Corporate Social ResponsibiltyMicrosoft(503) 555-0167 Newsletter Date Volume 1, Issue 1

BY- SOHAM MADAN XI-I

Corporate Citizenship

CSR at MicrosoftDan Bross, Microsoft’s Senior Director of Corporate

Citizenship.

Seven years ago, Microsoft   started a corporate social

responsibility program called Corporate Citizenship.

Citizenship is a set of corporate activities that add business

value and address a range of social issues. If these activities

are merely add-ons, the value that they add will be very limited.

For this reason, under the leadership of Dan Bross, the

Corporate Citizenship program seeks to build these activities

As an industry leader and the world's largest software company, Microsoft has a responsibility to act as a good corporate citizen. Whether it is complying with local laws and regulations, demonstrating ethical business standards, mitigating risks to

the environment, or protecting human rights, Microsoft is committed to being a global leader in corporate responsibility.Corporate citizenship is also core to the Microsoft business strategy and the

way that we interact with customers, partners,

governments, and employees. It is a way of doing business that recognizes the effect that Microsoft has on society and the effect that society has on our business.

Of Special Interest

CSR

into the very structure of Microsoft. How is this integration

achieved?

First, they developed a global strategy that was summarized in

a 12-page

DAN BROSS

Then they asked their citizenship leagues to localize it based on the issues that are most relevant for them. For

example, branches in Switzerland chose to address issues around child safety by focusing on protecting children from

child predators. They worked with schools and citizen groups to teach parents how to use privacy settings to

prevent predators from contacting their children. In Japan, the focus has been on aging populations. The citizenship

strategy helped local teams to identify and develop a citizen plan around the issues that are most relevant for

their context.

Here in Washington, Microsoft has

partnered with the state government to provide training to the

unemployed and to veterans. They provide vouchers so that

people can take short courses on Microsoft Word, for instance,

and gain skills that will help them find work.

Microsoft is also seeking to reduce it’s environmental impact.

Last week, I had lunch in their corporate cafeteria. They’ve

obviously taken huge steps to reduce waste by providing

receptacles for recycling and composting. Eating utencils are

made of compostible materials as well. The environmental team

worked with developers of the Windows 7 Operating System to

increase its energy-saving functionality. Reducing the power

usage of the Windows 7 also gave them a new way to market

their product.

Bross did note that one of Microsoft’s challenges is creating

more transparency in theirsupply chain. In early February, he

met with numerous investors and investment firms in Europe,

whose combined stockholdings were in the hundreds of millions

of dollars. These stockholders were deeply concerned about

how Microsoft was addressing issues of human rights and

carbon emissions. Bross said that he looked forward to working

with supply-side operations to improve transparency. He

reflected, “I am very proud to be able to work at a company

where that kind of feedback is received openly with a

willingness to listen and to learn and to improve. That is not

always the case.”

Another challenge is communicating more widely with

shareholders. Those investors knew what Microsoft was doing

because they were able to talk with Bross directly. But they

asked him, “If this is so core [to your mission], why isn’t it more

visible on the homepage of your website?” He’s seeking to

make his team more effective in getting corporate citizenship

initiatives into the central marketing group messaging.

Microsoft does engage in reporting   and Bross argued

that GRI   is definitely the most effective reporting mechanism.

But citizenship metrics can be hard to measure. It’s important

to measure them, however, so that companies will view CSR as

a program that adds value to the organization. He

recommended reading Bill Gates‘ speech on “Creative

Capitalism,” which provides a model for value-adding.

Assessment

- Bross made several comments stating that corporate

citizenship aligns with increasing stockholder value. Yet this

clearly is not always the case. There are times when being a

good corporate citizen clashes with increasing stockholder

value, especially in the short term. In the current corporate

legal framework, such clashes are very difficult to navigate. Yet

after Bross’ talk, I was left to wonder if and how the Corporate

Citizenship programs at Microsoft address these tensions.

- Microsoft makes one of it’s most

exciting contributions through their basic business structure.

According to Bross, Microsoft has over 600,000 business

partners globally. For every $1 that Microsoft makes, their

partners make $8.70 on average. This means economic

development for local economies throughout the world. It

translates into jobs, income, and food on the table for partners

and their employees in developing countries. That’s

the classical model   at its best!

Yet what surprised me about the Corporate Citizenship

program is something that Bross didn’t mention. As many are

aware, Microsoft has been accused of anti-trust activities that

are detrimental to competitors. In 2008, the European

Commission fined Microsoft 899m euros ($1.4 bn), claiming

that “Microsoft’s tying of Internet Explorer to the Windows

operating system harms competition between web browsers,

undermines product innovation and ultimately reduces

consumer choice.”1

After hearing Bross describe the numerous programs and

activities in which Microsoft is engaged to build a better world,

it struck me as problematic that they might–at the same time–

be engaging in illegal activities that stifle competition and the

growth of local innovation and economies. I suspected that

their CSR activity really was simply an add-on that had little

impact on Corporate Governance, Operations, or the

Legal/Ethics department of the organization. Yet when I did a

bit of research, I was surprised to see that their Corporate

Citizenship report indicated more integration within the

company than I’d expected. For example, the

citizenship report listed the resolution with the European

Commission as one of the goals and accomplishments for 2010.