Ethics & Social Responsibility Plan

What’s in It for You?

Your business derives a number of benefits by being committed to social responsibility and involved in community

activities and causes.

DIRECT BENEFITS

Being a Good “Corporate Citizen” The most basic component of social responsibility is being a good “corporate citizen.” Good corporate citizenship

begins with a company’s own internal practices and policies. It starts with corporate integrity.

Aspects of being a good corporate citizen include:

■ Obeying the law, acting ethically, and being honest and responsible in all your dealings;

■ Treating employees fairly and with respect; compensating employees fairly, and considering the well-being of

employees as part of decision-making;

■ Being honest and fair to your customers and suppliers, and in your advertising and marketing;

■ Being cognizant of the impact your actions have on the environment; and

■ Being involved in your community and concerned about the well-being of others.

Success key terms

Initial Public Offering (IPO)

The first time the company’s stock is sold to the general public (other than by a limited offering) through stock

market or over-the-counter sales.

Social Ventures

Companies whose primary mission is to address a social problem, using entrepreneurial approaches, while still

earning a profit.

Ethics Most companies, especially large ones, now develop clear ethics guidelines and policies. Because employees are

faced with many situations that have ethical implications, it is extremely useful to have a set of clear, consistent

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policies that are firmly and fairly enforced throughout the company on matters such as accepting or giving bribes,

and the nature of gifts, gratuities, or special favors that will be given or accepted.

For a new or small company, an ethics policy doesn’t have to be complex, but laying out clear guidelines on

certain issues, such as expense reimbursement policies and adhering to all laws, can help avoid conflict or legal

trouble.

Describe your ethics policy as part of the Social Responsibility Plan Preparation Form on pages 261–262.

Social Activities The term “social responsibility” can encompass or describe many of a company’s activities and attitudes. Often it is

used to describe companies with very active social or charitable programs. Some companies, including many new

entrepreneurial ventures, are developing creative ways to act on their social commitment and contribute to their

community. For example, the online auction site eBay, before its IPO (Initial Public Offering) of stock to the

public, set aside a fair amount of company stock to establish a philanthropic foundation. As eBay’s stock rose

dramatically, the value of its foundation also rose.

There are many ways your company can be involved in social responsibility activities. The first, of course, is to

be a good corporate citizen. Beyond that, many companies want to take a more active role in their communities,

often donating time or money to various causes and organizations. They may look farther — working to help address

global concerns, for instance.

“Create a culture of community involvement. Start early. Start easy. Some of the kinds of things you can do are goodwill drives for clothing, food, toys, blood, etc.; volunteering in a local elementary school;

working on a park cleanup day or a Habitat for Humanity day.”

Gib Myers

Venture Capitalist

You have many options for choosing how your company can incorporate social responsibility. One of the best

ways to decide on your social responsibility activities is to involve employees themselves in choosing the projects

and policies and to discuss how your company’s values intersect with your programs.

While a company is young and/or small, you may want to limit your social activities to simple things: After all,

you do have a company to build. You might only select one-time activities that could involve all members of your

company as a team, such as participating in a walk for a community charity or volunteering one day to work on

building a house for Habitat for Humanity. These can help promote team spirit, but the time commitment is clear and

limited. You can also choose an ongoing project that is not too demanding; one new company gives one hour a week

to help out at a local school. As your company grows, you may choose more ambitious projects.

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