Corporate Citizenship

Corporate citizenship, sometimes called corporate responsibility, can be defined as the ways in which a company's strategies and operating practices affect its stakeholders, the natural environment, and the societies where the business operates. In this definition, corporate citizenship encompasses the concept of corporate social responsibility (CSR), which involves companies' explicit and mainly discretionary efforts to improve society in some way, but is also directly linked to the company's business model in that it requires companies to pay attention to all their impacts on stakeholders, nature, and society. Corporate citizenship is, in this definition, integrally linked to the social, ecological, political, and economic impacts that derive from the company's business model; how the company actually does business in the societies where it operates; and how it handles its responsibilities to stakeholders and the natural environment. Corporate citizenship is also associated with the rights and responsibilities granted to a company or organization by governments where the enterprise operates; just as individual citizenship carries rights and responsibilities, however, companies have considerably more resources and power than do most individuals and do not have the right to vote.

While CSR has historically referred to a company's economic, legal, ethical, and discretionary responsibilities, corporate citizenship emphasizes the integral responsibilities attendant to a company's strategies and practices. There are other definitions of corporate citizenship, but they are generally consistent with the theme of integrating social, ecological, and stakeholder responsibilities into the companies' business strategies and practices. For example, the United Nations' definition states that corporate citizenship is the integration of social and environmental concerns into business policies and operations. The U.S. association Business for Social Responsibility defines it as operating a business in a manner that meets or exceeds the legal, ethical, commercial, and public expectations that society has of business. The definition of the Center for Corporate Citizenship at Boston College requires that a good corporate citizen integrate basic social values with everyday business practices, operations, and policies so that these values influence daily decision making across all aspects of the business and takes into account its impact on all stakeholders, including employees, customers, communities, suppliers, and the natural environment.

The definition of the Corporate Citizenship Unit at Great Britain's University of Warwick Business School indicates that corporate citizenship involves the study of a broad range of issues, including community investment, human rights, corporate governance, environmental policy and practice, social and environmental reporting, social auditing, stakeholder consultation, and responsible supply chain management. Australia's Deakin University's Corporate Citizenship Research claims that corporate citizenship [Page 457]recognizes business's social, cultural, and environmental responsibilities to the community in which the business seeks a license to operate and recognizes economic and financial obligations to shareholders and stakeholders.