One-off opinions and contributions from accountancy's great and good.
Building sustainable businesses
There is a real competitive advantage to be gained by companies who set out to build sustainable businesses, explains CIMA’s Victor Smart.
That's the message that is coming loud and clear from the top of the corporate food chain.
At a recent CIMA and Tomorrow's Company event at Herbert Smith, Jo Fox, director of ‘The bigger picture’ at BSkyB, touched upon the need to bypass ‘greenwashing’. Jo commented that she has more than 700 KPIs, including a responsibility to ensure that 86% of the company views their employer as environmentally responsible.
She also revealed that the firm is now making around half of employees' individual objectives relate to their personal values and behaviours at work. How you get results really matters.
And at CIMA's annual President's Dinner, guest-speaker Peter Voser, chief executive of Shell, stressed profit and acting responsibility can, and must, go hand in hand. Shell assesses sustainable development as a measure of performance. To help determine annual bonus levels for the most senior executives, 20% of the scorecard is based on sustainability performance – KPIs include safety, energy efficiency and water usage.
Public trust in businesses may have dropped to a worrying level, yet the best businesses are clearly beginning to embrace the values challenge. They have moved on to the point that how they contribute to the bottom line is reflected in executives' remuneration packages. In other words, behaviours and ethics at work are being rigorously performance managed. That is a significant step foward.
We saw with Lehman Brothers that the board was flying blind. They didn't understand how money was being made, that it wasn't remotely sustainable, or that results had become all that mattered within the team. The hard lesson is that in corporate life the culture always prevails.
Hopefully the culture is changing.
Victor Smart is head of profile and communications at the Chartered Institute of Management Accountants (CIMA).
Gail Purvis has also reported on a recent report from CIMA that reinforces the key role accountants will have to play in greenhouse gas reduction.