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CEOs everywhere are on the hot seat, feeling increased pressure to run their firms in a way that makes them exemplary corporate citizens. And it's no wonder: the media and the public waste no time in attacking slip-ups in corporate behaviour; consumers show increasing willingness to punish corporations that they think are not being socially responsible; and employees are ever-less inclined to work for corporations that they think are not socially responsible.

Thanks to the Internet, over the past decade, social responsibility advocates have had no trouble pinpointing corporate actions they don't agree with; and if rebuffed by a corporation, they have been able to respond quickly and powerfully with effective campaigns. The tricky and frustrating thing for CEOs on the receiving end of these campaigns is that the sphere encompassing corporate citizenship has grown incredibly wide. To be socially responsible, corporations are being asked to do a wide variety of things: protect the environment in which they operate; adhere to strict standards of governance; take care of their employees; support their communities; promote health and wellness; support education; and more. To complicate matters, standard requirements for being considered "socially responsible" in each of these areas are ambiguous, at best.

The truth is, there are no widely-accepted standards for Corporate Social Responsibility (CSR). Some standards are beginning to emerge, such as the Global Reporting Initiative, the Global Compact, and the OECD Guidelines for Multinational Enterprises. However, none has gained anything close to wide acceptance, let alone widespread understanding of what they really mean.

Commentators, customers and employees calling for enhanced corporate citizenship have little or no advice for CEOs as to how to trade-off earning returns for their shareholders against performing acceptably-well across this wide array of CSR areas. They demand social responsibility, whatever exactly that means, but at the same time, performance at less-than-acceptable standards will be punished. And as we have seen, whether it be Royal Dutch Shell after the Brent Spar incident; Nike in the wake of Asian sweatshop allegations; or Arthur Anderson after Enron, the punishment can be harsh indeed.

Because the CSR universe is so broad, the standards high (yet ambiguously defined), and the economics mysterious, it is extremely difficult for a corporation to rebut an allegation of social irresponsibility. When Wal-Mart is assailed for allegedly engaging in sexuallydiscriminatory employee practices, it is no easy task for it to defend itself across its wider portfolio of activities. This one area tends to define Wal-Mart's overall irresponsibility in the minds of many commentators, customers and employees-whether rightly or wrongly.

Corporations need a way of getting out ahead of the CSR issue, or they risk either falling irretrievably behind, failing to earn the appropriate rewards for investing in citizenship, or both. The business world needs tools for thinking about CSR and a process for developing a comprehensive corporate citizenship strategy that can be carried out throughout a corporation and communicated to the outside world.

In 2004 Michael Lee-Chin, Chairman and CEO of AIC Limited, donated $10 million to the Rotman School for us to establish the AIC Institute for Corporate Citizenship. The purpose of the institute is to help business leaders better understand the changing role of their businesses in society and to develop new tools to help them make better decisions about corporate citizenship. Over time, we will create and disseminate an actionable model for making business decisions about corporate citizenship.

The research we are conducting aims to equip CEOs with an effective model that enables them to make a coherent set of choices that result in their corporations being seen as exemplary corporate citizens. Our analysis takes the perspective of a corporate CEO who wants to do the right thing, but doesn't know how. In taking this perspective, we are in no way suggesting that the many other facets of CSR are not useful and important. CSR work has many applications-from helping governments and NGOs think about the role of corporations in society, to providing ways for investors to think about the interests of the social good, to helping activists hold corporations accountable for bad behavior. These and other applications are all interesting and legitimate, but our focus and the creation of tools must begin somewhere.

In 2002 I put forward a tool for thinking about CSR that I designed to help CEOs think through the practical task of being an exemplary corporate citizen. The creation of the tool, the "Virtue Matrix", was motivated by the absence of thinking models that can help CEOs think through questions around CSR. In the next article in this series (which will appear in the May 9th issue) I will discuss how this tool can help CEOs calculate the return on CSR.