Prepared by the Staff of

Business for Social Responsibility

Busi nes s f or Soc i al Responsi bi 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 nonprofit
organization that partners with member companies to achieve commercial
success in ways that respect ethical values, people, communities and the
environment. Advancing the worldwide adoption of business practices
that build a more just society and sustainable economy, BSR provides
information resources, advisory services, networking and collaborative
opportunities to make corporate social responsibility an integral part of
business operations and strategies. BSR member companies have total
annual revenues of nearly $2 trillion and employ more than six million
workers 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: jerry@jerrybusiness.com.
C
Tabl e 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 about
corporate social responsibility (CSR), they are
forging new ground in their efforts to establish
effective CSR structures that support their
efforts. There is growing demand for informa-
tion, company examples and advice about
what works and what doesnt in setting up a
CSR structure. People are interested in know-
ing more about the process of deciding what
CSR structure is right for their companies and
in looking at specific issues such as buy-in,
alignment, staffing, outside expertise and
resource allocation.
Companies arrive at the point of needing to
design a CSR structure at various stages of their
CSR strategy development. Some companies
already have dedicated CSR staff, but realize
they need a different structure to better coordi-
nate and manage their growing CSR programs.
Others have specialized staff working in one or
more areas of CSR who are overburdened as the
companys CSR activities grow, and are looking
for a structure that provides greater strategy
and integration. Still others decide to develop
a CSR structure as a reactive or proactive
response to external pressures.
One of the most important points to be made
up front is that there is no single universally
accepted method for designing a CSR struc-
ture. This is definitely not a one-size-fits-all
exercise: What works for one company may not
work for another, and vice versa. What does
work, though, is following a process that allows
you to design a structure that aligns your com-
panys mission, size, sector, culture, business
structure, geographic locations, risk areas and
level of CSR commitment.
This report aims to:
Help you understand how a CSR structure
fits into overall CSR management system
development,
Outline the steps a company can take to
build an effective structure that aligns key
CSR issues, stakeholders, functions, staff
roles and responsibilities and resources,
Share company examples of effective CSR
structures,* and
Provide practical tools to help you work
your way through the decision-making
process.
* 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 additional
resources, go to BSRs
web site at www.bsr.org.
The Big Picture
CSR Management-System
Development
Creating and building a successful CSR
management system is a complex, long-term
project for any company. It involves a shift in
the way a company conducts business, and
can be likened to implementing other large-
scale change initiatives such as total quality
management.
The ultimate goal of a CSR management sys-
tem is to successfully integrate corporate
responsibility concerns social, environmental
and economic into a companys values, cul-
ture, operations and business decisions at all
levels 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 and
approaches to systematically integrating CSR
into their operations. These approaches may be
reactive or proactive in response to issues affect-
ing an industry, they may address specific stake-
holder concerns or they may derive from the
beliefs of a visionary company leader or other
inspirational executives or board members.
In many ways, the CSR field is still evolving.
Only a handful of companies can be said to truly
have CSR management systems in place.
However, many more companies are working to
integrate one or more aspects of a CSR manage-
ment system. This might involve creating new
board-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 CSR
management system is to
successfully integrate
corporate responsibility
concerns social,
environmental and economic
into a companys values,
culture, operations and
business decisions at all
levels of the organization.
Although moving toward the end goal may
seem like a vast undertaking, the process can
be tackled incrementally. By its nature, the
process is non-linear, involving several phases
and components that can be implemented at
various stages. Weve identified four of the
most important phases of developing a CSR
management system:
Build Senior Vision and Support:
A Critical Success Factor
It is virtually impossible to successfully
implement CSR in your company without
board, executive and senior management
buy-in and support. Although it doesnt
necessarily need to be your first step or a
prerequisite for CSR efforts, your ability to
build senior-level vision and support will
have a direct impact on the depth, breadth,
longevity and overall effectiveness of your
CSR work.
Examine Current CSR Systems &
Activities: An Internal Assessment
Before designing a CSR structure it is often
helpful to assess your current CSR systems
and activities, looking at the whole picture
what CSR policies, programs and structures
are already in place and where the gaps are.
Design a CSR Structure:
Nine Essential Steps
This 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 tools
and company examples, you can analyze
your companys motivations, CSR issues,
stakeholders and current organization as
they relate to helping you design a more
effective CSR structure.
Implement CSR Management Systems:
Long-Term Integration
In some ways, this is where the real work
begins: Establishing and implementing
CSR policies, processes and programs at all
levels of the organization. It may involve
developing new approaches or it could be a
matter of integrating CSR awareness into
existing systems. It is not about reinvent-
ing the wheel, but making strategic
improvements where necessary.
4 Business for Social Responsibility
Designing a CSR Structure 5
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 companys 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 Steps
The rest of this guidebook lays out a process
of developing a CSR structure appropriate for
your particular company. The nine-step
process is divided into four major phases.
Although it is not typically a linear process, we
have depicted it that way here so as to clearly
articulate the logical flow and to emphasize
the importance of planning and analysis before
actual structural design.
1. Understand Primary
Drivers for CSR Structure
Change
Action: Consider how a modified CSR struc-
ture will help the company better meet its
CSR goals.
Key questions:
What are the internal and external motiva-
tions for changing the companys CSR
structure?
What are you hoping to accomplish
through a modified CSR structure?
When a company sets out to create a more
formal CSR structure or modify its existing
CSR structure it is usually in response to the
convergence of internal and external factors
that underscore the need and the potential
business benefits of investing in a different
structure. These drivers vary tremendously
depending on the companys particular situa-
tion and characteristics.
Internal Drivers
Companies are motivated to make structural
changes to better address CSR issues based on
a variety of needs and changes within the com-
pany. Key goals might include:
Be more strategic about the companys
short- and long-term CSR goals, manage-
ment systems and specific programs.
Respond to corporate strategy changes
such as the need for a formal CSR strategy
and system, mergers of departments or
businesses or expansion to different geo-
graphic regions where new CSR issues or
stakeholder relationships exist.
Be better integrated by making CSR
more of a living reality. Policies may
exist but may not be a part of employees
work on a day-to-day basis.
6 Business for Social Responsibility
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 that
support CSR
efforts
Structure Design
Steps 6, 7, 8, & 9
Structural options
Staffing
Cross-functional
interaction
Budget/resource
allocation
Have better trained and aligned staff by
hiring, training and restructuring employee
groups to better handle particular areas of
CSR growth, such as CSR reporting or
code-of-conduct compliance, and to address
potential problems of misalignment among
staff skills, expertise and tasks they are
called upon to handle.
External Drivers
Companies are also motivated to respond to
external influences and pressure, including:
Respond effectively to a crisis or public
relations 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 a
system in place up-front, so that CSR issues
are identified and addressed effectively.
Be better able to manage risks and
potential liabilities by having mechanisms
in place that allow the company to address
various challenges and risks related to oper-
ating in the global economy.
Exert leadership by influencing others
behavior by example.
Gain visibility and recognition for CSR
efforts by effectively and in a coordinated
manner communicating the totality of
CSR efforts to award programs, the media
and others.
Better understand stakeholder inquires
and requests regarding new and often
more complex issues, such as requests to
adopt new external standards or abide by
new or proposed regulations, legislation,
guidelines or shareholder resolutions, etc.
2. Identify Key CSR Issues
Action: Identify and prioritize key CSR
issues using information and feedback from
internal 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 a
continuous activity for companies with a com-
mitment to CSR, it is useful to engage in a
more formal and deliberate identification and
prioritization process before designing a CSR
structure. It is important to note that the CSR
issues each company faces are ever changing
emerging issues become current ones, while
new ones constantly come to the fore.
However, in this case, form follows function:
You want to create a structure that directly and
effectively helps you address the CSR issues
currently of greatest importance and concern
to you and your stakeholders.
There are many ways that companies identify
and prioritize CSR issues, from research con-
ducted by an individual or staff group to more
formal information-gathering efforts involving
various departments and functional areas
throughout the company. Regardless of the
specific process you choose, it will undoubtedly
involve research and evaluation of information
gathered from a variety of sources inside and
outside the company. Some of the more typical
sources and major categories of CSR issues are:
Commonalities in CSR definitions.
Business in the Community, BSR, CSR
Designing a CSR Structure 7
Europe, the Global Reporting
Initiative, the International
Business Leaders Forum, the
U.N. Global Compact and
others have developed princi-
ples or issues that comprise
their definition of CSR.
Although each list is slightly
different and can contain
multiple subcategories, these
sources may be helpful in set-
ting a basic framework of
CSR issues. Some of the more
common CSR issues listed
are: accountability, business
ethics, community involve-
ment, environment, gover-
nance, human rights, market-
place and labor/workplace.
Stakeholder issues or con-
cerns. One effective way to
further refine specific CSR
issues is to identify and prior-
itize issues of concern to your
stakeholders. Stakeholder
issues vary tremendously.
Some stakeholders are concerned with the
practices of a single company or sector,
such as chemical use in agriculture; others
are concerned with a single issue or set of
issues, such as human rights in the apparel
industry; still others are concerned with
particular geographic regions, such as
labor and environmental conditions for
coffee production in Latin America.
Topics highlighted by the media. The
media often plays a prominent role in influ-
encing CSR performance by raising new
and emerging CSR issues, exposing corpo-
rate transgressions, exploring controversial
topics, ranking and rating corporate per-
formance and highlighting success stories.
Conducting a scan of how your company
and industry are being portrayed in the
media positively and negatively can give
additional insight into key CSR issues for
your company.
Horizon issues for your company or
sector. Depending on the particular oper-
ating practices of your company and your
industry, there may be unique CSR issues to
address. For example, companies in heavy
manufacturing might address a variety of
environmental issues related to their opera-
tions and its by-products; while biotech
companies might be wrestling with issues
of bio-ethics, animal testing and product
safety. These issues change constantly so
this will be an ongoing exercise for your
company.
8 Business for Social Responsibility
Illustrative Hot-Button CSR Issues By Sector
Almost every industry has its

hot-button

CSR issues.
These high-profile issues represent the banner issues of
various stakeholder groups and are often the focus of signifi-
cant media attention. Because of their importance to external
stakeholders 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 a
company has faced a particular ethical or
legal dilemma that makes them especially
aware of or sensitive to an issue, such as safe-
ty measures following a product recall or
changed company policies and practices fol-
lowing a lawsuit.
Geographic hot spots. Location can also
be a determinant of CSR issues. Regional
and/or country specific locations for opera-
tions, sales or distribution as well as loca-
tions for contractors and suppliers could
represent hot spots from a risk manage-
ment, public perception or CSR reputation
perspective. These hot spots could be any
region or country with significant human
rights, bribery or corruption problems, or
economic, civil and political unrest. Recent
examples are oil industry operations in
Chad-Cameroon and risk management
issues for companies operating or sourcing
in Colombia. These will also change con-
tinuously and require monitoring.
Public CSR commitments made by the
company. Companies occasionally make
public statements or promises about CSR
performance targets, such as reducing emis-
sions by a certain date or eliminating child
labor 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 & Evaluate
Stakeholders
Action: Assess your stakeholder relationships
by identifying and evaluating them.
Key questions:
Who are your companys key stakeholders;
what are their issues and relationships with
the company?
Who are your most valuable and strategic
stakeholders in terms of their significance to
you and their willingness to engage?
Understanding your stakeholders and their
primary expectations is critical to creating an
appropriate CSR structure. Although many
companies 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 each
company.
The most commonly used definition of stake-
holders is: All those who affect, and who are
affected by, your business operations. A typ-
ical list of stakeholders might include share-
holders, regulators and governments, cus-
tomers, employees, communities and relevant
interest groups. Some companies also include
business partners and future generations.
Given the breadth of the definitions above, the
steps below offer a process for gaining clarity
about your stakeholders, their issues and their
importance to your company. This information
will be valuable as you think about the most
appropriate CSR structure for your company.
Identify Stakeholders
Key Stakeholders. Create a list of the
major 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, employee
special interest groups, unions, etc. Or for
the environment, you might want to list
organizations concerned with different
aspects of environmental performance.
Designing a CSR Structure 9
Their Issues or Concerns. Using infor-
mation that you already have or that you
gather directly from stakeholder groups as
part of this process, create a list of each
groups CSR issues, concerns or expecta-
tions. If you dont have time to get input
directly from each stakeholder group and
organization, list what you think you
know about their issues.
Their Relationships with the Company.
Create a list showing which departments,
functional areas and individuals within the
company have contact or relationships with
individual stakeholder groups, and note
how information from these relationships is
shared with and used by the company.
Evaluate Stakeholders
For each major stakeholder group, assess their:
Knowledge level. Does the stakeholder
have depth and content expertise in their
field or about his or her issue or area of con-
cern? How is that evident?
Influence. Have the stakeholders past actions
or communications resulted in any noteworthy
changes in company or industry practice, pub-
lic policy or legislation or media coverage?
Approachability and willingness to
engage. Is there evidence that the stake-
holder is interested in a two-way exchange
and is open to influence?
Credibility. Do other stakeholders or
experts in their area of specialty respect
them or their work? Do the media and
other companies?
Risk potential. In what ways might the
stakeholder represent a potential risk?
Strategic/long-term partnership poten-
tial. Is there evidence that the stakeholder
is interested in building a productive rela-
tionship with your company? With others
in the industry?
How the stakeholder process gets accom-
plished can vary tremendously from company
to company depending on available staff, buy-
in, resources, time and level of CSR develop-
ment. It could be as simple as a staff person
creating a preliminary list based on what he or
she knows about the companys relationships
with stakeholders. Or it could be a more
inclusive and expansive process and involve the
convening of a cross-functional group that
interfaces with external stakeholders or a for-
mal dialogue between select company leaders
and external stakeholders.
4. Identify Current
Functions That Support
CSR Efforts
Action: Identify internal functional areas,
departments, business units and other formal
or informal groups involved in CSR.
Key questions:
Which groups have responsibility for your
companys identified CSR issues?
How would you describe each groups level
of accountability, collaboration potential
and resources?
The following list of questions is designed to
help you create a snapshot of your companys
current staffing structure, so that you can iden-
tify areas of potential leverage as well as gaps.
10 Business for Social Responsibility
Which departments, functional areas,
business units or groups (formal or infor-
mal) have responsibility for the compa-
nys CSR efforts? This varies considerably
from company to company. The depart-
ments that most commonly have responsi-
bility for at least some aspect of CSR work
are: Community Affairs, Corporate Affairs,
Corporate Communications, Environ-
ment / Health / Safety, Human Resources,
Government Affairs, Legal Affairs, Public
Affairs and Sourcing. Your formal structure
might also include board or executive-level
committees, other cross-functional groups,
business units, geographically organized
groups, specially formed task forces, etc.
What are their CSR that responsibilities?
Using information that you already have or
that you gather directly from the groups
themselves, list the various CSR issues and
activities that each department or unit cov-
ers. Try to be as detailed as possible. In many
instances, there may be more than one
department with responsibility for an issue.
For example, issues with a potentially risky
chemical residue used in contractor or sourc-
ing production might involve the intersec-
tion of the legal, sourcing and environment
departments.
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 groups level of accounta-
bility? Identify reporting and accountabil-
ity relationships for CSR-related matters.
What are each groups financial
resources? To the extent possible, note the
financial resources each group allocates
towards CSR efforts and whether those
funds are centralized, decentralized or a part
of a special one-time project.
Do formal or informal collaboration or
communications mechanisms exist
among the groups? Formal mechanisms
might include monthly updates to the
CEO and board committees, CSR-focused
coordinating meetings of key departments
or company-wide newsletters that include
CSR information. Informal collaboration
and communication is often hard to cap-
ture or describe, but make a note of
whether your structure and culture is one
where many things occur on an informal
level.
5. Analyze Current
Systems, Culture & Any
Impending Changes
Action: Put it all together. Analyze data
about your priority CSR issues, stakeholders
and current functions and any relevant infor-
mation about your companys current systems,
culture or impending changes.
Key questions:
What are the potential benefits and barriers
of your current organizational systems and
culture as you think about designing and
implementing a CSR structure?
Are there special company or industry CSR
issues that need to be taken into consider-
ation?
Designing a CSR Structure 11
This step ensures that you engage in a com-
plete system analysis and have a good sense of
the big picture for your company before
you design or re-design a CSR structure. It
requires you to analyze the data youve gath-
ered so far (drivers, CSR issues, stakeholders
and critical functions); and consider any addi-
tional information about your companys cur-
rent systems, culture or impending internal
or industry changes. The following list of
questions is meant to be illustrative, not
exhaustive. Some of them may be relevant
and 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 what
ways are you trying to align it with the
companys current structure or creating
something different?
12 Business for Social Responsibility
How do you win senior-level buy-in, input
and assistance to design and implement a new
structure?
What other data do you need to support your
case for a new or redesigned CSR structure?
What mechanisms are in place for garnering
adequate financial resources for the CSR
structure?
What CSR expertise do you have within the
company? What expertise are you lacking?
How effective is your current performance
evaluation system for holding people account-
able in the new structure?
Organizational Culture
How do the companys values and cultural
framework support a CSR structure?
Is there anything to learn positive or nega-
tive from other large-scale change initiatives
your company has undertaken?
What are the unintended consequences
positive or negative of creating a CSR
structure?
Are there ethical dilemmas your company is
facing that havent been captured in the map-
ping exercise? If so, what are they?
Are there historical dilemmas that havent
been captured in the mapping exercises?
Special Company or Industry Issues
Are there pending changes in your company
that could significantly affect any of the CSR
issues identified?
Benchmarking CSR Structures
of Other Companies
Often, companies contemplating a new or
redesigned CSR structure find it helpful to
learn more about what others are doing
by 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 whats
worked for them.
Turn to CSR-focused business associa-
tions for information on sample compa-
ny practices.
Contract directly with BSR for tailored
benchmarking and advisory services.
Are there visible legislative or regulatory
issues for your company or industry?
Are there impending global or regional
events that could impact your company sig-
nificantly?
Are there imminent changes in your global
supply chain?
Have CSR issues been identified as especial-
ly time sensitive?
Are there CSR issues that might negatively
impact your business if not addressed
immediately?
Have any of your stakeholder issues or con-
cerns changed because of adjustments in
markets or your products?
6. Design an Appropriate
CSR Structure
Action: Choose an appropriate structural
framework to help your company successfully
develop and implement its CSR strategy.
Key questions:
Given your companys existing mission,
size, sector, culture, business structure, geo-
graphic locations, risk areas and levels of
commitment, which CSR structure is most
likely to be effective?
Are there ways to incorporate the most
effective aspects of your current CSR system
into a new or improved structure?
There is considerable variation in how com-
panies internally structure and organize their
CSR activities. The diversity occurs in (1)
how they define the scope of CSR; and (2)
where and how companies locate ultimate
accountability and responsibility for CSR
strategy, design, development and implemen-
tation. The chart on the following page
delineates the structural options that exist at
each level within the company.
In general, companies are seeking to design
structures that ensure that there is greater vis-
ibility and accountability for CSR issues with-
in the company, as well as alignment between
CSR goals and the overall goals and strategies
of the company.
The mechanisms through which CSR issues
are identified and addressed within manage-
ment along with the process for raising
issues at the board level are important ele-
ments in the way companies are establishing
effective long-term CSR structures.
Regardless of whether you have a highly
integrated and centralized department with
primary CSR responsibilities or a more
decentralized structure where a group of
functional areas or departments share respon-
sibility for the totality of the companys CSR
efforts, it is essential that there be accounta-
bility for CSR throughout the organization
at the board, executive and senior levels as
well as cross-functional interaction and staff
support.
7. Develop an Effective
Staffing Plan
Action: Identify CSR-specific staff roles and
responsibilities at the board, executive, senior,
and management and specialized-staff levels
that are appropriate to your companys culture
and desired structure.
Designing a CSR Structure 13
14 Business for Social Responsibility
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
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.
Management and Specialized CSR Staff
Options
Within 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
Options
Task 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
Options
Centralized: 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.
Designing a CSR Structure 15
Key questions:
Looking at the data youve gathered so far,
what are the optimal structural options for
your company?
Where in the organizational structure will
these roles best fit?
This section describes common staffing options
at each level within the organization. It out-
lines information on some of the benefits and
challenges of each option, and provides illustra-
tive leadership examples from other companies.
Board-Level Structural Options
Board-level involvement in CSR issues is a key
indication that a company considers social and
environmental issues important and can serve
to legitimize them throughout the organiza-
tion. Many stakeholders expect directors to be
knowledgeable about the full range of issues
social, environmental and financial that affect
the companies on whose boards they serve, and
to 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 boards
responsibility to incorporate CSR issues in the
decision making process and hold management
accountable on CSR issues. Some companies
explicitly address the boards responsibility for
CSR 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 into
board decisions. The structure and nature of
these efforts can differ substantially, however:
Communication might be through a CSR or
public-affairs department or a corporate secre-
tarys office; an executive having responsibility
for CSR or ethics may be given a dotted-line
reporting relationship with the board.
The following identifies some of the more
typical mechanisms through which companies
structure CSR responsibility at the board level:
A. Task an existing board member with
broad CSR responsibility. Some boards
designate a board member or members
with responsibility for various aspects of a
companys CSR policies and activities.
It is essential that there be
accountability for CSR
throughout the organization
at the board, executive
and senior levels that are
also supported by cross-
functional interaction and
specialized staff expertise.
Board-Level Structural Options
Options
Task 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
16 Business for Social Responsibility
Starbucks CSR functions are man-
aged by a centralized team of pro-
fessionals, led by the companys
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 companys CSR activities
across a broad range of issues.
The department is made up of a
Director with three staff members.
The Director reports to Fords
Vice President of Corporate
Affairs, who is a member of
Fords senior executive team, the
Policy and Strategy Committee, or
P&SC. The Committees members
report directly to the companys
president and COO of Automotive
Operations. Overall leadership
and accountability for Fords 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 Fords 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-
nys 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 Ciscos 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. Ciscos 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
units 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 companys CSR agenda
and encourage them to adopt
similar policies and practices for
their own operations.
Company Examples Overall CSR Structure
Designing a CSR Structure 17
Put it in writing. Ensure that your
company creates a separate CSR
statement or embeds its CSR commit-
ment within the companys 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-
panys 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-level
staff in the company about CSR issues and
challenges and offer counsel and guidance.
B. Appoint a Board member specifically
for his or her CSR expertise. Sometimes
a company will strategically appoint a board
director based on that persons expertise in
CSR issues. This board member can act as
an advisor offering strategic counsel to the
board and the company in issues related to
the environment, ethics, human rights or
particular geographic regions.
C. Add CSR responsibilities to an existing
board committee. One of the most typ-
ical mechanisms for board-level CSR
involvement is to broaden the scope of a
standing committee to include responsibil-
ity for CSR. The choice could include
committees such as audit, environment,
health and safety and public policy. For
example, while audit committees have long
had oversight over a range of compliance-
based ethics issues, some are now looking at
ethics and CSR issues more broadly and
more proactively. And as social reporting
becomes more common, these committees
may grow more involved in overseeing
overall CSR policies and practices.
D. Form a dedicated CSR board commit-
tee. Board-level committees address CSR
issues in a variety of ways: Corporate
Responsibility, Ethics, Public Policy,
Maximizing CSR Involvement at All Levels of the Organization
Corporate Governance, etc. Such commit-
tees are typically given responsibility for
reviewing and advising the companys poli-
cies and practices on CSR issues such as
diversity, environmental responsibility,
ethics, community involvement, human
resources, global sourcing, philanthropy and
product safety. A smaller number are more
actively involved in CSR policy shaping.
E. Include the entire board in CSR deci-
sions. Particularly as CSR becomes a more
high-profile issue that is being incorporated
into more facets of corporate operations
and as the corporate governance movement
has raised expectations of all directors
some companies have decided that CSR
responsibility resides with the entire board.
These companies are taking steps to ensure
that the full board is trained and educated
about 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 integrated
into the business. The structural options that
exist at the executive level for formalizing CSR
responsibilities are almost identical to the board
level. The most typical structural mechanisms
for addressing CSR at the executive level are:
A. Task member(s) of executive committee
with CSR oversight. In most companies,
there is at least one member of the executive
team with formal oversight of the compa-
nys CSR policies and activities. Usually
CSR responsibilities are coupled with other
executive responsibilities. Because every
company is structured differently, the indi-
vidual or individuals with ultimate CSR
responsibilities will vary from company to
company. Sometimes it will be the Chief
Executive Officer or the Chief Operating
Officer; or it might be the senior leader in
charge of administration, human resources,
environment/health/safety, legal or public
affairs. The responsibilities could also be
divided between two or three senior leaders.
It is critical that those with executive-level
CSR responsibilities be CSR champions,
able to leverage financial resources for CSR
efforts and able to make the CSR case to
executive peers.
B. Add a new member to the executive
committee based on CSR responsibilities
or expertise. As a company is working to
formalize and institutionalize its CSR com-
18 Business for Social Responsibility
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. Pfizers
board meets frequently throughout
the year, which means that it is gen-
erally not difficult to get specific
social or environmental issues on
the boards 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
companys overall CSR-related poli-
cies and practices. Pfizers board of
directors takes an active role in
shaping the companys policies and
practices on social issues.
mitment, it may choose to appoint a new
member to the executive committee specifi-
cally for his/her CSR responsibilities or
expertise. This might be a senior leader who
would not ordinarily be a member of the
Executive Committee based on the current
organizational reporting structure. Or the
appointment 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 existing
executive sub-committee. Some compa-
nies find that incorporating CSR oversight
into an existing executive sub-committee
makes strategic sense because it leverages the
existing structure. In this model, CSR
responsibilities may be incorporated into the
charter of a sub-committee focused on the
environment/health/safety, ethics, human
resources, philanthropy, sourcing, etc.
D. Form a dedicated CSR executive sub-
committee. For others, creating a special
executive sub-committee with an exclu-
sive CSR charter is a strategic move
designed to signal a commitment to CSR
issues and ensure there is visibility and
distinction to CSR efforts.
E. Involve the entire executive commit-
tee in CSR decisions. As some compa-
nies further integrate CSR into various
aspects of management, it can be useful to
educate, solicit input from and involve
the entire executive committee in CSR-
related decisions. Some companies make
CSR issues a standard agenda item for dis-
cussion at the executive level; others peri-
odically raise those CSR issues that
involve the development of new company
policies, a CSR mission statement or code
of conduct; large-scale initiatives, such as
Designing a CSR Structure 19
Executive-Level Structural Options
Options
Task 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 companys
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 Fords chairman. The
Director, Corporate Governance
serves as a key internal liaison with
this committee.
B
E D C A
a new performance system that incorpo-
rates CSR accountability; or strategic
issues that could impact the companys
financial success or overall reputation,
such as a high-profile lawsuit, large-scale
layoffs 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 diversity
of approaches that can be taken at the senior
level as well as factors that influence their
overall success; and (3) a summary chart
delineating possible elements of CSR posi-
tions at the senior level.
A. Centralized: Senior CSR Leader with
overarching responsibilities for design,
development and coordination of CSR
efforts. Over the last several years, the-
more companies have begun to centralize
the oversight of their CSR functions
into a single department. Sometimes this
department is formed specifically to
address the companys overarching CSR
agenda. In other instances, companies have
expanded the scope of responsibilities or
combined existing departments to create a
single department with broad CSR respon-
sibilities. The primary motivation for
companies that choose a centralized struc-
ture with a single senior CSR leader is the
belief that it allows them to institutional-
ize and embed CSR more strategically
within company operations, creates greater
visibility for the companys CSR efforts,
and provides for a more consistent CSR
message to stakeholders.
B. Decentralized: Separate department
leaders, each with discrete CSR respon-
sibilities. The majority of companies still
address CSR issues through a more decen-
tralized structure whereby various depart-
mental, functional or regional leaders share
collective responsibility for the companys
CSR efforts. The departments most often
charged with responsibility for some aspect
of CSR include community affairs/relations,
environmental affairs, government affairs,
health & safety, human resources, legal
compliance, public affairs, product develop-
ment, and purchasing/global sourcing.
This model leverages the existing organiza-
tional structure, allows CSR responsibilities
to 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 in
how companies embed CSR responsibilities.
Here are some general observations:
Scope of positions can be broad or nar-
row (see chart on p. 22). Some companies
choose to create senior level CSR positions
with overarching responsibility for all aspects
of the companys total CSR policies, practices
and programs. In other companies, the posi-
tion is narrower in scope focusing primari-
ly on implementation or communication.
20 Business for Social Responsibility
Senior-Level Structural Options
Options
Centralized: 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 housed
within various functions and include
other responsibilities. A small but
growing number of companies have a des-
ignated CSR department. But in other
cases the function is bundled with other
responsibilities, such as corporate commu-
nications or public affairs.
Balance CSR expertise with knowledge
of company and industry. To ensure CSR
depth and expertise, some companies have
chosen to bring in outside CSR experts.
This solves one problem but may create oth-
ers if that individual doesnt have an ade-
quate understanding of the companys cul-
ture and operations.
Several factors can influence overall suc-
cess of position. These include the need for
executive and board support, clarity about
the decision-making process and authority,
vertical and cross-functional organizational
influence, knowledge of the business and
industry, CSR expertise, external influence,
ability to garner adequate resources and
understanding of global issues. Regardless of
whether you choose a centralized or decen-
tralized CSR structure, any of these factors
can affect the outcome of your approach.
Management and Specialized CSR Staff
There is great variation in the ways that com-
panies define and locate the staff involved in
CSR efforts. Companies are still experiment-
ing with different models of CSR staffing, and
this makes it difficult to draw firm conclusions
about structural options at the management
and operational level. A few trends, though,
are apparent: (1) More companies are estab-
Designing a CSR Structure 21
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
positions 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 companys senior
management group is responsible
for providing CSR vision and leader-
ship, modeling Chiquitas 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 Chiquitas
business units. The primary role of
this group is the design and imple-
mentation of CSR efforts at the local
and business-unit level.
Agilents 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
22 Business for Social Responsibility
Position Elements
Overall Scope
The scope can also be
influenced by the level of
decision making linked to
the position.
Geographic Scope
Scope of CSR Issues
Internal Relationships
External Relationships
Program
Responsibilities
Position Options
For each element listed, a senior leader can have one, a few
or 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 for
companys 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 other
functions, such as communications, corporate affairs or legal.
Senior Level Possible CSR Position Elements
The 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 structuring
of senior-level positions.
lishing dedicated CSR staff, generally at the
corporate 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 CSR
responsibilities.
The number of staff involved in implement-
ing CSR throughout a company varies signif-
icantly depending on a companys culture,
structure and priorities. In particular, head-
count is affected by whether the company
prefers to centralize corporate initiatives or
transfer CSR initiatives to line and business
functions and management. It can often be
difficult to provide a total headcount or
resource allocation for CSR issues because
CSR responsibilities may be folded into many
staff positions. Some companies view CSR as
a part of every employees job. Others include
only dedicated full-time senior staff; while
still 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 the
management and operational level is ensuring
that the staff receives adequate training in
their area of CSR specialty. This is especially
true in situations where staff may be assigned
to manage issues they do not fully understand
because their positions have been expanded to
include CSR responsibilities that were not
part of their original jobs. Staff reassigned to
manage CSR issues need retraining and the
support of additional staff expertise in the
Designing a CSR Structure 23
CSR issues of greatest importance to the
company and its stakeholders.
Some of the more common models are:
A. Within a CSR-focused department.
In a centralized model, the CSR-focused
department usually houses some staff with
CSR expertise in various areas. The staff
focus will vary depending on the specific
scope of the department, and the CSR
issues covered by the department. This
model doesnt preclude staff in other
departments, functional areas or regions
from having CSR responsibilities as well.
B. Within separate specialized depart-
ments. In a decentralized model, staff in
various departments have collective
responsibility for different pieces of a com-
panys CSR efforts. For example, an envi-
ronment/health/safety department will
likely have responsibility for implement-
ing detailed programs at the operational
level. Staff in a global-sourcing group
might have responsibility for code-of-con-
duct training and interfacing with external
stakeholders; a corporate communications
staff might have responsibility for working
on CSR issues with the media, etc.
C-E. By business units, geographic region
or specific skill set. Depending on how
a company is organized, it may make more
sense to have the structure of CSR man-
agement and specialized staff mirror the
Management and Specialized CSR Staff
Options
Within 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 particular
business unit such as sourcing or business
development; or representing a certain
region, such as CSR issues in Europe; or
organized by skill set, such as CSR auditors
embedded within each business unit.
8. Create a Structure for
Cross-Functional
Interaction
Action: Determine effective mechanisms for
involving various functional areas, depart-
ments and/or specialized groups with CSR
charters in developing and implementing the
companys 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 another
ad-hoc CSR-related group)?
How does the CSR structure best support
the effectiveness of these groups? Does the
structure 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 CSR
department or a network of departments with
CSR 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 primary
strategy for integrating CSR into the opera-
tions and activities of the entire company and
can be an important symbol of the companys
commitment to CSR.
There are many benefits to cross-functional
interaction:
Greater likelihood of developing CSR pro-
grams and policies that will be accepted
within your organizational culture.
Greater potential for long-term success: The
more the staff has alignment and buy-in, the
greater the organizational support will be.
Broader base of organizational support from
multiple functional areas, staff levels and
geographic locations.
Increased feedback mechanisms for learn-
ing about strengths and weaknesses within
the company and hearing viewpoints from
skeptics and supporters throughout the
company.
24 Business for Social Responsibility
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 about
CSR issues.
An effective way to coordinate CSR activi-
ties across departments, business units and
geographic regions.
A potential strategy for minimizing the need
for specialized staff and extra head count.
For cross-functional teams to be successful,
they must be tailored to your company its
existing structure, culture and daily opera-
tions. The mission of these groups will
depend on your companys needs. Their char-
ters can include developing CSR policies,
coordinating CSR efforts, identifying and/or
prioritizing 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 represent
CSR issues, stakeholders or critical function-
al areas should be involved. Other aspects of
diversity should be taken into account as
well, such as the level within the organiza-
tion, geographic location, gender, race, etc.
Listed below are some of the most typical
cross-functional structures. None of the
options listed are mutually exclusive:
CSR Committee comprised of senior
staff with CSR responsibilities. As com-
panies work to better coordinate their CSR
efforts, many find it helpful to create a struc-
ture that involves the participation of senior
staff from CSR-focused departments or busi-
ness units. This may be an informal group
committed to sharing information with each
other 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 to
have issue-specific groups or networks
focused on detailed aspects of CSR imple-
mentation. These could exist for any CSR
issue area. The leader of the group would
typically be the in-house expert and have
some ownership or accountability for the
group and its work. The networks often
serve as an internal resource for any staff
within the company who need information
or help addressing a particular topic.
Team formed to focus on a specific CSR
task or outcome. Occasionally, companies
will find it effective to form a cross-func-
tional group whose mission is tailored to a
special project. For example, a company
might form a group to help inform and
coordinate its external CSR report or to
oversee the rollout and implementation of a
new code of conduct.
CSR charter added to existing cross-
functional committee. Frequently, com-
panies will use an existing structure that
represents various functions within the
company, such as an executive leadership
team, a vice presidents council or another
senior management group, adding CSR
oversight to its mission. The responsibility
and accountability could rest with a special
CSR sub-committee or the whole group.
9. Assess Best Process and
Framework for CSR Budget
and Resource Allocation
Action: Assess the type of budget process,
structure and size that is most appropriate
given your companys short- and long-term
CSR priorities and business realities.
Designing a CSR Structure 25
Key questions:
What resources are available for CSR activ-
ities and how should they be allocated?
Who has budget authority? How is that
coordinated with the rest of the company?
A wide variety of questions can arise during
financial planning and budget development
for CSR structures. The answers will be
influenced largely by your companys existing
financial structure and process. Several vari-
ables make the process easier: strong board-
and executive-level support; a clear company
commitment to CSR and your motivations
for creating a CSR structure; and the ability
to articulate clearly your proposed new or
redesigned structure and its cost.
In addition to looking at what a CSR structure
will cost, some companies choose to look at the
cost of not developing a CSR structure. The
potential liabilities for companies that dont
address problematic CSR issues can be exten-
sive: loss of consumer confidence, diminished
financial investment, boycotts, legal fees and
penalties and intangibles associated with dam-
age to corporate reputation. This is always dif-
ficult to gauge, but important to bear in mind.
26 Business for Social Responsibility
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 CSR
efforts, one of the most
critical success factors is
cross-functional interaction.
Designing a CSR Structure 27
DuPont has a Corporate
Environmental Business Council com-
mittee that is chaired by the compa-
nys 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
companys Executive Committee with
assembling a Global Compact
Steering Committee to guide the
companys 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 companys
CSR activities. The committee meets
approximately four times a year and
provides regular reports to the execu-
tive committee and CEO. The compa-
nys 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 companys 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 through
budget planning:
In what ways might you minimize costs by reorganiz-
ing responsibilities, changing job descriptions, merg-
ing departments or otherwise restructuring?
Given your companys budget process, what are the
best ways to advocate for funds to cover new head-
count, outside expertise, new programs and/or other
infrastructure?
How does your companys budget process coordinate
efforts 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 or
projects 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 they
budgeted for it?