DISCUSSION Companies need to focus on values, behaviour and sustainability, says London forum

by Yolanda Villafuerte _______15th December 2010
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by Michael Smith

Underlying the financial crisis is a crisis of value and of values,’ asserted Tony Manwaring, Chief Executive of the London-based ‘think-and-do-tank’ Tomorrow’s Company. He was chairing a ‘Tomorrow’s Values’ reception held in the House of Lords on 17 November, organised by the Chartered Institute of Management Accountants (CIMA) and Tomorrow’s Company.
Anant Nadkarni, Lord Simon Haskel and Malcolm Lane of Tata Consultancy Services (Photo: Shreeram Nadkarni)

The City of London had to earn the public’s confidence and trust following the financial crisis, at a time when banks’ toxic debt was still ‘coming out of the woodwork’ such as in Ireland, Manwaring said. There was a need to ‘redefine our thinking beyond the triple bottom line’ of financial, social and environmental reporting.

Hosting the event, Lord Simon Haskel, a deputy speaker of the House of Lords who is a former Leeds textile industrialist, emphasized the need to gain ‘value for money’ from the public sector so as to benefit society as a whole. He added that ‘there is more to life than making money’.

He and Manwaring were setting the scene for the main speakers, David Phillips, senior reporting partner at PricewaterhouseCoopers, and Anant Nadkarni, Vice-President of the Tata Council for Community Initiatives, from India.

Phillips, who is the co-author of The values reporting revolution, said that ‘we are still dominated by a piece of the jigsaw from the last century: GDP, profit and financial returns.’ While financial reporting was very important, ‘companies needed to move away from the obsessive path of financial outcomes’ and think about ‘behavioural influence’, sustainability and ‘the future of the planet’. This was why the Dean of Harvard’s business school had recently said that ‘the biggest issue facing business is trust’, Phillips said.

David Phillips of PricewaterhouseCoopers (Photo: Shreeram Nadkarni)

He suggested that ‘the most valuable customer is not the one who generates the maximum income but the one who helps to challenge and change your organisation.’ Reporting was still ‘stuck in a time warp’, he said. ‘Whatever we do we have to think of the behavioural influence– what makes us all tick.’

But he was also ‘more optimistic about change than I’ve ever been’, thank to the launch of a new International Integrated Reporting Committee. Launched in August, its remit is ‘to create a globally accepted framework for accounting for sustainability’.

Anant Nadkarni emphasised the need to move to ‘the next level of sustainability, no matter how one prefers to call it.’ Sustainability was at the heart of the Tata ethos but the values that underlie it had to be ‘co-created’, as they often lay in people’s collective opinions. ‘We need to work with people at all times’ in order to ‘be the change’, he said. ‘Change starts with me.’

Anant Nadkarni, Tata Council for Community Initiatives (Photo: Shreeram Nadkarni)
Nadkarni emphasised Tata’s culture and legacy of volunteering, such as service and care for the underprivileged in rural and urban areas. He said that this aspect was being organized better in recent times. Over 38,000 employees volunteer approximately two hours of their time each week. While this is a huge contribution to society anyway, he also pointed out that ‘when a critical mass of people is volunteering by temperament, they demonstrate more pro-activity. This gradually puts the whole organization in an anticipatory mode. It addresses social risks and creates new opportunities.’ Moreover, ‘volunteering equals future talent,’ he said.

Tata’s has pioneered a corporate Index for Sustainable Human Development–believed to be the first corporation in the world to do so–and the United Nations Development Programme is now seeking with Tata’s to ‘take it to the next level’, Nadkarni said.

Tony Manwaring said that Tata’s had ‘some of the most profound insights that we have come across’, including its ownership structure. Sixty per cent of the corporation is owned by its charitable trusts.

The Chief Executive of CIMA, Charles Tilley, said that population grown is driving the sustainability issue. While G20 governments had to oversee the preservation of the world’s fish stocks, rainforests and fresh water supplies, the two important words for corporate boards are ‘long term’. Good businesses were aware of this, ‘but we have to address the laggards,’ he said. Long-term thinking included the sustainability of the supply chain, such as fuel efficient delivery trucks.

When it came to building trust, ‘we’ve got to do the right thing when no one is looking,’ he said. He compared this to a golfer not being tempted to take an unseen second shot in a bunker. ‘That is so unprofessional,’ he said. ‘Business has to be a good citizen wherever it is working.’

Concluding, Lord Haskel said that ‘value creation is an output of creating good, sustainable, long-term business.’

This blog post can also be read here.

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