Global corporate citizens in local communities

Jane Nelson

As the world enters the 21st century, multinational companies find themselves at the centre of a growing debate on the purpose of business and its role in society. They are under unprecedented pressure, from a variety of stakeholders, to deliver both shareholder value and wider societal value.

These dual pressures are having important implications for the way that companies are viewing and managing their global giving and community investment programmes. The days of corporate giving and social investment being an ad hoc ‘bolt-on’ to the company’s ‘serious’ business are numbered. At least for the companies that aspire to be world class – both globally and locally.

The triumphalism of the Berlin Wall coming down in 1989, ushering in a new era of political and economic freedom, has been tempered by the growing backlash against globalization, epitomized in the 1999 Seattle riots. During this decade, the private sector has emerged as a principal engine for development in almost every country and an increasingly influential player on the global stage. While this has created new opportunities for business, it has also increased competitive pressures and societal expectations. On the one hand, increasingly powerful institutional shareholders are placing pressure on business to be more economically competitive and to create shareholder value-added. At the same time, increasingly powerful civil society organizations, with unprecedented communications capacity via the internet and global media, are placing pressure on business to be more socially accountable and to create wider societal value-added.

In the light of these pressures, leading companies are fundamentally reviewing their global corporate giving and community investment programmes. This is leading to a professionalization of community or social investment programmes and a more strategic approach to how these are managed within the context of the company’s overall business strategy. This article outlines some of the key trends.

Next Special feature to read

Transplanting the community foundation model

Clare Brooks with Juraj Mesik and Beata Hirt