27 Jan 2017
Every business needs “Critical Friends”
Changing The Way That Business Operates
Every month for the past 3 years, the Responsible 100 network has quietly but effectively brought together micro businesses, SMEs and some of the world’s largest corporations with leading campaign groups, NGOs, trade bodies, government and regulators. These 'critical friend' sessions are really changing the way that business operates one meeting at a time and they are held our Coleman Street HQ.
Why Do We Do This?
In a complicated world of expectations and opinions for business to deliver on their economic, social and environmental impact how do you make sure that you are fit for purpose?
So far we have had our approach to a number of policy areas 'critical friended' including our policies on equalities, culture, exec pay, carbon, modern slavery and taxation. For each session our expert provides the facts upon what we do.
Grace Stevens, our Chief Tax Officer explains what it’s like being critical friended: “We try to be transparent on our tax approach and tax in general has become a topic which is under regular media and civic society attention. Therefore it’s a very valuable exercise to be ‘criticallyfriended’ – it lets us learn where we are getting it right, where more would be appreciated and gives us a variety of constructive feedback directly from a diverse group of interested people.
"The conversation is genuinely challenging but clearly aimed at providing reasoned feedback and ideas - whilst it’s nice to hear what they like about our tax disclosures it’s invaluable for us to listen to what else they would like us to be disclosing on tax and more importantly why. We can then explain our reasoning and be honest about we have the resource to do, what we can change and what we can’t and why – we don’t meet everything on everyone’s wish list but we do make improvements every year and learn from these conversations and I’d like to think they feel the same way.”
Dawn Watkins, who works in our Hove office, has observed a number of these sessions and comments: "I am intrigued how a big company like ours balances it’s commercial interests whilst also adopting best practise on important social, environmental and ethical issues. I have attended the last two R100 roundtable events, the topics being quarterly financial reporting and how it may promote short term thinking and how transparent tax reporting should/could be. Both debates were fascinating, it’s great to hear Legal & General’s position explained by one of our most experienced experts in the Company on that specific subject and hear other companies speaking so honestly about their own situations. Other companies, charities and industry experts are invited, in confidence, to question and challenge Legal & General’s position in regards to our social responsibility and help identify where we could improve and areas we already do well in.
"Opportunities like this to test the transparency of our business policies and practises is so valuable. We are passionate about doing the right things for our customers and shareholders, having an outside in review of how we manage our business also helps us make sure we are doing the right things for the economy and society at large."
Real Responsibility Will Drive Profitability
Michael Solomon CEO and Founder of Responsible 100 explains: “Businesses need to balance their necessary pursuit of profit with the long term interests of people and planet. Doing this, while remaining competitive, is extremely challenging.
"In recent decades, a multitude of efforts have been made to help business better achieve this balance with little substantive success.
"For the majority of businesses, the overwhelming focus is on delivering products and services, at the right price and quality. All too often, 'doing good' happens incidentally or marginally, if at all.
"At Responsible 100’s heart is an exciting and bold hypothesis: real responsibility will drive profitability, while irresponsible practices will increasingly diminish it."
A Collaborative Network Of Businesses, NGOs And People
The Responsible 100 is a business tool which helps any business to benchmark its performance on a wide range of responsibility issues such as tax, community impact, zero hour contracts, executive pay, modern day slavery, workplace diversity, animal testing, customer complaints and redress, and many more besides. In fact we have 53 areas of business performance to be tested. If an issue affects business and wider society, we explore it!
How Does It Work?
Every month for the past three years, the Responsible 100 network have come together roughly once per month to explore a given topic in meetings of up to 30 people. For example, in November 2016 we explored reporting cycles and cyber security in separate meetings. Our aim is to unpick the issue and truly understand it. We seek to determine how it affects businesses and their stakeholders, how things have recently changed and what the future may hold. Secondarily, we build a consensus as to what poor, okay, good and excellent standards of business policy and practice look like.
We have run 34 roundtable meetings to date. We plan to run up to 20 next year.
A Unique Environment
There is no other environment that we know of where a business can set out its stall, out of the media spotlight, in the safe, supportive, collegiate space that we foster, with such a range of participants, on such a breadth of important issues. Participants may speak freely given their contributions are protected. Exchanges are frank. People are able to share their knowledge, experience and insights, and in return benefit from hearing those of others.
When a business shares its answer to a question with such a breadth of people, it opens itself up for deep scrutiny. These ‘critical friends’ – peer businesses and civil society organisations alike – offer their suggestions, their praise and, where needed, their criticisms. However, gentle probing from others around the table leads to further exploration and insight. Seeing problems and challenges through the eyes of others builds empathy and deeper understanding of the issue. It also frequently spawns innovation. Businesses and campaigners alike leave with ideas for new solutions and new approaches that they would not have conceived alone.
Businesses Held To Account
In short, businesses are held to account. We require them to explain and justify what they do, but we also support them along their journey. Being okay, according the scorecard is, well, okay. In working in these ways we form a clearer sense of what good and excellent look like, and thus if, how and when businesses might perform to these standards if they are not there already.
We are excited about the future. In 2017, we will make the mapping and benchmarking of responsibility performance increasingly simple and rewarding to undertake. Ultimately, for real responsibility to drive profitability, consumers, employees and people with pensions or other company investments must be empowered to identify and reward the businesses which are open, honest and accountable.