If you’ve ever seen the 1980s movie “Wall Street,” you probably recall Gordon Gekko saying that “greed is good.”
He may have been a bit shortsighted. Times are changing and so are people’s attitudes about corporate America. In fact, a recent survey conducted by the insurance company Aflac suggests Gekko’s days are numbered.
Here are some of the things the study found:
79 percent of consumers believe companies that stay true to their ethics and values outperform others in their field.
When it comes to millennials, who are 80 million strong with a $200 billion annual purchasing power, 92 percent are more likely to patronize an ethical company.
81 percent of consumers are more likely to purchase from corporations that are active in philanthropic efforts year-round as opposed to only in times of need. 60 percent of investors would sacrifice profit for ethical standards when making long-term investment decisions.
Companies Should Consider
So what is an effective corporate philosophy when it comes to social responsibility? In a day of instant access to information, consumers many of whom have been influenced by such much-publicized issues as Enron, bank scandals, high unemployment and recession have become much more observant of the actions of corporations, and they’re skeptical.
To stay successful, companies are going to have to shift their priorities. Of course, profit is essential to stay in business, but there are presently impediments to profits that didn’t even exist 25 years ago. For example, the study shows millennials have vastly different and stronger demands for corporate social responsibility (CSR) and philanthropy than do those who are over the age of 35. Interestingly, parents share millennials’ desire to do business with companies that give back, while nonparents have greater indifference. These are important considerations in today’s environment.
Combining a greater demand for social responsibility and the fact that the sustained program is preferred by consumers over the opportunistic donations in times of need, companies now must plan their approach to CSR. Companies that have lasting relationships with philanthropic causes (as Aflac does with fighting children’s cancer) are viewed with favor by a growing portion of people affecting the nation’s economy.
Corporate giving, however, is not the only determinant of a company’s reputation. Respondents also see integrity as extremely important, so an effective CSR philosophy should promote the integrity of the company, which can manifest itself in many ways. One such factor is diversity. In fact, 65 percent of respondents agree that the higher a company’s ethical standards, the more diverse the workplace will be.
Protect Your Rep
In today’s culture, businesses that make mistakes are often scolded on social media as being careless or unresponsive to the community. If a company is caught cutting corners or is seen as less than transparent, a steady drumbeat of criticism can threaten its very existence or cause significant costs to overcome the infraction.
After all, the old saying “a reputation is hard to earn but easily lost” is generally true. Companies would do well to heed it.