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Chairman’s Letter

A commitment to corporate responsibility pervades IBM, from new hires to the chairman’s office. In this year’s letter, Chairman, President and Chief Executive Officer Sam Palmisano describes IBM’s long-term approach to corporate responsibility, and the IBMers that make it possible.

IBM’s Approach

Through the years, IBM has consistently expanded the definition of corporate citizenship, pushing the boundaries of what is required to be considered a responsible enterprise. In this section of IBM’s 2010 Corporate Responsibility Report, you will find more detail on our approach to corporate responsibility, and some examples of how that approach manifested itself during the past year.

Communities

At IBM we engage with communities around the world by offering our technology, services and expertise to help solve some of the world’s most complex problems. While the monetary value of these contributions is great, we eschew checkbook philanthropy whenever possible. We believe that this approach is the most efficient, effective and sustainable way to practice good corporate citizenship. And we believe it is helping to make the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the contributions IBM made to the global community this past year.

The IBMer

For the last 100 years, IBM has pioneered innovative approaches to hiring, managing and retaining our work force. From some of the earliest thinking on work force diversity to progressive programs for employee well-being and leadership development, this ongoing commitment to our employees is critical to the success of IBM and IBMers. And as the nature of our business changes, we will continue to apply the same innovation and creativity we use to develop products and services to our relationship with employees. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the commitments IBM made to its work force this past year.

Environment

IBM has long maintained an unwavering commitment to environmental protection, which was formalized by a corporate environmental policy in 1971. The policy calls for IBM to be an environmental leader across all of our business activities, from our research, operations and products to the services and solutions we provide our clients to help them be more protective of the environment. Download this section of the report (2.2MB)

Supply Chain

IBM manages a supply chain of more than 27,000 suppliers in nearly 100 different countries. We understand that managing a supply chain of this size carries with it considerable social responsibility. Even so, we are continually expanding the definition of what it means to run a responsible supply chain, challenging ourselves and our suppliers to reach ever higher standards of social and environmental compliance. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of IBM’s supply chain responsibility efforts over the past year.

Governance,
Ethics and Integrity

Both the size and nature of IBM’s business necessitate that it adhere to the highest standards of conduct. IBM employs more than 400,000 employees, and provides services and technology that support businesses, governments, schools, hospitals and highways. As such, integrity, transparency, privacy and risk management are all crucial parts of our business, and our commitment to making the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of how IBM is setting the modern standard for business ethics.

An Enduring Commitment to Service

On June 16, 2011, IBM will celebrate its 100th anniversary as a corporation. Of all the things we will do to mark this momentous occasion, the fullest and most visible expression of our company will not be a video, a book, an exhibit or an advertisement. Rather, it will be a global Celebration of Service in which IBMers will be encouraged to get out into their communities and devote at least eight hours to applying our expertise to civic challenges and societal needs.

Why such a focus on service? For 100 years, service and volunteerism have been essential elements of what it means to be an IBMer. Creating a culture of service has always been a central part of our corporate citizenship efforts. We believe this culture benefits IBM, IBMers and their communities on multiple levels: it helps us express IBM’s brand and values to the world; it allows IBMers to give back to their communities, apply their skills in meaningful ways, and gain new skills; and it improves our employee satisfaction, attraction and retention rates.

At any given time, there may be as many as 160,000 IBMers involved in community service efforts around the world, engaged in projects that range from working with mayors of major cities to improve urban quality of life to teaching science, math and engineering to local high school students. But this year IBM is aiming for 100 percent participation, with all 400,000 IBMers donating at least one day to community service.

100%

of more than 400,000 IBMers are expected to donate at least one day of service, a commitment of over 3,200,000 hours.

Redefining Service for the 21st Century: IBM’s Service Jam

To lay the groundwork for IBM’s Celebration of Service, we conducted an online brainstorming event in October 2010. In many ways, it confirmed and expanded IBM’s strategies for service and corporate citizenship. Service Jam brought together thousands of experts from not-for-profit organizations, corporations, academic institutions and government agencies across ideology and geography. The intent of the Jam was to begin a global conversation about how we can collectively improve the delivery of service in the 21st century. View the complete results in the Service Jam White Paper (pdf).

Service Jam found that while there are many positive examples of programs and projects that provide invaluable services to people in need, the global service community as a whole could function better—i.e., it could serve more people—if it improved in four key areas.

  1. Cultivate a culture of service through education.

    Make service and project-based learning part of the educational curriculum to develop more professionals who can conceive, execute and deliver service programs. To help achieve this goal, IBM will convene a group of leaders from the private sector, governments and not-for-profits to work with an education reform organization to help make service learning an integral part of evolving national academic standards in the United States.

  2. Recruit, develop and retain volunteers.

    Develop a more thoughtful, structured approach to the recruitment, development, management and retention of volunteers around the world. This includes a more disciplined process for matching supply and demand, professionalizing the role of the volunteer manager, and developing the right volunteer incentives and rewards. For its part, IBM will create and package solutions that leverage the company’s project management methodologies to help not-for-profits prepare to receive volunteers, and corporations to offer them. The solution will be offered by IBMers around the world.

  3. Build the foundations of successful collaboration.

    Successful partnerships require careful planning, common goals and rigorous management. They are not simply mergers designed to share resources and reduce costs. Not-for-profits, the private sector and governments must develop more structure and discipline in how they approach and develop partnerships.

  4. Improve the science of measuring impact and evaluating social return.

    Measuring the success of service is difficult today because there are no agreed-upon standards. Choosing the right metrics will be vitally important. IBM will donate technology and resources to the collaborative development of a Web-based social return on investment (SROI) measurement tool that will help define service indicators that not-for-profits can use to measure success.

Like the Service Jam itself, each of these efforts will be conducted in the spirit of open collaboration. And each will be designed to deliver on the promise of the Jam: to provide better service to the people who most need it.

12 million

hours of volunteer service logged by 177,000 IBM employees at the On Demand Community Web site.

IBM’s Centennial Celebration of Service

IBM’s Centennial Celebration of Service will reflect IBM’s history of societal responsibility while showcasing our strategy for service and citizenship in the 21st century. The Celebration of Service will serve as a model for the type of coordinated system described in the Service Jam.

The Celebration of Service builds on the enthusiasm and innovative spirit of IBMers who already perform service in extraordinary numbers. Many of them do this through IBM’s online service portal called On Demand Community. Launched in November 2003, On Demand Community enables IBMers to find volunteer activities and identify skills and expertise they can contribute to a cause. It equips volunteers to empower community organizations with better project management skills, show them how to develop technology strategies, and more. Volunteers also use On Demand Community resources to visit classrooms, sharing their expertise and enthusiasm for science and technology with students around the world. Since its launch, more than 170,000 IBM employees and retirees have registered at the site and logged well over 12 million hours of volunteer service.

To extend that example of volunteerism to IBM’s entire work force, the Celebration of Service will build on established volunteer programs, recruit new service leaders and work with additional outside organizations. This will generate a range of projects—based on IBMers’ extraordinary professional skills—that exemplify our brand, demonstrate our values and help our communities work better.

Throughout 2011, all IBMers will be encouraged to perform a minimum of eight hours of service in their communities—especially on June 15, 2011, the day before the actual date of the Centennial. IBMers can develop a unique service project that speaks to them personally, or they can select from a range of pre-packaged projects that marry IBM’s competencies with community issues. All volunteer opportunities and complete information on IBM’s Celebration of Service activities can be found on the enriched On Demand Community portal, which launched in January 2011, in conjunction with the overall Centennial Web site.

The redesigned portal will include everything IBMers need to get started, including:

The Service Pledge

The official first step in the year of service, the Centennial Service Pledge invites IBMers and the public to make an online pledge of eight or more hours of community service to be completed in 2011. Pledges in addition to hours tracked by On Demand Community will reflect the overall participation in service throughout the year.

New Grants

$12 million in grants are available to support IBMers worldwide in their 2011 Celebration of Service. There are three types of grants: Community Grants, Catalyst Grants and Centennial Grants.

  • Community Grants are awards of $500 to $5,000 in cash or $1,000 to $7,500 in technology for individual or team projects that give back to the community, with or without the use of an IBM solution or technology.
  • Catalyst Grants are $10,000 cash grants for projects that focus on skills-based activities (i.e., professional skills that are typical of what IBMers possess) or that support local sustainability issues. Projects must have 100 or more people, at least 50 percent of whom must be IBM employees and/or retirees. There are 100 Catalyst Grants available in 2011, and they will be awarded based on a competitive review process by a small regional team.
  • Centennial Grants are cash grants of up to $100,000 for projects that exemplify “smarter” components (i.e., intelligent, instrumented and interconnected) and demonstrate an ability to make the world work better. There are 10 Centennial Grants available in 2011. Up to 30 finalists will be selected in a competitive review and showcased on the Centennial site. (Applications must be submitted by June 15. Winners will be announced during the third quarter.)
$12 million

available in IBM grants to help IBMers impact their communities in 2011.

Activity Kits

Activity Kits, new resources designed especially for the Centennial Celebration of Service, provide volunteers with “grab-and-go” service ideas to help them get engaged quickly and easily. A planned 18 Activity Kits will be shared and available to the public on IBM100. Each kit contains concise instructions for successfully delivering popular service solutions.

Service Models

Service Models are a structured way for IBMers to develop new service projects. The seven different types of service projects are:

  • Smarter Service Projects, which focus on increasing understanding of, and participation in, IBM’s Smarter Planet strategy. A successful Smarter Service Project will demonstrate IBM’s commitment to a community and identify local, skills-based team projects.
  • Client or Business Partner Joint Projects, which enhance IBM’s client and business partner relationships by mutually identifying and supporting local service projects. These projects will provide benefit to the community and an opportunity for client and IBM teams to work collaboratively.
  • National/Regional Partner Team Projects, which are created by national/regional partner organizations in collaboration with a liaison from IBM’s Corporate Citizenship organization. The partner develops the framework and activities, and delivers them to local chapters/organizations for single large-scale, skills-based team projects.
  • IBM Program Expansion Projects, which enhance existing IBM-sponsored programs (e.g., KidSmart, eWeek, Technology Camps, Diversity Network Groups, Corporate Service Corps, etc.). The program sponsor will also provide new input and ideas for individual or team skills-based service projects.
  • Virtual Volunteering Projects, which use collaboration technologies to share IBMers’ skills remotely with a community partner. Teams will provide leadership and expertise to identify a need and complete a project.
  • Team Projects, which are typically executed at a local community partner’s location. Teams will provide leadership and expertise to identify need and complete a project. Through this opportunity, IBMers will raise awareness of local societal issues and ways to get involved.
  • Individual Projects, in which IBMers will support a volunteer effort of their choice. Projects are ideally skills-based and likely performed locally with a community partner.

Service Leader Resources

IBMers are encouraged to become Service Leaders, a unique volunteer experience opportunity for those who are already passionate about volunteering and want to offer their project idea and their enthusiasm to others. Significant investment has been made in developing extensive Service Leaders training modules to ensure these highly motivated volunteers are equipped and ready to organize and lead projects and to encourage clients, business partners and family members to participate.

Social Media

On Demand Community provides instructions on how IBMers can utilize social networking to encourage others to be part of the Celebration of Service, as well as to help them to organize and promote their service activities in a coordinated way that uses IBM’s digital strategy to extend the brand.

IBM’s global Celebration of Service will be a highlight of our Centennial year. It will build upon IBM’s proud history of societal responsibility while showcasing our strategy for service and citizenship in the 21st century. By collectively donating their skills and expertise, IBMers will help solve local challenges and demonstrate IBM’s brand and values to communities, governments and partner organizations. Together, we will show that this is a company that has consistently aimed to make the world work better through service.

Learn more about IBM’s celebration of a century of social engagement. Celebration of Service

Learn more about IBM’s celebration of a century of social engagement.

Employee Donations and Programs

IBM teams with employees to support organizations and causes in the communities where they live and work. Community-level grant making and extensive volunteer programs help our employees become personally involved in community projects.

Employee Charitable Contributions Campaign

The annual Employee Charitable Contributions Campaign (ECCC) in the U.S. provides employees with an opportunity to contribute to nearly 10,000 community organizations. These organizations offer a wide array of services, including environmental, cultural, health and human services, literacy, and disaster relief. The 2010 ECCC generated more than $36 million in support to communities in the U.S. The Employee Charitable Fund program in Canada provided almost $3 million in contributions to Canadian organizations. IBM salutes the generosity of its employees and is proud to provide these programs to assist them in support of their communities.

$36 million

in employee contributions to the Employee Charitable Contributions Campaign in 2010.

Matching Grants

The IBM Matching Grants program enables employees and retirees to increase the value of their donations to educational institutions, hospitals, hospices, nursing homes, and cultural and environmental organizations with a matching gift from IBM. The recipient organization can choose to receive its gift in the form of either cash or IBM equipment. Hundreds of educational institutions and thousands of not-for-profit organizations have benefited from contributions by IBM and our employees through this program. Recipients of IBM Matching Grants are a varied group that includes the Nature Conservancy, Memorial Sloan-Kettering Cancer Center, the Educational Broadcasting Corporation, the Metropolitan Opera, the University of North Carolina and Yale University. In 2010, 5,703 organizations received grants with a value of $14.5 million.

$14.5 million

in grants through IBM’s Matching Grants program to 5,703 organizations in 2010.

Community Grants

IBM Community Grants support employees and retirees who regularly volunteer with not-for-profit organizations. When IBM volunteers work with eligible community organizations for 40 hours over a five-month period, the organization becomes eligible for either a cash or equipment grant. Grants begin at $500 and may be higher if the IBM volunteer uses solutions from the IBM On Demand Community, or if IBM volunteers work in teams. Organizations may receive one Community grant per calendar year. In 2010, community organizations received grants with a value of $2.7 million through IBM Community Grants.

$2.7 million

in IBM Community Grants to community organizations in 2010.