The 21st Session of the Conference of the Parties (COP21) will kick off next week – companies, investors and policymakers gather to urge world governments to produce a strong climate agreement coming out of Paris.
I was asked to speak at the Zurich-based conference organized by Frank Bold legal services entitled “Corporate Governance for a changing world”. This conference is part of a global thought leader engagement process with events in London, New York, Brussels and Zurich and aims to develop new insights for new corporate governance. I was mostly impressed by the very impressive turn-out of many of the who-is-who of Switzerland’s relevant stakeholders on the subject, featuring prominent thought leaders from business, government, academia, civil society and consulting.
Given the nature of the 4-hour brain-storming session and the Chatham rules, I am able to share only some general personal insight that particularly struck me. While the pre-reading material and preparatory questions seem to be very detail-oriented, the various speakers (me included) highlighted the need to step back and embrace first the bigger and broader picture. I had suggested that we consider corporate governance in the context of the challenge of living well on one planet, the WBCSD Vision 2050 goal. This allowed me to frame corporate activity within the “safe operating space” of OXFAM’s doughnut model which includes on one hand the outer limits of the planetary boundaries (based on work done by the Stockholm Resilience Center) and the inner limits of social foundation (based on RIO+20 work).
The echo was really interesting and rather than facilitating a one-hour plenary session, I broke our high-level group of experts into relevant topical clusters such as voluntary corporate action, responsibility of the board, stakeholder engagement, influencing the regulatory environment, the purpose of the organization, incentivizing the existing system, and shareholder responsibility. I was deeply impressed by the depth and extent of these discussions and the creativity and engagement that emerged. Interestingly, the largest group and energy emerged in the area of influencing the regulatory environment and better understanding the corporate board to influence the purpose of the corporation.
I look forward to see what happens with a handful of really creative and provocative ideas to change the landscape and use the influence of investors to entice the management of companies to take decisions in favor of society and the planet. It was such an enriching experience to contribute to such positive and creative new ideas with thought leaders from so many different sectors and industries. Well done to Frank Bold and its local partners University of St. Gallen and University of Zurich for organizing this!
Source: Holacracy at BSL: Moving Forward
Today I spoke at the beautiful House of Religions in Bern, a wonderful open space for dialogue across cultures. Together with an engaged public, we discussed the decoupling of the many corporate responsibility efforts on one side and the pretty poor state of the world on the other side. The Business Sustainability Typology (BST) developed by Thomas Dyllick and me served as welcome framework for the discussion. It allowed to channel and focus the various perspectives and enabled a positive, solution-oriented nature of our discussion. The BST differentiates between three types of business sustainability and challenges organizations to fundamentally rethink their corporate strategy to become “truly sustainable”. This BST 3.0 ideal state invites business to adopt an outside-in perspective and to start by considering burning societal issues and evaluating what relevant resources and competencies they have to help solve these challenges. Or, as Peter Drucker said: “Every single social and global issue of our day is a business opportunity in disguise”.
Much time was spent considering alternatives to address and resolve the European refugees crisis and besides overcoming a defensive fear that is well present, we concluded that most urgently of all, we need a space where stakeholders discuss this problem and explore avenues of solutions. I concluded by referring to the 50+20 vision which out this responsibility squarely into the hands of public universities. With their unique convening power and the right stakeholder engagement facilitation (see the collaboratory solution), universities and also business schools can create the space to ensure that we start the dialogue now about how to integrate large numbers of immigrants into a Europe that has just become a new entity we need to redefine and embrace pro-actively.
On my way home, I have embraced my little part of an action: I will mobilize relevant stakeholders of European business school to issue a Call of Action for b-school to provide immediate and non-bureaucratic scholarships to refugees stranded in Europe, irrespective of their visa situation. And I am considering housing such a student at my place when Business School Lausanne will accept such students as early as next February. Obviously, I feel inspired! Thanks for a great afternoon.
Here some thoughts on boundaries (do they enrich or imprison us?) by my blogging partner Dr. Kathy Miller on the other side of the ocean.
by Dr. Kathy Miller Perkins
Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability. Read the previous post here.
We live in a world of boundaries – a term that can be defined in many ways:
- A dividing line.
- A point or limit that indicates where two things become different.
- Frontiers inviting exploration and development.
Some boundaries appear on maps as divisions between countries. Others are physical, such as fences or walls. In recent years technology has removed many of the boundaries that separated us in the past. However, internal or psychological boundaries seem to have become more entrenched now than ever before. And since boundaries of any type can enrich or imprison us, the question I am exploring this month is this: How can we ensure that the boundaries which frame us…
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Bob Eccles and the supporters of Integrated Reporting, a global initiative attempting to measure and establish the materiality of sustainability across various industries, are making most likely one of the most important contributions in this area to date. They have just shared the report of the Dutch company Aegon, one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. The “Management Board statement of materiality and significant audiences” is available on p. 12 of Aegon’s 2014 integrated report. On p. 15, the company presents a materiality matrix which clearly identifies seven material issues, along with an indication of the degree of control the company has over each one. The fact that there are only seven issues demonstrates rigor, discipline, and focus. Bob explains further: “on p. 16 the company discusses the trends for five of these issues: (1) Increased regulation of the financial services sector, (2) growing importance of new technologies, (3) changing capital requirements for the insurance industry, (4) persistently low interest rates, and (5) global aging and changing demographics. On p. 17 Aegon discusses the opportunities and risks associated with each issue and explains what the company is doing about them. The other two material issues are customer service and product performance (discussed on pp. 30-31) and employee engagement (discussed on pp. 32-34). Aegon’s 2014 integrated report is excellent in a number of ways and one from which other companies can learn. For example, this concise 70-page document also does an excellent job in using graphics and text to explain value creation for shareholders and society and the relationships between financial and non-financial performance.”
Let me tell you, if Bob Eccles says this, there’s a good reason to read the report! It is a global premiere to have a company report on this and while this may not be perfect, the next reports will be easier to do and shared learning will occur. I am sharing hopes with Bob that other companies will follow Aegon’s lead and start to incorporate a “Statement of Significant Audiences and Materiality” in their integrated report.
The secret to uncover solutions that leap-frog above and beyond current practices is the ability to ask pertinent questions. Enabling students to ask good questions is the higher purpose of teaching and represents an essential factor of successfully educating leaders to embrace problems we don’t yet know and come up with solutions that don’t yet exist based on technologies that have not yet been invented. An intended side effect of question-based learning is the increase in a student’s ability to hold the tension of not knowing answers and the ability to live with half-truths, partial answers without shying away from courageously taking a step in what appears to be the right direction given what is known at that time. Acting – reflecting – correcting – and acting again will be the future dance of our leaders. It may be called “stumbling forward”, a not so elegant yet courageous engagement towards the world.
The key benefit of question-based learning is the development of liberal learning. The 2011 Carnegie Foundation report on undergraduate business education in the United States demands from business education an integration with liberal learning, in order for students to:
a) Make sense of the world and their place in it,
b) Prepare students to use knowledge and skills as means toward responsible engagement with the world, and
c) Instill students a sense of responsibility for the Common Good, guided by commitment & values.
This is achieved by a) analytical thinking, b) multiple framing, c) reflective exploration of meaning, and d) practical reasoning.
Reflection and awareness in a world becoming more complex, more unpredictable, more challenging, means getting rid of unilateral thinking, conventional ideology, and reductionist vision of the raison d’être of the firm. – Philippe de Woot
Un-covering assumptions that shape the way we look at the world is a critical step to be able to start forming one’s own opinion about what feels right. Another element of this approach is the inherent possibility to render conscious the many currently undeclared assumptions of the oppressing current economic thinking, opening the opportunity to discuss alternative avenues. Some of these assumptions are:
- Growth and consumerism as the unquestioned answer to economic downturns and crises since the 1960s. Despite that fact that growth has driven us to a state in which we use 1.5 planets to cover our current needs.
- The contribution of business to society is measured by the return on shareholder equity limiting the purpose of business to maximizing shareholder value,
- For the longest time, goods of Mother Nature have been free of charge (fish stock, forests, water, commodities, etc.) with capital only being required for the exploitation and often the destruction of these resources. Governments of emerging countries have started to lease or sell entire regions (valleys, glaciers, frost land) to companies to exploit the inherent natural resources that often took millennia to develop.
 This term was developed by Katrin Muff in the case study of Business School Lausanne with Prof. Dr. J.B. Kassarjian of Babson College (2008-2010).