qualitymanagement.

The ultimate goal of a CSR management sys-tem is to successfully integrate corporateresponsibility concerns – social, environmentaland economic – into a company’s values, cul-ture, operations and business decisions at alllevels of the organization, which can help cre-ate better management practices overall.

There is great diversity in companies’ defini-tions of CSR, and their motivations andapproaches to systematically integrating CSRinto their operations. These approaches may bereactive or proactive in response to issues affect-ing an industry, they may address specific stake-holder concerns or they may derive from thebeliefs of a visionary company leader or otherinspirational executives or board members.

In many ways, the CSR field is still evolving.Only a handful of companies can be said to trulyhave CSR management systems in place.However, many more companies are working tointegrate one or more aspects of a CSR manage-ment system. This might involve creating newboard-level committees, developing new poli-cies and practices, engaging in stakeholder dia-logues, putting new or modified staffing struc-tures in place or implementing various long-term planning, accountability and measure-ment efforts.

Designing a CSR Structure 3

BSR helps companies work

through all of these processes

and build CSR management

systems appropriate for their

companies.

The ultimate goal of a CSRmanagement system is to successfully integrate corporate responsibility concerns – social, environmental and economic– into a company’s values,culture, operations and business decisions – at all levels of the organization.

Although moving toward the end goal mayseem like a vast undertaking, the process canbe tackled incrementally. By its nature, theprocess is non-linear, involving several phasesand components that can be implemented atvarious stages. We’ve identified four of themost important phases of developing a CSRmanagement system:

• Build Senior Vision and Support: A Critical Success FactorIt is virtually impossible to successfullyimplement CSR in your company withoutboard, executive and senior managementbuy-in and support. Although it doesn’tnecessarily need to be your first step or aprerequisite for CSR efforts, your ability tobuild senior-level vision and support willhave a direct impact on the depth, breadth,longevity and overall effectiveness of yourCSR work.

• Examine Current CSR Systems &Activities: An Internal Assessment Before designing a CSR structure it is oftenhelpful to assess your current CSR systemsand activities, looking at the whole picture –what CSR policies, programs and structuresare already in place and where the “gaps” are.

• Design a CSR Structure: Nine Essential StepsThis component is the focus of this particu-lar guidebook. It provides you with a step-by-step process for designing a CSR struc-ture appropriate for your company.Through questions, decision-making toolsand company examples, you can analyzeyour company’s motivations, CSR issues,stakeholders and current organization asthey relate to helping you design a moreeffective CSR structure.

• Implement CSR Management Systems:Long-Term IntegrationIn some ways, this is where the real workbegins: Establishing and implementingCSR policies, processes and programs at alllevels of the organization. It may involvedeveloping new approaches or it could be amatter of integrating CSR awareness intoexisting systems. It is not about reinvent-ing the wheel, but making strategicimprovements where necessary.



Design a CSR Structure: 9 Essential Steps

Engage in a process to develop the most appropriate

CSR structure for your company given its mission,

size, sector, culture, business structure, geographic

locations, risk areas and level of commitment. Key

steps for designing a CSR structure include:

•Understand drivers.

•Identify key CSR issues.

•Identify and evaluate stakeholders.

•Identify functions that support CSR efforts.

•Analyze company systems, culture & any

impending changes.

•Evaluate structural options.

•Develop a staffing plan.

•Create structure for cross-functional interaction.

•Assess process and framework for budget and

resource allocation.

CSR Management-System Development

Build Vision and Support for CSR: A Critical Success Factor

Influence and educate various internal stakeholders

with the goal of creating a broad base of support for

CSR throughout the organization. Key actions might

include:

•Develop a clear CSR mandate.

•Educate board, CEO and executive team on CSR.

•Build board, CEO and executive-level

support and involvement.

•Foster organizational interest.

Examine Current CSR Systems: An Internal Assessment

Assess the whole picture – what CSR policies, pro-

grams and structures are already in place and where

there are “gaps”. Illustrative assessment actions

might include:

•Assess CSR definition currently being used by your

company.

•Evaluate your company’s existing CSR policies,

standards, values statements or business principles.

•Understand current CSR commitments, e.g.,

adopted or endorsed external standards.

•Identify departments, functional areas, or cross-

functional initiatives involving CSR responsibilities.

•Identify CSR issues currently being addressed.

•Map relationships with stakeholders.

•Assess current CSR programs and activities.

•Examine evaluation, measurement and reporting

efforts related to CSR performance.

Implement CSR Management Systems:Long-Term Integration

Embed the components of a CSR management sys-

tem into processes and programs throughout the

organization.

•CSR Commitments/Goals

•Target Setting

•Policy Development

•Stakeholder Engagement

•Addressing Global Issues

•Integration into Supply Chain

•Linkage to Planning & Strategy

•CSR Measurement and Reporting

•Risk Management

•Education and Training

•Accountability and Employee Performance Evaluation

•Communications

•Continuous Improvement

Designing a CSR Structure– Nine Essential StepsThe rest of this guidebook lays out a process

of developing a CSR structure appropriate foryour particular company. The nine-stepprocess is divided into four major phases.Although it is not typically a linear process, wehave depicted it that way here so as to clearlyarticulate the logical flow and to emphasizethe importance of planning and analysis beforeactual structural design.

1. Understand PrimaryDrivers for CSR StructureChange

Action: Consider how a modified CSR struc-ture will help the company better meet itsCSR goals.

Key questions:• What are the internal and external motiva-

tions for changing the company’s CSRstructure?

• What are you hoping to accomplishthrough a modified CSR structure?

When a company sets out to create a moreformal CSR structure or modify its existingCSR structure it is usually in response to theconvergence of internal and external factorsthat underscore the need and the potentialbusiness benefits of investing in a differentstructure. These drivers vary tremendouslydepending on the company’s particular situa-tion and characteristics.

Internal Drivers

Companies are motivated to make structuralchanges to better address CSR issues based ona variety of needs and changes within the com-pany. Key goals might include:

• Be more strategic about the company’sshort- and long-term CSR goals, manage-ment systems and specific programs.

• Respond to corporate strategy changessuch as the need for a formal CSR strategyand system, mergers of departments orbusinesses or expansion to different geo-graphic regions where new CSR issues orstakeholder relationships exist.

• Be better integrated by making CSRmore of a “living reality”. Policies mayexist but may not be a part of employees’work on a day-to-day basis.


Analyze Current Systems

Step 5

• Current systems• Current culture • Impending

changes

Drivers

Step 1

• Internal motivations

• External motivations

Mapping

Steps 2, 3, 4

• CSR issues• Key stakeholders• Functions &

departments thatsupport CSRefforts

Structure Design

Steps 6, 7, 8, & 9

• Structural options• Staffing• Cross-functional

interaction• Budget/resource

allocation

• Have better trained and aligned staff byhiring, training and restructuring employeegroups to better handle particular areas ofCSR growth, such as CSR reporting orcode-of-conduct compliance, and to addresspotential problems of misalignment amongstaff skills, expertise and tasks they arecalled upon to handle.

External Drivers

Companies are also motivated to respond toexternal influences and pressure, including:

• Respond effectively to a crisis or publicrelations episode that highlights inade-quacies or inefficiencies in how the compa-ny addresses or communicates its CSR com-mitment and performance.

• Respond more proactively by having asystem in place up-front, so that CSR issuesare identified and addressed effectively.

• Be better able to manage risks andpotential liabilities by having mechanismsin place that allow the company to addressvarious challenges and risks related to oper-ating in the global economy.

• Exert leadership by influencing others’behavior by example.

• Gain visibility and recognition for CSRefforts by effectively and in a coordinatedmanner communicating the totality ofCSR efforts to award programs, the mediaand others.

• Better understand stakeholder inquiresand requests regarding new and oftenmore complex issues, such as requests toadopt new external standards or abide bynew or proposed regulations, legislation,guidelines or shareholder resolutions, etc.

2. Identify Key CSR Issues

Action: Identify and prioritize key CSRissues using information and feedback frominternal and external sources.

Key questions:• What are the key CSR issues your company

is facing – currently and on the horizon?

• How do you prioritize these issues?

Identifying CSR Issues

Although identifying CSR issues should be acontinuous activity for companies with a com-mitment to CSR, it is useful to engage in amore formal and deliberate identification andprioritization process before designing a CSRstructure. It is important to note that the CSRissues each company faces are ever changing –emerging issues become current ones, whilenew ones constantly come to the fore.However, in this case, form follows function:You want to create a structure that directly andeffectively helps you address the CSR issuescurrently of greatest importance and concernto you and your stakeholders.

There are many ways that companies identifyand prioritize CSR issues, from research con-ducted by an individual or staff group to moreformal information-gathering efforts involvingvarious departments and functional areasthroughout the company. Regardless of thespecific process you choose, it will undoubtedlyinvolve research and evaluation of informationgathered from a variety of sources inside andoutside the company. Some of the more typicalsources and major categories of CSR issues are:

• Commonalities in CSR definitions.Business in the Community, BSR, CSR


Europe, the Global ReportingInitiative, the InternationalBusiness Leaders Forum, theU.N. Global Compact andothers have developed princi-ples or issues that comprisetheir definition of CSR.Although each list is slightlydifferent and can containmultiple subcategories, thesesources may be helpful in set-ting a basic framework ofCSR issues. Some of the morecommon CSR issues listedare: accountability, businessethics, community involve-ment, environment, gover-nance, human rights, market-place and labor/workplace.

• Stakeholder issues or con-cerns. One effective way tofurther refine specific CSRissues is to identify and prior-itize issues of concern to yourstakeholders. Stakeholderissues vary tremendously.Some stakeholders are concerned with thepractices of a single company or sector,such as chemical use in agriculture; othersare concerned with a single issue or set ofissues, such as human rights in the apparelindustry; still others are concerned withparticular geographic regions, such aslabor and environmental conditions forcoffee production in Latin America.

• Topics highlighted by the media. Themedia often plays a prominent role in influ-encing CSR performance – by raising newand emerging CSR issues, exposing corpo-rate transgressions, exploring controversialtopics, ranking and rating corporate per-formance and highlighting success stories.Conducting a scan of how your company

and industry are being portrayed in themedia – positively and negatively – can giveadditional insight into key CSR issues foryour company.

• “Horizon” issues for your company orsector. Depending on the particular oper-ating practices of your company and yourindustry, there may be unique CSR issues toaddress. For example, companies in heavymanufacturing might address a variety ofenvironmental issues related to their opera-tions and its by-products; while biotechcompanies might be wrestling with issuesof bio-ethics, animal testing and productsafety. These issues change constantly sothis will be an ongoing exercise for yourcompany.


Illustrative “Hot-Button” CSR Issues – By Sector

Almost every industry has its “hot-button” CSR issues.These high-profile issues represent the “banner” issues ofvarious stakeholder groups and are often the focus of signifi-cant media attention. Because of their importance to externalstakeholders and their potential impact on corporate reputa-tion, they are essential to address. Some illustrative exam-ples by industry are:

• Agriculture – Biodiversity, genetically modified organisms

(GMOs), work conditions, wages

• Apparel – Human rights, labor conditions, use of subcon-

tractors, wages

• Automotive – Climate change, product safety

• Extractives – Bribery, indigenous communities, land use

• Financial Services – Red-lining, predatory lending

• Pharmaceuticals – Patent access, animal testing, bio-ethics

• Technology – Digital divide, product take-back, privacy

• Ethical or legal dilemmas. Occasionally acompany has faced a particular ethical orlegal dilemma that makes them especiallyaware of or sensitive to an issue, such as safe-ty measures following a product recall orchanged company policies and practices fol-lowing a lawsuit.

• Geographic “hot spots.” Location can alsobe a determinant of CSR issues. Regionaland/or country specific locations for opera-tions, sales or distribution as well as loca-tions for contractors and suppliers couldrepresent hot spots from a risk manage-ment, public perception or CSR reputationperspective. These hot spots could be anyregion or country with significant humanrights, bribery or corruption problems, oreconomic, civil and political unrest. Recentexamples are oil industry operations inChad-Cameroon and risk managementissues for companies operating or sourcingin Colombia. These will also change con-tinuously and require monitoring.

• Public CSR commitments made by thecompany. Companies occasionally makepublic statements or promises about CSRperformance targets, such as reducing emis-sions by a certain date or eliminating childlabor in all aspects of their supply chains.All of these commitments need to be incor-porated into any list of key CSR issues.

3. Identify & EvaluateStakeholders

Action: Assess your stakeholder relationshipsby identifying and evaluating them.

Key questions: • Who are your company’s key stakeholders;

what are their issues and relationships withthe company?

• Who are your most valuable and strategicstakeholders in terms of their significance toyou and their willingness to engage?

Understanding your stakeholders and theirprimary expectations is critical to creating anappropriate CSR structure. Although manycompanies share a similar list of broad stake-holder groups, the specific people and organ-izations and the CSR issues of greatest inter-est and concern will be different for eachcompany.

The most commonly used definition of stake-holders is: “All those who affect, and who areaffected by, your business operations.” A typ-ical list of stakeholders might include share-holders, regulators and governments, cus-tomers, employees, communities and relevantinterest groups. Some companies also includebusiness partners and future generations.

Given the breadth of the definitions above, thesteps below offer a process for gaining clarityabout your stakeholders, their issues and theirimportance to your company. This informationwill be valuable as you think about the mostappropriate CSR structure for your company.

Identify Stakeholders

• Key Stakeholders. Create a list of themajor stakeholder groups for your company,then list individual organizations or seg-ments within each group. For example,with employees, you might want to consid-er the issues of hourly employees, employeespecial interest groups, unions, etc. Or forthe environment, you might want to listorganizations concerned with differentaspects of environmental performance.


• Their Issues or Concerns. Using infor-mation that you already have or that yougather directly from stakeholder groups aspart of this process, create a list of eachgroup’s CSR issues, concerns or expecta-tions. If you don’t have time to get inputdirectly from each stakeholder group andorganization, list what you think youknow about their issues.

• Their Relationships with the Company.Create a list showing which departments,functional areas and individuals within thecompany have contact or relationships withindividual stakeholder groups, and notehow information from these relationships isshared with and used by the company.

Evaluate Stakeholders

For each major stakeholder group, assess their:

• Knowledge level. Does the stakeholderhave depth and content expertise in theirfield or about his or her issue or area of con-cern? How is that evident?

• Influence. Have the stakeholders’ past actionsor communications resulted in any noteworthychanges in company or industry practice, pub-lic policy or legislation or media coverage?

• Approachability and willingness toengage. Is there evidence that the stake-holder is interested in a two-way exchangeand is open to influence?

• Credibility. Do other stakeholders orexperts in their area of specialty respectthem or their work? Do the media andother companies?

• Risk potential. In what ways might thestakeholder represent a potential risk?

• Strategic/long-term partnership poten-tial. Is there evidence that the stakeholderis interested in building a productive rela-tionship with your company? With othersin the industry?

How the stakeholder process gets accom-plished can vary tremendously from companyto company depending on available staff, buy-in, resources, time and level of CSR develop-ment. It could be as simple as a staff personcreating a preliminary list based on what he orshe knows about the company’s relationshipswith stakeholders. Or it could be a moreinclusive and expansive process and involve theconvening of a cross-functional group thatinterfaces with external stakeholders or a for-mal dialogue between select company leadersand external stakeholders.

4. Identify Current

Functions That Support

CSR Efforts

Action: Identify internal functional areas,departments, business units and other formalor informal groups involved in CSR.

Key questions:• Which groups have responsibility for your

company’s identified CSR issues?

• How would you describe each group’s levelof accountability, collaboration potentialand resources?

The following list of questions is designed tohelp you create a snapshot of your company’scurrent staffing structure, so that you can iden-tify areas of potential leverage as well as “gaps”.


• Which departments, functional areas,business units or groups (formal or infor-mal) have responsibility for the compa-ny’s CSR efforts? This varies considerablyfrom company to company. The depart-ments that most commonly have responsi-bility for at least some aspect of CSR workare: Community Affairs, Corporate Affairs,Corporate Communications, Environ-ment / Health / Safety, Human Resources,Government Affairs, Legal Affairs, PublicAffairs and Sourcing. Your formal structuremight also include board or executive-levelcommittees, other cross-functional groups,business units, geographically organizedgroups, specially formed task forces, etc.

• What are their CSR that responsibilities?Using information that you already have orthat you gather directly from the groupsthemselves, list the various CSR issues andactivities that each department or unit cov-ers. Try to be as detailed as possible. In manyinstances, there may be more than onedepartment with responsibility for an issue.For example, issues with a potentially riskychemical residue used in contractor or sourc-ing production might involve the intersec-tion of the legal, sourcing and environmentdepartments.

• What is the scope or role of each group?Roles might include one or more of the following:

1. Develop CSR strategy,2. Design CSR policy and programs,3. Implement CSR activities,4. Coordinate CSR efforts,5. Communicate about CSR

internally and externally,6. Measure CSR performance.

• What is each group’s level of accounta-bility? Identify reporting and accountabil-ity relationships for CSR-related matters.

• What are each group’s financialresources? To the extent possible, note thefinancial resources each group allocatestowards CSR efforts and whether thosefunds are centralized, decentralized or a partof a special one-time project.

• Do formal or informal collaboration orcommunications mechanisms existamong the groups? Formal mechanismsmight include monthly updates to theCEO and board committees, CSR-focusedcoordinating meetings of key departmentsor company-wide newsletters that includeCSR information. Informal collaborationand communication is often hard to cap-ture or describe, but make a note ofwhether your structure and culture is onewhere many things occur on an informallevel.

5. Analyze Current

Systems, Culture & Any

Impending Changes

Action: Put it all together. Analyze dataabout your priority CSR issues, stakeholdersand current functions and any relevant infor-mation about your company’s current systems,culture or impending changes.

Key questions:• What are the potential benefits and barriers

of your current organizational systems andculture as you think about designing andimplementing a CSR structure?

• Are there special company or industry CSRissues that need to be taken into consider-ation?


This step ensures that you engage in a com-plete system analysis and have a good sense ofthe “big picture” for your company beforeyou design or re-design a CSR structure. Itrequires you to analyze the data you’ve gath-ered so far (drivers, CSR issues, stakeholdersand critical functions); and consider any addi-tional information about your company’s cur-rent systems, culture or impending internalor industry changes. The following list ofquestions is meant to be illustrative, notexhaustive. Some of them may be relevantand useful to you, others not.

Current Organizational Systems

• What are the internal barriers to imple-menting a new structure?

• When you design a CSR structure, in whatways are you trying to align it with thecompany’s current structure or creatingsomething different?


• How do you win senior-level buy-in, inputand assistance to design and implement a newstructure?

• What other data do you need to support yourcase for a new or redesigned CSR structure?

• What mechanisms are in place for garneringadequate financial resources for the CSRstructure?

• What CSR expertise do you have within thecompany? What expertise are you lacking?

• How effective is your current performanceevaluation system for holding people account-able in the new structure?

Organizational Culture

• How do the company’s values and culturalframework support a CSR structure?

• Is there anything to learn – positive or nega-tive – from other large-scale change initiativesyour company has undertaken?

• What are the unintended consequences –positive or negative – of creating a CSRstructure?

• Are there ethical dilemmas your company isfacing that haven’t been captured in the map-ping exercise? If so, what are they?

• Are there historical dilemmas that haven’tbeen captured in the mapping exercises?

Special Company or Industry Issues

• Are there pending changes in your companythat could significantly affect any of the CSRissues identified?

Benchmarking CSR Structuresof Other Companies

Often, companies contemplating a new orredesigned CSR structure find it helpful tolearn more about what others are doingby looking at the CSR structure of leader-ship companies and others in their sector.

• Contact your colleagues in other compa-nies directly and learn about what’sworked for them.

• Turn to CSR-focused business associa-tions for information on sample compa-ny practices.

• Contract directly with BSR for tailoredbenchmarking and advisory services.

• Are there visible legislative or regulatoryissues for your company or industry?

• Are there impending global or regionalevents that could impact your company sig-nificantly?

• Are there imminent changes in your globalsupply chain?

• Have CSR issues been identified as especial-ly time sensitive?

• Are there CSR issues that might negativelyimpact your business if not addressedimmediately?

• Have any of your stakeholder issues or con-cerns changed because of adjustments inmarkets or your products?

6. Design an AppropriateCSR Structure

Action: Choose an appropriate structuralframework to help your company successfullydevelop and implement its CSR strategy.

Key questions:• Given your company’s existing mission,

size, sector, culture, business structure, geo-graphic locations, risk areas and levels ofcommitment, which CSR structure is mostlikely to be effective?

• Are there ways to incorporate the mosteffective aspects of your current CSR systeminto a new or improved structure?

There is considerable variation in how com-panies internally structure and organize theirCSR activities. The diversity occurs in (1)

how they define the scope of CSR; and (2)where and how companies locate ultimateaccountability and responsibility for CSRstrategy, design, development and implemen-tation. The chart on the following pagedelineates the structural options that exist ateach level within the company.

In general, companies are seeking to designstructures that ensure that there is greater vis-ibility and accountability for CSR issues with-in the company, as well as alignment betweenCSR goals and the overall goals and strategiesof the company.

The mechanisms through which CSR issuesare identified and addressed within manage-ment – along with the process for raisingissues at the board level – are important ele-ments in the way companies are establishingeffective long-term CSR structures.

Regardless of whether you have a highlyintegrated and centralized department withprimary CSR responsibilities or a moredecentralized structure where a group offunctional areas or departments share respon-sibility for the totality of the company’s CSRefforts, it is essential that there be accounta-bility for CSR throughout the organization –at the board, executive and senior levels – aswell as cross-functional interaction and staffsupport.

7. Develop an EffectiveStaffing Plan

Action: Identify CSR-specific staff roles andresponsibilities at the board, executive, senior,and management and specialized-staff levelsthat are appropriate to your company’s cultureand desired structure.



Board of Directors

Task an existing

board member

with broad CSR

responsibility.

Appoint a board

member

specifically for

CSR expertise.

Add CSR

responsibilities

to existing board

committee.

Form a dedicat-

ed CSR board

committee.

Include the

entire board in

CSR decisions.

CSR Organizational Chart – Structural Options*

A B C D E

Cross-Functional Interaction

OptionsCSR committee

comprised of

senior staff

with CSR

responsibilities.

Team formed to

focus on a

specific CSR

topic.

Team formed to

focus on a

specific CSR

task or

outcome.

CSR charter

added to

existing

cross-functional

committee.

Management and Specialized CSR Staff

OptionsWithin a

CSR-focused

department.

Within separate

specialized

departments.

Within

business

units.

Within

geographic

regions.

By specific

skill set.

A B C D E

A B C D

Executive Level

OptionsTask member(s)

of executive

committee with

CSR oversight.

Add a new mem-

ber to the execu-

tive committee

for CSR respon-

sibilities or

expertise.

Add CSR

responsibilities

to an existing

executive

sub-committee.

Form a

dedicated CSR

executive

sub-committee.

Include the

entire executive

committee in

CSR decisions.

A B C D E

Senior CSR Leader

OptionsCentralized: Senior CSR Leader with

overarching responsibilities for

strategy, design, development and

implementation of CSR efforts.

Decentralized: Separate department leaders,

each with discrete CSR responsibilities.

A B

Options

*NONE OF THESE OPTIONS ARE NOT MUTUALLY EXCLUSIVE.


Key questions: • Looking at the data you’ve gathered so far,

what are the optimal structural options foryour company?

• Where in the organizational structure willthese roles best fit?

This section describes common staffing optionsat each level within the organization. It out-lines information on some of the benefits andchallenges of each option, and provides illustra-tive leadership examples from other companies.

Board-Level Structural Options

Board-level involvement in CSR issues is a keyindication that a company considers social andenvironmental issues important and can serveto legitimize them throughout the organiza-tion. Many stakeholders expect directors to beknowledgeable about the full range of issues –social, environmental and financial – that affectthe companies on whose boards they serve, andto be proactive in how they address them.

Companies seeking to demonstrate a commit-ment to CSR and to legitimize the issue inter-nally, often choose to formalize the board’sresponsibility to incorporate CSR issues in thedecision making process and hold managementaccountable on CSR issues. Some companiesexplicitly address the board’s responsibility forCSR in the general company governance guide-

lines or in individual committee charters.Many companies have a formal process for rais-ing CSR issues at the board level and incorpo-rating social and environmental factors intoboard decisions. The structure and nature ofthese efforts can differ substantially, however:Communication might be through a CSR orpublic-affairs department or a corporate secre-tary’s office; an executive having responsibilityfor CSR or ethics may be given a dotted-linereporting relationship with the board.

The following identifies some of the moretypical mechanisms through which companiesstructure CSR responsibility at the board level:

A. Task an existing board member withbroad CSR responsibility. Some boardsdesignate a board member or memberswith responsibility for various aspects of acompany’s CSR policies and activities.

It is essential that there beaccountability for CSR

throughout the organization– at the board, executive

and senior levels – that arealso supported by cross-functional interaction andspecialized staff expertise.

Board-Level Structural Options

OptionsTask an existing

board member

with broad CSR

responsibility.

Appoint a board

member

specifically for

CSR expertise.

Add CSR

responsibilities

to an existing

board

committee.

Form a

dedicated CSR

board

committee.

Include the

entire board in

CSR decisions.

A B C D E


• Starbucks CSR functions are man-

aged by a centralized team of pro-

fessionals, led by the company’s

Senior Vice President, Corporate

Social Responsibility, who current-

ly reports directly to the CEO.

Starbucks’ 14-person CSR team

focuses in four areas: business

practices, environment, commu-

nity and reputation management.

• Ford Motor Co. has a CSR struc-

ture that is a hybrid of a central-

ized and decentralized structure.

The company created an entirely

new unit – Corporate Governance

– expressly for developing CSR

strategy and policy and coordinat-

ing the company’s CSR activities

across a broad range of issues.

The department is made up of a

Director with three staff members.

The Director reports to Ford’sVice President of Corporate

Affairs, who is a member of

Ford’s senior executive team, the

Policy and Strategy Committee, or

P&SC. The Committee’s members

report directly to the company’spresident and COO of Automotive

Operations. Overall leadership

and accountability for Ford’s CSR

efforts reside with the P&SC. It

also has the strong support of the

CEO and Chairman. The board of

Ford also has an Environment and

Public Policy committee chaired

by Ford’s chairman. The Director,

Corporate Governance serves as a

key internal liaison with this com-

mittee. While the Governance

unit is responsible for overall

strategy development and coordi-

nation, responsibility for issue-

specific strategy and most imple-

mentation lies within relevant

functional areas.

• Cisco takes a decentralized

approach to CSR in which no sin-

gle department has responsibility

for broad oversight of the compa-

ny’s CSR strategy or activities.

Most programs associated with

CSR are housed within Human

Resources, which has a unit that

focuses on philanthropy and

another that focuses on culture.

Within corporate headquarters,

the nine philanthropy staff work in

the Cisco Foundation and the

Community Investment Group,

while additional staff are engaged

in community involvement activi-

ties throughout Cisco’s global

operations. The Culture unit has

three staff members and focuses

on such issues as diversity and

work-life balance. Other depart-

ments that have responsibility for

some aspect of CSR include Legal

Affairs, which handles ethics and

privacy issues, and Workplace

Resources, which has responsibili-

ty for environmental issues. Each

of these departments has staff

worldwide who devote some per-

centage of their job responsibilities

to CSR. Cisco gives its business

units considerable freedom to

determine their own CSR policies

and practices, though there are

certain non-negotiable policies set

at the corporate level that encom-

pass such issues as ethics and pri-

vacy. Cisco’s corporate staff

believe that giving business units

autonomy over their CSR activities

makes initiatives more successful

because there is a sense of local

ownership and meaning.

• British Telecommunications (BT)

is another example of a company

experimenting with a centralized

CSR structure. As BT has recently

spun off several of its lines of

business (LOBs) into separate

companies, it has also centralized

its CSR function at the corporate

level. Historically, the company

had separate environmental,

social and community partnership

programs. In the reorganization,

BT combined the three programs

in a single Social Policy Unit to

enable the adoption of a more

integrated CSR or sustainability

management system. The deci-

sion to centralize CSR under one

unit’s leadership was driven in

part by a desire to maintain and

encourage the strong CSR culture

the company had developed as it

goes from being a single entity

with one governance process and

set of policies to a number of

autonomous business units. BT

has tried to leverage the window

of influence that existed prior to

its de-mergers to effectively edu-

cate the different lines of business

about the company’s CSR agenda

and encourage them to adopt

similar policies and practices for

their own operations.

Company Examples – Overall CSR Structure


• Put it in writing. Ensure that your

company creates a separate CSR

statement or embeds its CSR commit-

ment within the company’s mission or

values statement, code of conduct or

other appropriate company policy.

• Embed CSR into the company

planning and budget processes.

The ultimate goal of creating a CSR

management system is to ensure

that CSR considerations are a part of

all business decisions.

• Develop processes for employees

to raise CSR issues and concerns to

appropriate decision makers and

advocates. An open environment is

one of the easiest ways to solicit

valuable feedback on CSR issues and

problems.

• Formalize the board- and execu-

tive-level responsibility for CSR

issues. It is essential to have senior-

level buy-in, support and accounta-

bility for CSR performance.

• Communicate CSR performance

visibly and frequently to all employ-

ees. Whether through newsletters,

annual reports, intranet communica-

tion, meetings, trainings or other

informal mechanisms, make sure

your employees know CSR is a com-

pany priority.

• Put CSR on the agenda of meet-

ings at all levels of the company.

This includes the board, executive

and senior management, company-

wide meetings and departmental

communications.

• Provide training for employees

directly involved with CSR activities.

This is an ongoing commitment since

training needs will change as the com-

pany’s CSR issues change and evolve.

• Create CSR accountability at all

employee levels. Build CSR respon-

sibilities into the job descriptions

and performance evaluations of

employees at all levels.

• Measure and communicate your

performance. Whether you choose

to engage in an internally managed

assessment of your CSR perform-

ance or contract out a formal exter-

nal assessment of your CSR per-

formance, find an honest and appro-

priate way to share the results with

internal and external stakeholders.

This person would typically receive infor-mation from executive- and senior-levelstaff in the company about CSR issues andchallenges and offer counsel and guidance.

B. Appoint a Board member specificallyfor his or her CSR expertise. Sometimesa company will strategically appoint a boarddirector based on that person’s expertise inCSR issues. This board member can act asan advisor offering strategic counsel to theboard and the company in issues related tothe environment, ethics, human rights orparticular geographic regions.

C. Add CSR responsibilities to an existingboard committee. One of the most typ-ical mechanisms for board-level CSR

involvement is to broaden the scope of astanding committee to include responsibil-ity for CSR. The choice could includecommittees such as audit, environment,health and safety and public policy. Forexample, while audit committees have longhad oversight over a range of compliance-based ethics issues, some are now looking atethics and CSR issues more broadly andmore proactively. And as social reportingbecomes more common, these committeesmay grow more involved in overseeingoverall CSR policies and practices.

D. Form a dedicated CSR board commit-tee. Board-level committees address CSRissues in a variety of ways: CorporateResponsibility, Ethics, Public Policy,

Maximizing CSR Involvement at All Levels of the Organization

Corporate Governance, etc. Such commit-tees are typically given responsibility forreviewing and advising the company’s poli-cies and practices on CSR issues such asdiversity, environmental responsibility,ethics, community involvement, humanresources, global sourcing, philanthropy andproduct safety. A smaller number are moreactively involved in CSR policy shaping.

E. Include the entire board in CSR deci-sions. Particularly as CSR becomes a morehigh-profile issue that is being incorporatedinto more facets of corporate operations –and as the corporate governance movementhas raised expectations of all directors –some companies have decided that CSRresponsibility resides with the entire board.These companies are taking steps to ensurethat the full board is trained and educatedabout the CSR issues facing the company.

Executive-Level Structural Options

Executive level buy-in, involvement and sup-port are essential if CSR is to be fully integratedinto the business. The structural options thatexist at the executive level for formalizing CSRresponsibilities are almost identical to the board

level. The most typical structural mechanismsfor addressing CSR at the executive level are:

A. Task member(s) of executive committeewith CSR oversight. In most companies,there is at least one member of the executiveteam with formal oversight of the compa-ny’s CSR policies and activities. UsuallyCSR responsibilities are coupled with otherexecutive responsibilities. Because everycompany is structured differently, the indi-vidual or individuals with ultimate CSRresponsibilities will vary from company tocompany. Sometimes it will be the ChiefExecutive Officer or the Chief OperatingOfficer; or it might be the senior leader incharge of administration, human resources,environment/health/safety, legal or publicaffairs. The responsibilities could also bedivided between two or three senior leaders.It is critical that those with executive-levelCSR responsibilities be CSR champions,able to leverage financial resources for CSRefforts and able to make the CSR case toexecutive peers.

B. Add a new member to the executivecommittee based on CSR responsibilitiesor expertise. As a company is working toformalize and institutionalize its CSR com-


Company Example – Board-Level CSR Involvement

• Pfizer has a long-standing tradition

of making all major decisions with

the full board of directors.

Consequently, the company limits

the number of committees of the

board and addresses the majority of

issues, including CSR, at the full

board level. Pfizer has also made an

effort to diversify its board to reflect

a broader range of experiences and

perspectives, and has sought to

appoint directors who will raise CSR

issues at the board level. Pfizer’s

board meets frequently throughout

the year, which means that it is gen-

erally not difficult to get specific

social or environmental issues on

the board’s agenda. Within manage-

ment, the Corporate Affairs and

Corporate Governance divisions are

responsible for making periodic pre-

sentations to the board on current

and emerging issues including com-

munity involvement, diversity and

ethics. When specific issues arise,

management will make special pre-

sentations to the board. The board

also does a periodic review of the

company’s overall CSR-related poli-

cies and practices. Pfizer’s board of

directors takes an active role in

shaping the company’s policies and

practices on social issues.

mitment, it may choose to appoint a newmember to the executive committee specifi-cally for his/her CSR responsibilities orexpertise. This might be a senior leader whowould not ordinarily be a member of theExecutive Committee based on the currentorganizational reporting structure. Or theappointment might be part of a larger struc-tural change to ensure adequate CSR repre-sentation on the executive committee.

C. Add CSR responsibilities to an existingexecutive sub-committee. Some compa-nies find that incorporating CSR oversightinto an existing executive sub-committeemakes strategic sense because it leverages theexisting structure. In this model, CSRresponsibilities may be incorporated into thecharter of a sub-committee focused on theenvironment/health/safety, ethics, humanresources, philanthropy, sourcing, etc.

D. Form a dedicated CSR executive sub-committee. For others, creating a specialexecutive sub-committee with an exclu-sive CSR charter is a strategic movedesigned to signal a commitment to CSRissues and ensure there is visibility anddistinction to CSR efforts.

E. Involve the entire executive commit-tee in CSR decisions. As some compa-nies further integrate CSR into variousaspects of management, it can be useful toeducate, solicit input from and involvethe entire executive committee in CSR-related decisions. Some companies makeCSR issues a standard agenda item for dis-cussion at the executive level; others peri-odically raise those CSR issues thatinvolve the development of new companypolicies, a CSR mission statement or codeof conduct; large-scale initiatives, such as


Executive-Level Structural Options

OptionsTask member(s)

of executive

committee with

CSR oversight.

Add a new

member to the

executive com-

mittee for CSR

responsibilities

or expertise.

Add CSR

responsibilities

to an existing

executive

sub-committee.

Form a

dedicated CSR

executive

sub-committee.

Include the

entire executive

committee in

CSR decisions.

Company Examples – Executive-Level CSR Involvement

• At Novartis, the heads of Legal

and General Affairs and Human

Resources are the two members of

the Executive Committee of

Novartis with formal responsibility

for CSR issues. Both leaders have

CSR functions and staff that focus

on CSR issues that report in to

them; for example, the company’s

Health, Safety & Environment

department reports into the head of

Legal and General Affairs.

• At Ford, the Director of Corporate

Governance reports to the group

vice president, corporate affairs,

who sits on the Executive

Committee. Ford also has an

Environment and Public Policy

Committee of the board that is

chaired by Ford’s chairman. The

Director, Corporate Governance

serves as a key internal liaison with

this committee.

B EDCA

a new performance system that incorpo-rates CSR accountability; or strategicissues that could impact the company’sfinancial success or overall reputation,such as a high-profile lawsuit, large-scalelayoffs or plant closings.

Senior-Level Structural Options

The following describes (1) the most com-mon structures used at the senior level; (2)some general observations about the diversityof approaches that can be taken at the seniorlevel as well as factors that influence theiroverall success; and (3) a summary chartdelineating possible elements of CSR posi-tions at the senior level.

A. Centralized: Senior CSR Leader withoverarching responsibilities for design,development and coordination of CSRefforts. Over the last several years, the-more companies have begun to centralizethe oversight of their CSR functions into a single department. Sometimes thisdepartment is formed specifically toaddress the company’s overarching CSRagenda. In other instances, companies haveexpanded the scope of responsibilities orcombined existing departments to create asingle department with broad CSR respon-sibilities. The primary motivation forcompanies that choose a centralized struc-ture with a single senior CSR leader is thebelief that it allows them to institutional-ize and embed CSR more strategically

within company operations, creates greatervisibility for the company’s CSR efforts,and provides for a more consistent CSRmessage to stakeholders.

B. Decentralized: Separate departmentleaders, each with discrete CSR respon-sibilities. The majority of companies stilladdress CSR issues through a more decen-tralized structure whereby various depart-mental, functional or regional leaders sharecollective responsibility for the company’sCSR efforts. The departments most oftencharged with responsibility for some aspectof CSR include community affairs/relations,environmental affairs, government affairs,health & safety, human resources, legalcompliance, public affairs, product develop-ment, and purchasing/global sourcing.This model leverages the existing organiza-tional structure, allows CSR responsibilitiesto be embedded in a diversity of functions,and can provide broader accountability.

Regardless of the “macro” senior-level struc-ture that is chosen, there is great diversity inhow companies embed CSR responsibilities.Here are some general observations:

• Scope of positions can be broad or nar-row (see chart on p. 22). Some companieschoose to create senior level CSR positionswith overarching responsibility for all aspectsof the company’s total CSR policies, practicesand programs. In other companies, the posi-tion is narrower in scope – focusing primari-ly on implementation or communication.


Senior-Level Structural Options

OptionsCentralized: Senior CSR Leader with overar-

ching responsibilities for design, develop-

ment and coordination of CSR efforts.

Decentralized: Separate department leaders,

each with discrete CSR responsibilities.

A B

• Position can effectively be housedwithin various functions and includeother responsibilities. A small butgrowing number of companies have a des-ignated CSR department. But in othercases the function is bundled with otherresponsibilities, such as corporate commu-nications or public affairs.

• Balance CSR expertise with knowledgeof company and industry. To ensure CSRdepth and expertise, some companies havechosen to bring in outside CSR experts.This solves one problem but may create oth-ers if that individual doesn’t have an ade-quate understanding of the company’s cul-ture and operations.

• Several factors can influence overall suc-cess of position. These include the need forexecutive and board support, clarity about

the decision-making process and authority,vertical and cross-functional organizationalinfluence, knowledge of the business andindustry, CSR expertise, external influence,ability to garner adequate resources andunderstanding of global issues. Regardless ofwhether you choose a centralized or decen-tralized CSR structure, any of these factorscan affect the outcome of your approach.


There is great variation in the ways that com-panies define and locate the staff involved inCSR efforts. Companies are still experiment-ing with different models of CSR staffing, andthis makes it difficult to draw firm conclusionsabout structural options at the managementand operational level. A few trends, though,are apparent: (1) More companies are estab-


• Chiquita has a centralized CSR

structure led by a full-time Corporate

Responsibility Officer and Vice

President of Corporate

Communications, who is a member

of the executive team and reports to

the Chairman and CEO. The role of

this position is to oversee the design,

implementation, management and

improvement of CSR throughout the

company, including the development

of CSR measurement, verification,

accountability, communication and

reporting systems. Critical to this

position’s success is a governance

structure that embeds responsibility

for CSR throughout the organization.

The company has a board-level audit

committee with “oversight of

whether the Company has the right

people, policies and programs in

place to properly manage Corporate

Responsibility.”

Additionally, the company’s senior

management group is responsible

for providing CSR vision and leader-

ship, modeling Chiquita’s Core

Values, and holding the organization

accountable for achieving credible

progress against CSR goals. The

senior management group is sup-

ported by a Corporate Responsibility

Steering Committee comprised of

ten members drawn from Chiquita’s

business units. The primary role of

this group is the design and imple-

mentation of CSR efforts at the local

and business-unit level.

Agilent’s still-evolving CSR efforts

are supported both directly and indi-

rectly by its senior management

team and board of directors. The

CSR team is led primarily by the

Director of Public Affairs and

includes representatives from other

key corporate functions such as

human resources, environmental

health and safety, quality, procure-

ment, investor relations, legal, and

sales & marketing. The company

implements a variety of CSR-related

programs and activities and partici-

pates in business associations work-

ing on related issues.

Company Example – Senior-Level CSR Involvement


Position Elements

Overall ScopeThe scope can also beinfluenced by the level ofdecision making linked tothe position.

Geographic Scope

Scope of CSR Issues

Internal Relationships

External Relationships

ProgramResponsibilities

Position OptionsFor each element listed, a senior leader can have one, a fewor all of the responsibilities listed.

• Developing CSR strategy.• Designing CSR policies and programs.• Implementing CSR activities.• Coordinating CSR efforts.• Communicating about CSR internally and externally.• Measuring CSR performance.

• International: Globally or particular regions or countries• National: Nationwide or particular areas• Regional: Defined by company operations

• Overarching: Broad mandate to provide key leadership forcompany’s CSR efforts

• Single or cluster of CSR issues• New and emerging CSR issues

• Board• Executives• CSR committees• Other CSR-focused cross-functional committees• Departments• Functional areas• Business units• Geographic regions• Information groups

• All stakeholders• Specific groups of stakeholders

• Oversight of all CSR programs • Specific CSR topic-area programs: such as Community

Involvement, Environment, Health & Safety.• Responsibilities for other functions: When a position is not

100% dedicated to CSR, it will include oversight for otherfunctions, such as communications, corporate affairs or legal.

Senior Level – Possible CSR Position ElementsThe following chart is designed to give you a snapshot of the various options for each of the elements of a

senior-level CSR position. The column on the right indicates how much variation there can be in the structuringof senior-level positions.

lishing dedicated CSR staff, generally at thecorporate level; (2) dedicated CSR staff – how-ever defined – are growing in numbers; and (3)an increasing number of staff whose descrip-tions are being expanded to include new CSRresponsibilities.

The number of staff involved in implement-ing CSR throughout a company varies signif-icantly depending on a company’s culture,structure and priorities. In particular, head-count is affected by whether the companyprefers to centralize corporate initiatives ortransfer CSR initiatives to line and businessfunctions and management. It can often bedifficult to provide a total headcount orresource allocation for CSR issues becauseCSR responsibilities may be folded into manystaff positions. Some companies view CSR asa part of every employee’s job. Others includeonly dedicated full-time senior staff; whilestill others count all staff with CSR as a pri-mary responsibility.

One of the most critical success factors in cre-ating an effective staffing structure at themanagement and operational level is ensuringthat the staff receives adequate training intheir area of CSR specialty. This is especiallytrue in situations where staff may be assignedto manage issues they do not fully understandbecause their positions have been expanded toinclude CSR responsibilities that were notpart of their original jobs. Staff reassigned tomanage CSR issues need retraining and thesupport of additional staff expertise in the


CSR issues of greatest importance to thecompany and its stakeholders.

Some of the more common models are:

A. Within a CSR-focused department.In a centralized model, the CSR-focuseddepartment usually houses some staff withCSR expertise in various areas. The stafffocus will vary depending on the specificscope of the department, and the CSRissues covered by the department. Thismodel doesn’t preclude staff in otherdepartments, functional areas or regionsfrom having CSR responsibilities as well.

B. Within separate specialized depart-ments. In a decentralized model, staff invarious departments have collectiveresponsibility for different pieces of a com-pany’s CSR efforts. For example, an envi-ronment/health/safety department willlikely have responsibility for implement-ing detailed programs at the operationallevel. Staff in a global-sourcing groupmight have responsibility for code-of-con-duct training and interfacing with externalstakeholders; a corporate communicationsstaff might have responsibility for workingon CSR issues with the media, etc.

C-E. By business units, geographic regionor specific skill set. Depending on howa company is organized, it may make moresense to have the structure of CSR man-agement and specialized staff mirror the


OptionsWithin a

CSR-focused

department.

Within separate

specialized

departments.

Within

business

units.

Within

geographic

regions.

By specific

skill set.

A B C D E

existing structure. This may involve hav-ing CSR experts working in a particularbusiness unit such as sourcing or businessdevelopment; or representing a certainregion, such as CSR issues in Europe; ororganized by skill set, such as CSR auditorsembedded within each business unit.

8. Create a Structure for

Cross-Functional

Interaction

Action: Determine effective mechanisms forinvolving various functional areas, depart-ments and/or specialized groups with CSRcharters in developing and implementing thecompany’s CSR efforts.

Key questions:• What are the specific roles and responsibil-

ities of each discrete group that is or will be involved with your CSR efforts (for example, board committee, executive com-mittee, specific CSR committee or anotherad-hoc CSR-related group)?

• How does the CSR structure best supportthe effectiveness of these groups? Does thestructure need to be modified to help peo-ple work more effectively?

Companies have devised many creative mod-els for encouraging CSR-focused cross-func-tional interaction at all levels of the organiza-tion. Whether you have one centralized CSRdepartment or a network of departments withCSR responsibilities, you need to have work-ing relationships – formal and informal –with your internal stakeholders. Such inter-action serves as a key mechanism for commu-nication between departments, is a primarystrategy for integrating CSR into the opera-tions and activities of the entire company andcan be an important symbol of the company’scommitment to CSR.

There are many benefits to cross-functionalinteraction:

• Greater likelihood of developing CSR pro-grams and policies that will be acceptedwithin your organizational culture.

• Greater potential for long-term success: Themore the staff has alignment and buy-in, thegreater the organizational support will be.

• Broader base of organizational support frommultiple functional areas, staff levels andgeographic locations.

• Increased feedback mechanisms for learn-ing about strengths and weaknesses withinthe company and hearing viewpoints fromskeptics and supporters throughout thecompany.


Cross-Functional Interaction

Options

CSR committee

comprised of

senior staff

with CSR

responsibilities.

Team formed to

focus on a

specific CSR

topic.

Team formed to

focus on a

specific CSR task

or outcome.

CSR charter

added to

existing cross-

functional

committee.

A B C D

• A larger pool of employees with knowl-edge, understanding and expertise aboutCSR issues.

• An effective way to coordinate CSR activi-ties across departments, business units andgeographic regions.

• A potential strategy for minimizing the needfor specialized staff and extra head count.

For cross-functional teams to be successful,they must be tailored to your company – itsexisting structure, culture and daily opera-tions. The mission of these groups willdepend on your company’s needs. Their char-ters can include developing CSR policies,coordinating CSR efforts, identifying and/orprioritizing issues, facilitating communica-tion or rolling-out new CSR programs.Special attention should be paid to inclusive-ness and efforts to ensure you have the "right"people at the table. Staff who can representCSR issues, stakeholders or critical function-al areas should be involved. Other aspects ofdiversity should be taken into account aswell, such as the level within the organiza-tion, geographic location, gender, race, etc.

Listed below are some of the most typicalcross-functional structures. None of theoptions listed are mutually exclusive:

• CSR Committee comprised of seniorstaff with CSR responsibilities. As com-panies work to better coordinate their CSRefforts, many find it helpful to create a struc-ture that involves the participation of seniorstaff from CSR-focused departments or busi-ness units. This may be an informal groupcommitted to sharing information with eachother or it might be a more formal commit-tee with a clear mandate and charter

• Team formed to focus on a specific CSR

topic. It is very common for companies tohave issue-specific groups or networksfocused on detailed aspects of CSR imple-mentation. These could exist for any CSRissue area. The leader of the group wouldtypically be the in-house expert and havesome “ownership” or accountability for thegroup and its work. The networks oftenserve as an internal resource for any staffwithin the company who need informationor help addressing a particular topic.

• Team formed to focus on a specific CSRtask or outcome. Occasionally, companieswill find it effective to form a cross-func-tional group whose mission is tailored to aspecial project. For example, a companymight form a group to help inform andcoordinate its external CSR report or tooversee the rollout and implementation of anew code of conduct.

• CSR charter added to existing cross-functional committee. Frequently, com-panies will use an existing structure thatrepresents various functions within thecompany, such as an executive leadershipteam, a vice president’s council or anothersenior management group, adding CSRoversight to its mission. The responsibilityand accountability could rest with a specialCSR sub-committee or the whole group.

9. Assess Best Process andFramework for CSR Budgetand Resource Allocation

Action: Assess the type of budget process,structure and size that is most appropriategiven your company’s short- and long-termCSR priorities and business realities.


Key questions:• What resources are available for CSR activ-

ities and how should they be allocated?

• Who has budget authority? How is thatcoordinated with the rest of the company?

A wide variety of questions can arise duringfinancial planning and budget developmentfor CSR structures. The answers will beinfluenced largely by your company’s existingfinancial structure and process. Several vari-ables make the process easier: strong board-and executive-level support; a clear companycommitment to CSR and your motivationsfor creating a CSR structure; and the abilityto articulate clearly your proposed new orredesigned structure and its cost.

In addition to looking at what a CSR structure

will cost, some companies choose to look at thecost of not developing a CSR structure. Thepotential liabilities for companies that don’taddress problematic CSR issues can be exten-sive: loss of consumer confidence, diminishedfinancial investment, boycotts, legal fees andpenalties and intangibles associated with dam-age to corporate reputation. This is always dif-ficult to gauge, but important to bear in mind.


As companies work to develop in-

house CSR expertise, many find it

useful to work with outside experts

who either have (1) specialized

knowledge of specific CSR topic

areas such as human rights or cli-

mate change; (2) expertise in a

process such as developing a code

of conduct, factory monitoring or

external standards; (3) geographic

CSR expertise, such as labor issues

in Southeast Asia; or (4) broad CSR

expertise and knowledge of compa-

ny leadership practices. Some of

the ways companies use outside

expertise are:

•Individual experts.

Companies can use individual

experts to provide counsel on code

development, conduct research,

educate staff or benchmark leader-

ship practices.

•Informal group of experts for con-

sultation.

It is not uncommon for a company

to develop relationships over time

with several experts who come to

know the company, industry and

particular issues and who can offer

counsel as new and emerging CSR

issues come about.

•More formal advisory group of

experts.

Some companies have found it

helpful to formalize these relation-

ships and consult in a regular or

occasional fashion with an official

group of external advisors chosen

for their expertise on CSR issues of

importance to the company and its

stakeholders.

•Panels of experts brought in on

specific issues.

For those CSR issues that require

training, education and awareness

building of the board or staff, it can

be useful to bring in outside experts

to present the history, framework

and content of the issue.

•CSR support organizations

Many companies find it helpful to

seek information, guidance and con-

sultation from organizations with

deep and broad expertise in the

CSR field.

Tapping External CSR Experts

Regardless of the depart-mental structure that you

choose for your CSRefforts, one of the most

critical success factors iscross-functional interaction.


• DuPont has a Corporate

Environmental Business Council com-

mittee that is chaired by the compa-

ny’s CEO and comprised of senior

leadership representing such functions

as investor relations, corporate plan-

ning, finance and technology. The

Council meets two to three times a

year to discuss significant issues fac-

ing the company, ranging from

addressing global climate change to

making decisions about endorsing the

UN Global Compact. While the group

has traditionally been focused on the

environment, it is beginning to address

a growing number of social issues.

• The Chair of Novartis tasked the

company’s Executive Committee with

assembling a Global Compact

Steering Committee to guide the

company’s efforts to implement the

Compact and develop its overall CSR

strategy. The Steering Committee is a

cross-functional group made up of

senior-level managers who report to

members of the executive committee.

Additionally, three member of the

Executive Committee sit on the

Global Compact Steering Committee.

• At Novo Nordisk, a senior-level

social responsibility committee, the

Social and Industrial Committee, which

stands one level below the executive

committee, was assembled to set CSR

policy and oversee the company’s

CSR activities. The committee meets

approximately four times a year and

provides regular reports to the execu-

tive committee and CEO. The compa-

ny’s Stakeholder Relations unit is rep-

resented on the committee through

the head of the unit and the Vice

President, Ethics and Social

Responsibility. Novo Nordisk also has

a senior-level Environment and

Bioethics committee and a Health

Policy Committee, also with represen-

tation from Stakeholder Relations.

• To ensure Starbucks’ CSR commit-

ment is fulfilled, the CSR group works

internally with cross-functional teams,

promoting business practices that

reflect the company’s core values. It

also communicates those values to

partners and recommends actions that

partners can take to uphold them. The

CSR group is responsible for some of

the external communication to stake-

holder groups, mainly through the

publication of a CSR annual report,

content for Starbucks.com regarding

CSR and collateral materials that com-

municate Starbucks’ commitment.

The CSR group helps identify meas-

ures Starbucks can or should take and

serves as a resource for public affairs

and other internal departments.

Company Examples – Cross-Funtional interaction

Here are several questions to consider as you go throughbudget planning:

• In what ways might you minimize costs by reorganiz-ing responsibilities, changing job descriptions, merg-ing departments or otherwise restructuring?

• Given your company’s budget process, what are thebest ways to advocate for funds to cover new head-count, outside expertise, new programs and/or otherinfrastructure?

• How does your company’s budget process coordinateefforts among parties with a stake in your CSR efforts?

• How will you deal with costs where the work is a

combination of two or more departments orprojects or involves cross-functional efforts?

• How will you deal with CSR work that hap-pens at the business-unit level? Will the indi-vidual business unit cover this? Have theybudgeted for it?

designing a csr structure (fra bsr)

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