A champion of corporate social responsibility and founder of the Great Leaders Conference talks about what makes good business.

A “tsunami” is the term Ann Charles uses to describe the sea change at hand as the demands of “corporate social responsibility” (CSR) wash away old norms of doing business. “There has always been a false choice between maximizing profitability and maximizing social responsibility,” says Charles, CEO of BRANDfog (a branding consultancy firm) and founder of the Great Leaders Conference.

The bottom line, she says, is that customers prefer to buy from companies that have a reputation for being socially responsible. To that end, she claims that cutting CSR programs in a recession is wrongheaded. In fact, she says, stocks of CSR-indexed companies are outperforming those of non-CSR companies.

We sat down with Charles to get her take on what companies are – or could be – doing right in the realm of social responsibility.

What inspired the Great Leaders Conference?

The Great Leaders Conference was inspired by what I see as the changing culture of leadership in business. There are three trends driving this change. The first is the economic collapse, which has made both Wall Street and Main Street become more thoughtful about the real goal of business in society. Many have started to question whether the pursuit of short-term quarterly profits to the exclusion of all else is really the best way to fuel economic and business growth. The second is the green movement, which has led companies to think about what kind of impact their business is having on the environment. The third is social media, which has blown the doors off the ‘closed’ corporate culture of the past and forced C-Suite executives (note: the most important senior executives within a corporation) to engage with customers and constituents about the core values of the brand. These trends made me realize that we need to have a high-level discussion about leadership in today’s world. I selected CEOs and other leaders who exemplify the principles that giving back and doing good is not only the right thing to do, but it’s good for business. A new social contract has emerged, where companies have greater responsibility to their employees and the communities in which they do business outside of paying taxes and making profits.

The conference is invitation-only for C-suite execs, but what are the takeaway messages for those of us who won’t be attending?

We are focusing on a C-Suite and senior executive audience, in order to promote conversations about CSR among current business leadership with the hope of driving change. However, we will have press at the event to help tell these stories, and video will be made available on the Great Leaders website to share after the event. In partnership with NYU, we will also be making a block of student passes available to include “future leaders” in this important event.

You’ve referred to the sea change of corporate social responsibility for companies as a “tsunami” that’s coming. Can you elaborate?

I like to say that CSR is a tsunami that will wash over all of business and change everything. It’s important to understand the impact that embracing corporate social responsibility can have on the culture of leadership in this country. This change has already started. Business Schools and Law Schools are now starting to integrate CSR into their curriculums. The University of California Berkeley is now offering an MBA program in CSR. Last year Harvard announced the MBA Oath, a voluntary student-led pledge that the goal of a business manager is to “serve the greater good.” This is long-term thinking that will pay off for the betterment of future leaders.

Studies are also showing that CSR is a “Talent Magnet, a Sales Magnet, and Investor Magnet.” New graduates and many of those downsized in the past couple of years are now looking to work for companies with good reputations for social responsibility, specifically seeking “caring and ethical” employers. Customers are stating that they are willing to pay a premium for goods from socially responsible companies. When the change starts to affect sales and the almighty dollar, companies will sit up and take notice.

In a recession, some companies may feel that cutting down on investing in socially responsible programs will help their bottom line. Is there evidence to the contrary?

When CSR is done right and in alignment with the company culture and DNA, it adds to the bottom line and to the future sustainability and success of the organization. Xerox has created a program to promote science education for girls, which will ultimately help Xerox from a talent pool perspective. That is a win for everybody. For years, Timberland’s CEO Jeff Swartz has galvanized companies in the footwear business to pull together to recycle rubber from shoe production, and to reduce waste. Timberland’s Earthkeepers shoes can be disassembled so components can be recycled into new materials and shoe parts. This activity is not only good for efficiencies; it also benefits Timberland as the shoe industry becomes more productive and earth-friendly. In bad economic times, inspired leaders will think of other areas to cut, and CSR is a growth opportunity for business.

Can you point to some particularly innovative examples of companies involved in social giving, advocacy and innovation?

AT&T has a wonderful program working to curb the high-school dropout issue. With about 50% of African Americans and Hispanics dropping out of high school, the impact on the labor pool causes a real threat to AT&T being able to maintain a talented and diverse labor force. They launched a $100 million “Aspire” program focused on providing job-shadowing opportunities for 100,000 high school students. AT&T knows this is good for their own future success and an especially good way to turn the tide on a negative trend.