Strategic corporate social responsibility as global brand insurance

When the competitive strategies of multinationals rely on global brands, corporate social responsibility (CSR) offers insurance against management lapses. The practical need for CSR as brand insurance comes from changing social expectations, affluence, and globalization. Corporate actions that violate societal expectations damage, even destroy, brand image among networked stakeholders who are affluent enough to buy branded products and services. The premiums for CSR brand insurance are paid by leaders who create an organization-wide commitment to CSR as a means of redefining 'profit maximization.' By integrating a stakeholder perspective, management is best placed to optimize stockholder returns over the longer term.