How to become a good corporate citizen

Whenever the word citizenship comes up, we tend to think about it in terms of human beings. But if you think about it in terms of legal personality, corporate citizenship, which has to do with companies, is very much a reality. And being a “good” citizen can reap real benefits.

It’s imperative to state that a company doesn’t have the singular responsibility of maximising its profits. Being artificial judicial persons, companies have other obligations as well as rights, just as natural persons do. Companies should contribute to the general well-being of the community where they operate and their practices should be in accordance with the provisions of the law.

Good corporate citizenship encompasses these ideas and more. A clear understanding of the concept as well as how companies can become good corporate citizens is essential.     

What is good corporate citizenship?

Good corporate citizenship refers to a company’s duty towards the immediate society it operates in and, by extension, the world at large. It denotes the obligation of an organisation to have firm moral and ethical standards in its business practices as well as its daily interaction with the community, its customers, employees and shareholders.  

Since corporate social responsibility is the path to good corporate citizenship, the latter invariably involves a mindful balance of shareholders’ economic needs with the needs of the immediate society. The organisation, as a whole, is saddled with the responsibility of meeting legal, ethical and economic benchmarks. 

At the heart of good corporate citizenship lies the goal of making the world a better place for everyone. 

It’s geared towards producing a much better quality of life for surrounding communities while ensuring that the business remains profitable for the shareholders. Good corporate citizenship asks that companies understand the impact of their operations and necessarily affect change in the community while achieving business success for the stakeholders.   

Why is good corporate citizenship important?

Good corporate citizenship matters because it’s immensely beneficial to organisations prioritising it. Such organisations can enjoy:

• Tax reductions
• Enhanced brand recognition, reputation and goodwill
• Competitive advantage
• A boost in customer base, customer loyalty and sales
• Attraction of better talent and stronger employee engagement
• Reduced operation costs and better opportunities for organisation-wide growth
• Easier access to investors, capital and other forms of support
• Better financial performance 

Tips on how to become a good corporate citizen

Being a good corporate citizen demands meeting multiple obligations to society, customers, employees and the company’s shareholders. Here are 6 ways a company can attain good corporate citizenship. 

1. Have ethical and compliance standards

A prime feature of good corporate citizenship is ethics and compliance.

Your company should have a resolute code of ethics that embodies the organisation’s values. It provides a common set of standards for all of the company’s stakeholders to adhere to and defines its best practices. 

With a code of ethics in place, none of your employees nor stakeholders will operate whimsically. All of the company’s activities will be geared towards the company’s understanding of good corporate citizenship. 

Compliance has to do with the fulfilment of legal requirements. Just as people can’t claim to be good citizens if they persist in violating the law, the same is the case for corporate entities. Thus, your company should make it a point of duty to obey the law in every area whether tax, disclosure, insurance, data security, health and safety and others.        

2. Engage in philanthropy and other voluntary charitable activities

Powering positive change should be a motivating factor for your company. To give life to the much-desired change, it’s necessary to provide financial support to grantseekers committed to similar causes. Conduct your research into the available grantees to be sure of their methods and values. 

You need to be certain about where your money goes. 

Once you have concrete proof that they deliver, partner with them and trust that they know how best to use the funds you provided. Trust-based philanthropy is a great way forward. 

An example of a company showcasing good corporate citizenship via philanthropy is Wells Fargo, which donates up to 1.5% of its revenue to charitable causes annually.

Creative Force, the parent company of Good Grants, is proud to be an active participant in the Pledge 1% movement to give back to our communities, donating 3.5% of net profit last year, predominantly to environment and nature conservation charities. 

Being a good corporate citizen also involves being aware of society’s needs and taking adequate steps to meet such needs. Even if your company doesn’t team up with another organisation, it could proceed to help out in areas where the community is lacking. 

Whichever challenge you choose to help out with, just make sure that you have the budget for it.  

3. Implement environmentally friendly practices

Another element of good corporate citizenship is the dedication to environmental protection. Climate change and environmental pollution are unpleasant realities and much emphasis is being laid on climate justice. 

However, your company, too, can contribute to the ecological well-being of the community and the world at large by taking crucial steps to reduce its carbon footprint. 

Some practices on how to move towards a more sustainable environment include: 

• Proper disposal of waste to avoid pollution
• Using recyclable materials and actually recycling them
• Applying energy-conserving methods such as lighting
• Using more efficient practices to reduce waste 

Some powerful companies often resort to environmentally destructive practices. Committing to environmental protection demonstrates your willingness to make the world a better place for everyone.

A notable example of a company that excels at demonstrating good corporate citizenship through a commitment to sustainability and environmental protection is Ford; they’re gunning for carbon neutrality in all their vehicles by 2050.

4. Emphasise equity, diversity and inclusion (EDI) and give opportunities to the members of the community

Being a good corporate citizen demands that your business give equal opportunity to all. One way to ensure this is by prioritising equity, diversity and inclusion. Your company should be heterogeneous and the atmosphere should be welcoming to everyone, regardless of their background or identity.

They say variety is the spice of life. So, with a diverse workforce will come better ideas and methods.

Equity is also a feature of good corporate citizenship. You need to ensure that the processes in place at your organisation, whether for promotion, professional development or any other are fair. Don’t favour one group of persons over others.

Furthermore, being a good corporate citizen entails giving employment opportunities to deserving members of the community where your business operates. It demonstrates your company’s respect for the community and willingness to contribute to its improvement.        

5. Improve both customer and employee experience

Being a good corporate citizen also implies doing right by your customers and employees. 

To begin with, customer experience is defined as the nature of interactions your customer has with your business from the first contact onwards. The customer experience determines whether they’d go on to become loyal customers or dissatisfied and lost customers.

Companies that invest in and successfully implement a customer experience strategy record higher customer satisfaction rates, increased revenue, a greater customer base and enhanced customer advocacy. The importance of customer experience is highlighted by a PwC study which shows that customers are willing to pay more for a better experience.

Some hints on how to enhance customer experience are:

• Create an emotional connection with your customers
• Have a clear customer experience vision and equip your team accordingly
• Understand your customers and their pain points
• Capture and act upon customer feedback

Employee experience counts too. It’s crucial to the overall performance of your organisation. Great employee experience guarantees a boost in productivity, more revenue and better employee engagement. To ensure that your employees enjoy working at your company,

• Show empathy
• Be flexible in terms of remote work and work hours
• Prioritise communication
• Have a positive and inclusive company culture
• Inspire creativity and give your employees a voice

Netflix reportedly does an excellent job of improving its employee experience. The company offers 52 weeks of paid parental leave to both birth parents and foster parents which can be taken at any time. That’s a textbook example of displaying good corporate citizenship by improving employee experience.  

Good corporate citizenship emphasises good customer and employee experience because, without the two parties, the company won’t exist.     

6. Maintain satisfactory financial performance

It might seem that the concept of good corporate citizenship focuses mainly on the external. However, that’s the furthest thing from reality. Being a good corporate citizen entails meeting the expectations of the company’s shareholders. 

The major reason for the formation of companies is to generate profit for its founders and subsequent members. Therefore, it counts as the company’s responsibility to achieve such a goal. It behoves your company to take appropriate steps to boost its revenue. Whether your company kicks its marketing efforts full-throttle or improves upon the quality of its offerings, all legitimate endeavours that increase its profits nurture its corporate citizenship.

Demonstrating good corporate citizenship can do your organisation a world of good in all ramifications. Put these tips to work and watch your company gain favour with customers, investors and society at large.