How to Enhance Corporate Value
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Meaning of "Enhancing Corporate Value"
What would be a reason of committing oneself to the CSR management? As we consider this question from a view of corporate executive, it is nothing else but he or she is truly aware that CSR management results in the enhancement of corporate value in long term. A smart top executive tries to avoid corruption in advance through implementation of safety & quality assurance and compliance.
A sagacious top management is always being conscious about sensible social issues such as environment and human rights to maintain reputation of the company.
A foresighted top management will try to resolve a challenging issue in a community or society with knowledge and resources of the company, that will provide an innovative solution to the society, and result in gaining a trust and creating a new market for the company.
Everything leads to the prevention of damage and the enhancement of corporate value. Namely “Enhancing Corporate Value” is essential goal for the CSR management.
Proceeding for Enhancing Corporate Value
Issues to be tackled for enhancing the corporate value vary, from prevention of misconduct and accident to creation of a future market, and simply not possible to handle them all in equal degree. In general a company makes a plan for business and defines some targets for the enhancement of corporate value, such as sales or profit.
Likewise, for the CSR management it is important to have clearly defined target level to be aimed at, for the enhancement of corporate value, and internal consensus. It may sound commonsense, but often the companies initiated CSR activities without clearly defined purposes, and got into maze by mixing up their means and goals.
Targeting Approach
What are the targets for the enhancement? Chart 1 is an example of conceptual drawing indicating that an approach and priority are subject to change, based on how the targets to be set in the context of approaching to ISO26000 core subjects.
A company with high priority in avoiding the corruption should focus and vigorously work on issues expected in Level 1 primarily, in order to establish a process that ensures mitigating overt risks. If a company aims at developing in the global market, they should carefully consider the issues expected in Level 2 and create an organization structure, which is capable of working on potential risks with uncertainty.
A company willing to establish competitive advantage in the global market should challenge strategically to the issues expected in Level 3 and present its leadership in a circumstance.
Initially CSR starts with listening to society widely and their expectations, however CSR in the context of corporate management requires a different approach. Rather than tackling with various expectations of the society, it is more effective for the company to take “Target Approach”, namely to analyze its current status and define own target of the corporate value enhancement, and then actions to be taken in a phased manner, from current high priority issues towards moderate priority issues in the future.
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