Performance Impact November 15, 2007

1. Performance ImpactNovember 15, 2007 A New Kind of Corporate Social Responsibility Fleishman-Hillard 200 N. Broadway St. Louis, MO 63102

2. A Little Humor …

3. A New Kind of CorporateSocial Responsibility Overview of Corporate Social Responsibility

4. CSR in the Past “ There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits. ” –Milton Friedman, Capitalism and Freedom (1962)

5. What CSR Means Today “ This obligation [of CSR] is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. ” –Wikipedia

6. Why It Matters • Growing recognition that companies can address social issues more effectively than some governments – Katrina brought this home to U.S. • American public is increasingly critical of big business – diminishing middle class, perception wealth flows to business elites • Worldwide attention to climate change – Europe leads the globe, Asia closing in, and U.S. catching up • Rapid growth and use of technology – alleged wrongdoing can be captured, put on YouTube, calling attention to a global audience within minutes • Heightened awareness from Wall Street

7. A New Kind of CorporateSocial Responsibility The Study

8. Background • Second annual survey set against backdrop of sweeping national political change (2006 midterm elections) • FH/NCL speculated consumer frustration over domestic issues (not just Iraq War) contributed to political change • 2007 survey: • Investigates Americans’ perceptions of CSR, including political party affiliation • Determines whether Americans expect government to play a role in realigning corporate America’s priorities

9. Study Design • Partnered with National Consumers League • Surveyed diverse mix of U.S. adults (18+) • All 50 states • 2,078 telephone interviews; 30 minutes (avg.) • Sampling error = 1 – 2 percentage points (95% confidence level) • Conducted Q1 2007

10. Key Findings In your own words, what does the phrase “corporate social responsibility” mean to you?* (Volunteered) * Columns may not add to 100% due to multiple responses.

11. Key Findings • Corporations should be engaged in ways that go beyond making financial contributions. • Corporations need to be committed to communities and, overall, to society (23 percent). • Corporations need to be committed to employees (17 percent). • For the second year in a row, corporate America receives low marks for its CSR performance. • The performance of corporations is better “in their own backyard” versus the nation as a whole.

12. Key Findings • Americans believe that government should ensure the social responsibility of corporations. • Four out of five consumers say it is important for Congress to ensure that corporations address pressing social issues. • Consumers gather and communicate information about companies’ CSR from the Internet more than any other source. • Online sources outweigh traditional offline sources as preferred ways to learn about the CSR record of companies in consumers’ communities.

13. Key Findings Online Social Media Now Primary Source of CSR Information What types of online resources have you used?* *Columns may not add to 100% due to multiple responses. **Less than one-half of one percent.

14. A New Kind of CorporateSocial Responsibility The Impact of Internal

15. “Treats Employees Well” Remains Most Important Assuming that a company is operating its business in an honest and ethical manner, which one of the following is most important to you? Nationwide (n=2,078) Treats and pays employees well 1% Goes beyond law to protect 3% environment 3% Responsive to customers' needs 9% Contributes to community beyond paying taxes 8% Shares your values 38% Ensures good profits for 9% shareholders Gives to charitable causes 14% All the same/other 15% Don't know/Refused

16. Employee Issues Are Important for Business What are your expectations of local companies’ participation in or contribution to their communities? • Companies should make non-financial contributions, such as volunteering time or effort (29 percent). • Companies should treat employees well, provide a livable wage, or provide employment (11 percent). Non-financial contributions Fixing problems created by company Environmentally friendly practices No expectations

17. Employees Should Come Before Charities To what extent do you agree or disagree with the following statements: Focus on generating business and employing more people, rather than making corporate donations to social causes. Place employee salary and wage increases above making charitable contributions.

18. Employee Related Concerns Throughout Findings • Wages • Important to pay workers inside/outside U.S. a living wage (73 percent). • Agree salary/wage increases should be placed above charitable contributions (“strongly” or “somewhat” agree, 76 percent). • Among seven options, including “gives to charitable causes,” more than one-third selected “treats and pays its employees well” as most important (38 percent). • Jobs • Generate business and employ more people rather than making charitable donations (“strongly” or “somewhat” agree, 70 percent). • Employees vs. Environment • Assuming a company operates in an honest and ethical manner, it is more important for corporations to treat or pay employees well than to go beyond the law to protect the environment or give to charitable causes (38 percent versus 15 percent). • Credibility • Non-management employees are viewed as more credible than senior executives in relaying whether or not a U.S. company is operating in a socially responsible manner.

19. What It Tells Us • Americans expect companies to help solve pressing social issues in the communities in which they operate and define CSR expectations that go beyond just making charitable donations. • Americans continue to believe companies are not acting responsibly. • There appears to be at a “tipping point” with corporate behavior; so much so, that they are inclined to use government as a means by which to realign company priorities. • Look for external validation of company’s efforts. • The next election will reinforce this direction – not reverse it. • A majority of Americans now go online to learn more about CSR efforts – places where companies cannot control their message.

20. Implications • Ignore CSR at your own peril • Active engagement • Give employees a voice • Educate employees on impact of CSR – to the company and themselves

21. A New Kind of CorporateSocial Responsibility What You Can Do

22. Recommendations • Put a stake in the ground • Transparency of efforts • Quantify the impact both in time and money • Regularly communicate progress • Validate efforts • Credible third parties • Employees and retirees • Sustained communications • Ongoing dialogue – internal and external • Social media monitoring • 2.0 Web site

23. A New Kind of CorporateSocial Responsibility Terri Owen Senior Vice President & Partner of Internal Communications Phone: 314-982-8620 E-mail: terri.owen@fleishman.com Tony Calandro Senior Vice President & Partner of Public Affairs Phone: 314-982-8725 E-mail: tony.calandro@fleishman.com Visit the study online at www.csrresults.com.