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Executive Speech

Remarks
Eva S. Hardy
Senior Vice President – Dominion
Chamber Goodwill Awards Program
Fredericksburg, Va.
Sept. 28, 2006

"Giving Back to the Community:
Why Philanthropy Makes Good Business Sense"

Thank you.  It’s my pleasure to join you today.

I want to thank Xavier Richardson for his kind introduction… and for inviting me to be your keynote speaker. 

I recall speaking at a luncheon program similar to this one a few years ago.  When the program chairman introduced me, he said:  "Ms. Hardy is our only speaker today.  When she finishes, we can relax and enjoy ourselves.  The rest of the program is going to be entertainment."

Somehow I don’t think that was exactly what he intended to say — but that’s what came out.

I’m quite sure that Xavier’s introduction didn’t lead anyone to believe that I am here to entertain, and for that I am grateful.

What I do want to do is tell you something about the way my company gives back to the community through the Dominion Foundation… and why we think corporate philanthropy makes good business sense.

Before I do that, however, I want to take a moment to thank Woody Van Valkenburgh and Rappahannock Goodwill Industries.. and Bob Hagan and the Fredericksburg Regional Chamber for co-hosting this awards program.

Dominion is a long-time friend and supporter of your organizations.  We appreciate your support of the business community and all you do for the citizens of East Central Virginia, many of whom are Dominion customers.

In an era tainted by corporate greed and scandal, good deeds are too easily overlooked.  So when someone shines a spotlight on members of the business community who have chosen to be good corporate citizens, that is definitely something to cheer about.

To you award nominees in the audience, I applaud you for your generosity and community spirit.  You are all winners, and you deserve the recognition you are receiving today.

I know I’m preaching to the choir when I say to this audience that business philanthropy and community involvement are good things.  But not everyone agrees with that point of view.

There is a school of thought that believes the only legitimate purpose of business is the creation of shareholder wealth.  A leading advocate of this view is Milton Friedman, the prominent economist. 

While teaching at the University of Chicago in 1970 he wrote:  "The one and only business of business is maximizing profit, playing within the rules of the game."

Contrast Mr. Friedman’s statement with one that hangs in the offices of Paul Newman’s food products company, "Newman’s Own." 

It reads:  "There are three rules for running a business; fortunately we don’t know any of them."

Newman’s food empire donates its profits — somewhere in the neighborhood of 150 million dollars — to charitable organizations.

At Dominion, we fall somewhere in between those two extremes.  We think Mr. Friedman’s position is a little too narrow and short-sighted.  Mr. Newman’s doesn’t work for us as an investor-owned company. 

I imagine most of you also come down somewhere between those two points of view — especially since you have chosen to share your resources with community-based non-profit groups.

Wherever you stand of the spectrum of opinion regarding philanthropy, I think we would all agree that the rules of the game have changed over the past 35 years — and they will continue to change. 

Since Milton Friedman made his case for the business of business being business, more and more companies have realized two things:

  • First, that maximizing profits and growing shareholder value require a long-term perspective;
  • And second, that doing what is "socially responsible" is not just do-gooder window dressing or slick PR; rather, it is enlightened self-interest that helps ensure the firm’s long-term viability — without which there could be no profits or shareholder value whatsoever.

Dominion, for instance, has a fundamental connection to the community.  We are linked in a very literal way through the pipes and wires that deliver natural gas and electricity to our customers.

We have a strong local presence wherever we do business by virtue of the products we sell.  They are the lifeblood of everyday life.  We try to strengthen that presence by being a good employer, a good neighbor, a good community advocate and a good environmental steward.

For example, because we are an energy company providing a vital public service, we devote significant resources to EnergyShare, a program you are probably familiar with.  It is Dominion’s fuel assistance program, and it helps needy families pay their winter heating bills.  This winter will be EnergyShare’s 24th year serving our neediest customers.

Now let’s focus on the subject of philanthropy — which comes from two Greek words meaning "love for mankind."  Philanthropy is a very important aspect of the partnerships that Dominion has long nourished with the communities we serve.

Through the Dominion Foundation, we channel more than $10 million a year to health and human services providers, community development groups, environmental organizations and cultural and educational institutions.

The grants we make go to support food banks, homeless shelters and feeding programs… improve educational instruction in math, science and technology… upgrade cultural outreach efforts in the performing arts… and protect valuable land and wildlife habitat with the help of organizations such as The Nature Conservancy.

Dominion also has a matching funds program to encourage our 18,000 employees to support eligible cultural, educational and charitable causes.

And our employee volunteers are some of the best people you will ever meet.  With the full backing of senior management, they donate thousands of hours of time each year to a broad range of community initiatives — home repair for the elderly… Habitat for Humanity projects… mentoring with Big Brothers and Sisters… and March of Dimes Walk-A-Thons, to mention only a few.

Programs that target children, families and education are a top priority for our volunteers.

Just last month, a team of Dominion volunteers from the North Anna Power Station worked with officials at Livingston Elementary in Spotsylvania to build a greenhouse and butterfly garden on the school grounds. 

Dominion donated $5 thousand toward the cost of the project, and our volunteers spent one entire day building the greenhouse and landscaping around it.  Now the school has an outdoor learning center where the kids can picnic – and learn something while they’re at it.

Education and historic preservation are closely related, and they are major areas of focus in our corporate giving program.  This is Virginia, after all.

The Commonwealth’s presidential heritage is extremely rich, and Dominion has made a point of supporting it.  We are providing significant dollars to help fund educational outreach programs at Mt. Vernon and Thomas Jefferson’s Poplar Forest retreat in Bedford County, as well as the ongoing restoration of James Madison’s Montpelier home.

Here in the Fredericksburg area, we have provided grants to Kenmore Plantation and George Washington’s Ferry Farm in Stafford County, where important archeological work is being done.

Just up the road in Prince William County, Dominion was among the first companies to come forward with seed money for the new Belmont Bay Science Center. And we are lending our support to the National Slavery Museum here in Fredericksburg and to the new Marine Corps museum up in Quantico.

You may have seen the article that appeared recently in The Free-Lance Star about a Dominion Foundation grant to Widewater Elementary in Stafford County.  The money will be used to fund an after-school program for disadvantaged students.  It’s part of a competitive educational grants program that awards $220,000 to schools in six states where Dominion does business.

Those are just some of the many community initiatives we are involved with in the Fredericksburg region. We support them because we know that healthy, vibrant communities are essential to the long-term success of our business.

That’s also why we are active partners with local and regional economic development agencies, such as the Chamber of Commerce and the Fredericksburg Regional Alliance. 

Bob Hagan, Gene Bailey and others are doing a great job of promoting strong job growth in this area.  Gene Bailey, president of the Fredericksburg Regional Alliance was not able to be here today because he is in China on a marketing trip.  That’s what I call going the extra mile to recruit new businesses.

New companies bring with them jobs and resources — and potentially more philanthropic support for the community.  You may have heard about GEICO creating 800 new jobs here… seen the new state Visitor’s Center under construction along 1-95… and read about the 5,000 to 6,000 new defense-related jobs that will be coming to the region over the next five years.

Those are all signs of a region that is poised for solid economic growth.  And when the business community is growing, opportunities to make a difference in the larger community grow, too.

It boils down to this:  Business philanthropy is fundamentally about building long-term relationships and valuable linkages with stakeholders.

When the number crunchers who watch over the bottom line come to me for quantifiable results and hard data — and they always do, God love them — I challenge them to put a price tag on the credibility, trust and goodwill we earn by being active participants in the life of the community.

They usually roll their eyes at me in dismay. They know they can’t because credibility is priceless.  It simply can’t be measured in dollars and cents.  If they still want to argue about it, I tell them the story about the big company that shows up in the public arena only when it has bad news to announce — and there are plenty of real-world examples to draw from in the energy industry… pharmaceuticals… tobacco… on and on.

Those companies shouldn’t expect to be greeted with open arms or a warm reception from the community.  They will learn, sooner or later, that there are real costs to be paid for poor or non-existent community relations — things like higher legal fees… lower customer satisfaction… or costly new regulations and laws governing their business, not to mention the negative media coverage they will receive.

At that point, the number crunchers typically shrug their shoulders and go back to their profit and loss statements, hoping not to see me again until the same time next year.  Or not.

Please don’t get me wrong.  I fully embrace shareholder value as a necessary and fundamental objective of business.  My CEO would fire me if I didn’t.  But it is not a sufficiently comprehensive worldview for the complex times we live in.

Dominion’s customers, for example, want all the modern bells and whistles:  24-hour, 7-day-a-week customer service… perfect power quality and reliability… web-based services and technologies… automatic meter reading.

But they also seem to want the old-fashioned utility — the company that supports the local YMCA capital campaign and buys lunches for the Monday get-together of the Chamber of Commerce.

We can do both — and we do.  It’s what our customers expect.  It’s part of what I call the implicit "social contract" that exists between business and society. 

This contract has obligations, opportunities and benefits for both sides.  It’s not written in law anywhere but that doesn’t make it any less powerful.  It’s part of America’s collective psyche and shared history, if you will. 

Experience has taught us that governments cannot fund all the social programs our citizens need and want.  Nor can individuals.  There simply aren’t enough Bill Gates’ or Warren Buffetts around to do the job.

That leaves business to fill in the gaps.  And modern society has come to expect the business community to respond when social problems remain unresolved. 

Companies that turn a deaf ear to society’s call for help become vulnerable to attack.  They are actually putting millions or even billions of dollars of shareholder value at risk, as I alluded to earlier.

In my view, businesses that adopt a long-term perspective and understand the value of sustained community involvement and investment are the ones that will gain strategic advantage and do the best job of protecting shareholder interests.

I leave you with the words of our 35th president, John F. Kennedy, who said:  "If we who have cannot help those who have not, then we cannot help ourselves."

That’s the best, most succinct description of enlightened self-interest I’ve ever heard.  It’s what business philanthropy is all about.

Once again, my thanks and best wishes.  Keep giving to your community.  It’s good business — and it’s the right thing to do.

NYSE : (April 16, 2014) D 71.24 0.67

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