Date: 03/04/12 Duration: 00:23:25
In this podcast Marcus Jamieson-Pond, director of Three Legged Stool and Founder of the Convergence Network; Mark Wakefield, Corporate Citizenship & Corporate Affairs Manager at IBM UK; and Marie Sigsworth, Group CR Director at Aviva look at corporate responsibility, its history and its future now that we are in leaner times and have a crisis of trust.
Philippa Lamb: Since the 1990s corporate responsibility has become firmly rooted in all sorts of businesses but now we’re in leaner years and there's a crisis of trust in business. So where does that leave corporate responsibility and what does a more responsible approach to business actually look like these days? Joining me in the debate today we have industry experts Marcus Jamieson-Pond who’s director of Three Legged Stool and Founder of the Convergence Network. Mark Wakefield is Corporate Citizenship & Corporate Affairs Manager at IBM UK. And Marie Sigsworth is Group CR Director at Aviva.
Now Marcus as I've said we’ve seen a lot of organisations put a lot of money into CSR in the 90s, the good years of the early 2000s but in the banking crisis even those banks with good CR suffered reputational damage and BP suffered when it had its oil crisis, regardless of the money they'd put into that, is that money actually earning it’s place in the budget?
Marcus Jamieson-Pond: Well it’s interesting when first worked in CSR which was five or six years ago my first role as a CSR manager, I had no budget at all and I was given the brief 'if you want to do things go out and find the money from elsewhere'. So I think it can be done on a fairly lean budget but obviously there has been huge investments over the last few years that various businesses have made in CSR. I think it’s certainly raised awareness. Obviously times are tough now and I think it’s fair to say that a lot of businesses are retrenching and as a result of that budgets are being cut.
PL: Yeah. I mean as you say in straitened times there's always a temptation to regard things like this as marginal isn’t there? Are you seeing that a lot?
M J-P: I think so although I always had the belief that a business would never throw away its values, even when times are tough, and in many respects CSR is all about managing the values of the business.
PL: And Marie would you say there's an argument for saying that corporate responsibility is even more important now than in the good times? You know, this widening gulf between rich and poor, trust in companies is at an all-time low.
Marie Sigsworth: Absolutely I agree with that. I think the comment about retrenching budgets, we’ve found we’ve invested more in our CR budget, certainly over the last year more has been invested in CR but that's because we’re increasingly making it part of the business and so making it part of our business strategy and embedding it in our business strategy, so it’s become part of who we are and what we do so actually to be a responsible business and in the bad times that's very, very important to make sure that you are acting responsibly so your business is sustainable for the long term, that's what your customers need, that's what’s important.
PL: So that strategy of embedding it as a core activity rather than an add on presumably that springs from the idea that societal expectations are changing?
MS: Yes I guess so I think one of the things that we focus on, one of our material issues, what’s important to us as a business is building trust and being transparent in the way that we operate so again that's a societal issue, something that we’ve seen over the last few years becoming more and more of an issue, so we’re very much focusing on that and our CR strategy focuses on that in particular.
PL: And we should probably make clear at this point we’re talking about a whole range of stakeholders here aren’t we?
PL: Not just investors?
MS: No absolutely not at just investors. So we work with both our supply chain, investors yes, our employees, our customers and governments around the world.
PL: And potential employers presumably as well?
MS: Yes absolutely attracting and retaining talent, again a very important part of what the CR team is there to do but that also makes the link, very important link, with the HR team as well.
PL: Yes we’ll come back to that later. I want to ask Mark, I don't know whether you've seen that research from the Institute of Business Ethics, but they take the view that companies that take ethics seriously have a measurable competitive advantage. This isn’t just touchy, feely niceness, they outperform the others in terms of stock market and accounting performance, now why do you think that is?
Mark Wakefield: Certain our CFO globally would aspire and agree to that statement. He believes that corporate social responsibility or corporate citizenship, as we call it, contributes directly to the bottom line and I think when we look at corporate responsibility it’s not just about reputation it is about managing some of the risks that you as a business face, but it’s also about new business opportunities and I think there's increasing evidence in businesses that if they manage their corporate citizenship effectively then that throws up new market opportunities as well as demonstrating that you're a business worth working with.
PL: Is it also something about the mind-set of the people at the top of the business that perhaps CEOs who will invest in this idea are CEOs who take a longer term view anyway?
MW: Certainly the investment analyst community would regard effect corporate social responsibility as being a good proxy indicator of management effectiveness, so if the leadership at the top buy into it, endorse it, support it and are seen to really live it, it’s not just a question of espousing it but actually living the values, living the strategy, practising it, communicating it, then yes that gives you some confidence that the business that you’re working with is a well-managed organisation.
PL: Is that the experience of all of you that investors are really taking this view now?
MS: Yes very much so I mean we meet regularly, or I meet regularly with investors in Aviva, institutional investors in Aviva talking to them about what we’re doing on this agenda and how we are embedding it in our business and they are increasingly interested in how the company is responding to the environment which it finds itself in. So I think yes very important for our investors. We also, two years ago, put our CR report to the vote at the AGM an advisory vote at our AGM and again that was designed to get feedback from not only investors but also the broader marketplace in terms of what we were doing, were we doing the right things, were we focusing on the right things to make Aviva a sustainable business?
MW: And it really just comes down to the simple question of is this a business that you want to do business with? Do you trust them? Do you share their values? Do they have the values that you aspire to? And let us not forget that in terms of our employees we talk about society as though it’s something different and separate from our organisations, our employees are part of society, they need and want exactly the same things as everybody else, they want good healthcare systems, they want good education, good transportation system, all of those things that the rest of our communities aspire to so why wouldn’t we want to invest in that?
M J-P: And I think as well investors are obviously looking for a long term return and they will get that if they’re investing in businesses that will be around so it makes perfect business sense to try to be sustainable in that respect.
PL: It’s interesting that companies are getting more strident, bolder about this, you know we had that quote from the CEO at Unilever saying that if you don’t buy into a long term value creation model that's equitable, shared, sustainable, don’t invest with us. Now that's a really surprising comment isn’t it, we wouldn’t have had that five years ago would we?
MW: I think it’s probably a sentiment that certainly was thought about quite a lot five years ago but clearly the challenge of responding to the expectations of the stock market and investors’ expectations which tend to be quite short term have become very much more prominent in recent years with the financial crisis and the challenge that businesses face. So it’s probably little surprise that CEOs are articulating that broader vision a little more prominently than they used to.
MS: Yeah and I guess also that CEOs are talking about their businesses in a different way, so actually they’re talking about their products and the services that they offer to customers through a different lens and you could say that's through a CR lens but actually, again, talking about their businesses and what makes them sustainable to attract investment. but also to be there for their customers in the long term, they’ve found that that's an important thing to do in good times and in bad.
MW: I think that's true and I certainly for IBM we have long held the belief that we’re not only a company that's there to make a profit, which absolutely is critical but we’re a company that's there trying to make a difference in the world and we have that joint responsibility so that concept which is now being talked about of corporate social value of that responsibility and that impact which goes beyond the bottom line%2