Expanding the Space
For companies to fulfil the purpose we have set out, they not only have to be clear about their purpose but also adopt a stronger and more proactive role in society. They need to take the initiative and use their creativity and innovation to deliver long-term value by making a lasting difference to society whilst managing the expectations of stakeholders through the short-term.
We believe that companies can work towards this position of strength by ‘expanding the space’ in which they operate.
‘Expanding the space’ involves three key actions for tomorrow’s global company:
- Redefining success - defining and measuring success in a way that aligns and integrates the social, environmental, human and financial aspects of their work to inform their business strategy and boardroom decision making;
- Embedding values - a company must define, live by and be judged by the values it publicly espouses and apply them rigorously in challenging practical situations; and
- Creating frameworks - supporting sound national regulatory frameworks and international agreements, working with governments, NGOs and others to create such frameworks, rather than resisting them.
This is not about philanthropy or companies being seen to be ‘doing good’. These are actions that serve the long-term interests of any company.Individual companies can only do so much on their own. But if they act as a group and speak with one voice, they can create mutual advantage between the business community, governments and public and become catalysts for action by all concerned.
Redefining success
Tomorrow’s global company should expand its view of success and redefine it in terms of lasting positive impacts for business, society and the environment.
Having redefined success, tomorrow’s global business leaders should stand firmly behind their convictions and use them as a basis for their business strategy and decision making.
Internal processes, especially measurement and reporting and external communications with all stakeholders, need to be consistent with this view of success.
Embedding values
Shared values are essential to provide cohesion in a company that is global and diverse.
Once values have been established and communicated, they must be rigorously followed in practice and people held accountable for observing them.
Tomorrow’s global companies need both values and rules, but values provide the bedrock upon which a company’s behaviour should be based.
Creating frameworks
There are serious failures in the frameworks of law, regulations and agreements which frustrate many efforts to deal with some of the global issues both companies and societies face. Fiscal systems often do not drive the market in sustainable directions and subsidies are frequently perverse.
In many cases, major issues can be addressed through international agreements. These subsequently need to be translated into national regulation that is then rigorously and uniformly enforced. Effective self-regulation, in its many forms, is often the first step.
We believe tomorrow’s global company must take the time and commitment required to be proactive and work jointly with other companies, NGOs and governments and international organisations to ensure that better frameworks are created.