The SMH and The Age
this week published the latest – and perhaps saddest – version of Fairfax’s Corporate
Responsibility Index under the heading Growth Business, even though the number of
participants seems to have declined to a sorry level. Among its
astonishing counter-intuitive findings is that the AWB has improved its score compared
with the last time it participated.

The Fairfax group’s
first venture into the area was with the Good Reputation Index which involved a
wide range of companies. This index was dropped under sustained criticism from
the IPA and other ideologues. Yet even supporters of Corporate Social
Responsibility (CSR) initiatives and reputation management found it difficult
to support the GRI given its profound methodological flaws.

Based, initially, on
the perceptions of an eclectic group of marketers, PR people, unionists,
environmentalists and others, it produced results which were criticised by others
in the reputation index industry, academics and the clamour of conservative
commentators who always have ready access to the Fin op-ed pages. This author
even got invited to present a paper, with a colleague, at the 2002 Boston
International Conference on Corporate Reputation under the exciting title of a
Case Study of the Impact of Index Methodology on Corporate Reputation Management
on the GRI. One of the paper’s conclusions – index methodology encouraged people
to focus on massaging their input to the survey rather than doing something
about reputation.

The GRI developed
other forms while the organisers attracted some controversy for not only
measuring performance but also selling consultancy services about reputation
management. Now it has
transmogrified again into a Corporate Responsibility Index supplement (under
different management than the GRI) which finds that “local companies are taking
greater social responsibility”. Unfortunately the sample on which the conclusion
is based is a bit slim – only some 29 companies (up from 27 last year)
participated in the voluntary survey, and the usual suspects got top billing
with Westpac getting the number one spot again.

As with the first
Fairfax effort – the reputation index – the latest CSR index competes with a
host of other indices, guidelines, standards and consulting services. With only
29 entries, it is surprising that the Fairfax group even bothered to publish it.
Perhaps, like its chairman, it never feels embarrassment. Although one has to
feel some sympathy for Leon Gettler, the journalist who covers CSR, ethics and
management in the best, most sustained and intelligent way in Australia, who
got the guernsey to do the commentary on it all.

Fortunately there is
an alternative.The best strategies for companies committed to CSR are
just to do it, and then rely on total transparency by making all the information
about what they have done available on their website. That cuts out the
intermediaries and lets stakeholders and the public judge for themselves.

Note: The author has
advised some of the companies on the
SMH/Age list on corporate reputation, CSR
and other matters.

Peter Fray

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