Executive Summary

We investigated these research questions through qualitative research using expert interviews and case study research. Data collection was mostly achieved during 2008 covering 35 interviews and documentary data from more than 12 organisations. At the core of the study is a benchmarking analysis covering seven of the largest German companies (BMW AG, Henkel AG, Linde AG, Merck KGaA, Deutsche Telekom, Siemens AG, and one anonymous company from the automotive industry).
Based on earlier research in leadership excellence, we developed a “RLS framework” in order to structure the empirical investigation. The framework structures different types of leadership instruments and tools into seven fields: The four core fields are termed leadership as a day-to-day interactive process; leadership metrics; leadership deployment; and selection of leaders and leadership development. These core fields are framed by the three contextual fields strategy, structure, and culture.

The details of individual corporate solutions for leadership instruments in each of the seven fields of the RLS framework are presented in descriptive manner and, ultimately, result in the RLS Toolbox. Some of the most innovative solutions are the following (structured according to the framework):

• Corporate strategy: One company developed an environmental portfolio in order to nurture sustainability-oriented products and technologies through dedicated investments and market goals.

• Organisational structure: One of the companies aims at establishing a stakeholder advisory board consisting of various external experts (e.g., NGOs, researchers, political representatives) in order to advise the executive board.

• Leadership as day-to-day process: Most companies integrate CR in their formal values statements and related instruments. One automotive company made principles like responsibility and sustainability a basis of their leadership model (which serves as a basis for evaluation, compensation and development of their managers).

• Leadership metrics: One company introduced an “environmental innovativeness KPI” which is used to control the share of environmental technologies in the innovation pipeline. Another company developed an innovative “community-focused balanced scorecard” integrating their long-term community involvement projects into the top-management scorecard system. Innovative output and impact metrics for measuring these societal projects were linked to the goals in the scorecard.

• Leadership deployment: As a non-monetary incentive, one firm awards teams engaging in extraordinary CR projects with a “CSR award”. The award ceremony is integrated in the yearly general leadership meeting and, hence, reflects the importance of the topic for top-management.

• Selection of leaders and leadership development: One innovate organisation uses service-learning in social projects in order to raise awareness of top executives with respect to sustainability and diversity. The projects have a duration of several weeks and are accompanied by introspective methods like coaching.

Rooted in a scoring model, a comparative analysis in the sense of benchmarking reveals similarities and differences in each area of the responsible leadership systems of the seven benchmarking companies. Informative charts facilitate a cross-company analysis. The benchmarking is achieved on three different levels:

• At the first level, companies are compared using a single aggregated score. This single score also determines the “CSR Leadership ranking” of companies.

• At the second level, the level of the overall RLS, companies are benchmarked using the main fields of the RLS framework (i.e., core fields: interactive process; metrics; deployment; selection and development; and contextual fields: strategy; structure) using aggregated scores.

• At the third level, each “field” (both core and contextual fields) is subject to a detailed benchmarking which compares the degree of CR integration in specific leadership instruments.

The benchmarking results show various similarities between companies:

• Companies most strongly engage in instruments of the interactive process field (e.g., values statements; guidelines) and in non-monetary instruments of the leadership deployment field (e.g., awards, compliance instruments);

• they are less strong regarding instruments in the field of leadership metrics and with regard to monetary instruments in the field of leadership deployment (e.g., CR-oriented variable pay); and

• they almost entirely neglect the field of selection of leaders and leadership development.

Still, differences exist resulting in a typology of RLS covering four types: “doubters”, “newbees & greenwashers” (2), “careful optimists”, and “enthusiasts”. Only two companies are considered enthusiasts scoringhigh in all (core) fields of the leadership system (Figure 1).

The above benchmarking results reveal various success factors for responsible leadership systems:

• Leading companies use CR to rethink their current business models and to tap into new markets.

• Leading companies implement strong CR-oriented organisational structures, especially cross-functional structures to coordinate CR (e.g., CR committees, carbon committee). Maybe one of the most controversial findings – these companies do not necessarily integrate CR in their formal, corporate strategies; sometimes, they only have (functional-level) CR strategies in place.

• Leading companies go beyond “leadership as day-to-day interactive process” (e.g., values statements) and integrate CR also in other areas of the leadership system, namely performance measurement, incentives and compensation.

• Leading companies integrate CR into leadership development programmes and specialists training more strongly than other companies.

[Download full study under "Publications"