What, no dolphins?!

Challenging the industry's ability and willingness to be accountable, DNV Consultants Glenn Corr and Nick Jackson take a closer look at the discrepancy between what the annual report promises and companies do...

Situation
For a number of years, legislation in many countries has demanded increasing corporate accountability and social responsibility. And while many of the responsibilities placed upon company directors have not changed in decades, societal expectations have become increasingly demanding.

Complication
We are more accountable than ever before. Society demands it, the law reflects it. Today, the meaning of the phrase "Responsible care" has a different meaning than it did in the 1980s, and society (quite rightly) has pressed for more transparency in how companies deliver on their promises to be socially responsible.

The days of the annual report being a narrative of past performance, heavily biased towards the image the company wishes to portray, are coming to an end. Global scandals have increased the pressure and tempo for organisations to present a balanced account of their activities, with more focus on forward looking intent and viability.

The public face of organisations is being challenged. There is increasing pressure to show that which lies behind the mask. This trend is reflected by the lack of tolerance for that corporate sin - "green-wash*". Companies can no longer hope that by simply including images of dolphins in their corporate literature will be sufficient to demonstrate their deep-rooted concern for the environment. Stakeholders are demanding facts, not pictures.

Furthermore, the demand for increased transparency and a company's ability to justify its actions is paramount. Non-governmental organisations (NGOs) and society in general are applying increasing pressure to force governments, local authorities, industry, and commerce alike to be more transparent. These dramatic changes have created some complex challenges. Organisations have to be "good corporate citizens". To ensure their survival, industry leaders have to set the standards, while communities have organised in an effort to be heard, respected, and consulted.

Question
What does an organisation have to develop, demonstrate and sustain, in order to be a good corporate citizen, neighbour, employer and provider?

Answer
Organisations have to accept and understand that society has expectations of the business community and that the business community has a responsibility to meet those expectations. Even if that truth is painful, industry must be accountable for its activities and the leaders of the industry have to take personal responsibility for what they do (or don't do).

This means that industry has to be more transparent than it has ever been before. Transparent reporting and operational delivery (the way we do business) is the "norm", so that it can be assessed, understood and, if required, challenged.

Leaders have to be visible and active. All personnel in positions of influence must accept their associated accountability, whether they are executives, non-executives or have any managerial authority within any part of the organisation.

Leaders have to be responsive to new challenges, embrace change and be available to their stakeholders. This all demands flexibility. What works today may not work tomorrow. Old norms will be challenged, new norms will be temporary, and an organisation's ability to respond to changing demands will be constantly placed under pressure.

How ready is industry today to open its doors, books and hearts to public scrutiny? This is a key question all organisations must face, and to do so effectively requires transparency. Sufficient corporate transparency will demonstrate a company's future viability, show the impact it has on all stakeholders and prove that the risks it faces, and the risks it poses to others, have been identified, understood and acceptably managed.

The question remains - how ready are you?

*Green-wash: (gren-wosh) -washers, -washing, -washed 1) The phenomenon of socially and environmentally destructive corporations attempting to preserve and expand their markets by posing as friends of the environment and leaders in the struggle to eradicate poverty. 2) Environmental whitewash. 3) Hogwash.

日付: 25 August 2004