Businesses should reward for responsible behaviour not short-term targets, says BITC CEO
Katie Jacobs, February 07, 2014
Businesses should reward and incentivise employees for “doing the right thing” and behaving responsibly, Business in the Community (BITC) CEO Stephen Howard said yesterday.
Speaking at the BITC’s annual leadership conference, Howard called on businesses to build responsibility “into the DNA” of the their companies in order to build trust.
Howard said: “Business leaders are failing to properly reward responsible behaviour. Changing this would send a powerful message that being a responsible business goes further than CSR reports and values statements."
A survey of 215 senior business leaders conducted by BITC showed individual employee objectives often do not align with the organisation’s corporate responsibility goals. This can lead to behaviour that goes against business values. It also found 70% of business leaders think too much attention is given to short-term goals.
Howard added CEOs and investors must “move beyond financial value as the only recognised metric of business success”
“By adopting an integrated approach, reporting on the added value of responsible practice business, and rewarding responsible behaviour, business can form a new and more powerful contract with society – and re-claim its rightful place as an engine for social change and innovation,” he said.
Integrated reporting debate
The leadership conference also involved a panel debate on integrated reporting, featuring National Grid CEO Steven Holliday, Hermes Fund Managers CEO Saker Nusseibeh, and Newton Investment CEO, and gender diversity champion, Helena Morrisey.
Integrated reporting is a new form of corporate reporting, designed to give investors and banks a holistic view of how an organisation creates and sustains value in the short, medium and long term.
Holliday said quarterly financial reporting should be scrapped as it encourages short-term thinking. He advocated pulling CSR and financial reporting together, as National Grid have done.
“If your CSR report is separate, it indicates it’s a bolt-on extra,” he said. “The challenge is to convince people [staff, customers and investors] that this is not an ‘initiative’ - this is how we do business.”
He added that embedding sustainability into the business helped employee engagement. “Engagement goes through the roof when employees realise they work for a business that’s not just short-term focused and does good for the community,” he said.
“We have to run business in this way for the engagement of our employees today and the attraction of employees tomorrow. It’s germane to business success.”
BITC is a business-community outreach charity that promotes responsible business. HR magazine is partnering with BITC for April's Responsible Business Week.