Does being a good corporate citizen equal good business?

Raymond Snoddy: “The bottom line is that for the bottom line doing good is good business”…

Bill Roedy, the former MTV executive who took MTV channels round the world, has the most interesting CV in the history of the media business.

The graduate of Westpoint fought in Vietnam and even commanded a NATO nuclear missile battery in Italy before succumbing to a love of television and rock and roll.

Naturally in a long MTV career he has been up close and personal with everyone from Nelson Mandela, Bill Clinton, Tony and the Delai Lama to Mick Jagger, Bono, Paul McCartney and Beyonce.

But his recently published autobiography, What Makes Business Rock, is a valuable contribution to a rather different story – a growing debate in corporate circles that goes far beyond the communication industries.

The question is simply stated but difficult to answer – Does being a good corporate citizen equal good business?

It was an issue taken up last night by the integrated agency 23Red – organisers of The Great Good Debate,  featuring the likes of the UK’s digital tsar Martha Lane Fox and former director general of the IPA Hamish Pringle.

For Roedy the answer is clear. He took MTV firmly into AIDS awareness at a time no-one wanted their brand associated with such plague-like negativity. He had been moved by the deaths both of members of his audience and even his staff.

The former head of MTV was responsible for many initiatives including the hard-hitting annual Staying Alive documentaries. It changed behaviour and helped to make MTV one of the most trusted, and profitable, brands among young people.

As Roedy, who in MTV retirement is concentrating on deploying the power of the communications industries to tackle tuberculosis and malaria as well as AIDS, puts it: “The bottom line is that for the bottom line doing good is good business.”

The opposite is certainly true. Doing bad in the age of social networks is ruthlessly punished at the speed of light.

Who would have imagined a few months ago that one of the toughest old street fighters Rupert Murdoch would feel forced to close the News of the World after 168 years of publication by an instantly whipped up campaign on Mumsnet for an advertising boycott.

And it’s not just miscreant journalists who hack mobile phones that get punished. Any company that gets a reputation for polluting, for example, will rapidly be in serious trouble in the internet age.

With the recent riots in England’s cities the picture is less clear. Both good and indifferent corporate citizens were equally targeted at random. The main deciding factor was probably the quality of the consumer electronic goods in the window.

For the Great Good Debate, market research group Trajectory surveyed public attitudes to corporate trust and whether being a “good” company influenced purchasing decisions.

The results were overwhelming. How good a company is and how it behaves towards its customers and communities has far more influence on consumers than its ethical values, its donations to charities or its sustainability policies.

No less than 91% say a company’s reputation for doing good is influential when purchasing a product or service and 90% say how a company treats its customers and communities influences sales.

Only 60% say that a company’s ethics – environmental, sourcing, sustainable and employment policies – are important in purchasing decisions. The percentage drops to 53% for companies donating a percentage of profits to charity.

Unsurprisingly quality, price and service are still most influential, although being “good” is considered very important for financial services companies. If companies aspire to “goodness” then marketing directors have a key role. Good behaviour is not enough. That behaviour has to be communicated.

The problem is, as the research shows, consumers do not particularly trust official corporate statements or sit down to read corporate social responsibility statements. They tend to trust the word of employees but above all they trust word-of-mouth and the verdict of friends – which brings us back to the internet and important of social networks and the buzz created either by viral campaigns or the traditional media.

There is always the danger of consumers almost sub-consciously signing up for “good” companies while actually making choices based on price. Price seems to be the key determinant for the customers of Michael O’Leary’s Ryan Air.

Peter Lacy who leads Accenture’s Sustainability Services business in Europe, Africa, Middle East and Latin America is convinced the trend is clearly moving in the direction of “the good”.

At the very least when all things are equal then a corporate reputation for doing good could be “the tie-breaker”.

Sian Jarvis, former TV presenter and now director general of communications at the Department of Health, told how such things as the obesity epidemic can be tackled by imaginative communications.

As a result of the work on the Change4Live online brand, more than one million mothers have made changes to either the diets of their children or their activity levels. Corporates who have signed up include Asda. Unfortunately doing good can be a medium-term enterprise. Asda has announced limits to its cost-cutting on alcohol. It has been criticised by some for not going further but risks losing market share on drinks if rivals do not follow.

And as for the lastminute.com co-founder, Martha Lane Fox may find it very difficult to deliver on her pledge that everyone in the UK will be online for next year’s Olympics. But she has finally made progress with her father Robin, the ancient historian and gardening columnist of the Financial Times since the 1970’s.

His book on Alexander the Great formed the basis of the film starring Angelina Jolie. Robin Lane Fox met the actress on location in Algeria – and finally went online in order to keep in touch with her by email.

We all need a little incentive – both to develop and to be good.

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