Making Corporate Social Responsibility Systemic

Consider the following three questions:

• Does your company have a corporate social responsibility (CSR) program?

• Does your CSR program manage risk for your company?

• Is it integral to the company's approach to risk management?

In response to the first two questions, many corporate leaders are likely to answer "Yes." Many companies have adopted some form of CSR program, and many corporate executives recognize that CSR plays a role in managing both legal and reputational risks.

Unfortunately, despite a general understanding of the beneficial role that CSR can play in addressing risk, many companies are unable to provide an affirmative response to the third question. This is a problem, especially for multinational companies operating in diverse global environments, because it leaves them exposed to unnecessary risk.