Sir Mark Moody-Stuart on responsible corporate leadership in uncertain times
UN Global Compact Network Australia | January 30, 2017
On 23 January 2017, Sir Mark Moody-Stuart – former CEO and Chairman of Shell, and now Vice Chairman of the UN Global Compact – spoke with Sam Mostyn at a forum for GCNA members.
Sir Mark shared his views on the role of responsible corporate leadership in uncertain times, drawing on his wealth of experience from the frontlines of business, sustainability and ethics. Key insights from the discussion follow.
- The importance of principles. In the current unpredictable and politically fractured world, businesses must maintain their core principles, and resist the temptation to take advantage of politics, such as finding opportunities to get out from under regulation. While frameworks and political sensibilities might change, businesses must maintain their values and principles and keep on their course. Business also has a role to play in building relationships across fractious political boundaries.
- The role of business. Business people have an obligation to take off their corporate hat and put on their societal hat, and ask, ‘what’s good for society and what is our business doing for society’? It is also important to see the company as a stakeholder in society (rather than the company at the centre of a stakeholder map, as they have traditionally been drawn).
- Engagement and collaboration. Engagement and collaboration – with other businesses and other sectors – is critical to understanding issues, building bridges, and keeping each other honest. Further, some issues cannot be solved by individual organisations, but require collective action. Business leaders must be good at listening, including to people who they do not necessarily agree with. Ultimately, all organisations are made up of people, and engaging at a personal level is key to understanding and influence.
- Corporate leadership. There is a clear role for corporate leadership in the fractured global political environment, but business cannot replace government. There is a role for business to work with government, and to strengthen government’s arm to put the necessary policies, regulations and other frameworks in place that are needed to ensure a sustainable future.
- Regulating markets. The private sector needs governments to build the foundations for stable and sustainable growth. Markets cannot do everything, and there is a role for regulation. The creativity of the market must be guided and stimulated to work in the right direction. Business should work with government to ensure the right frameworks are in place.
- A compliance approach is a short term game. There is risk in taking a compliance approach to sustainability issues, or waiting for government to regulate or enforce regulation before acting. Companies should proactively address sustainability and governance issues, and ensure their incentive systems do not encourage unsustainable or unethical practices, to avoid building problems for the future.
- UN Global Compact. The uniqueness and power of the UN Global Compact comes from its inclusiveness (small and large companies, and all sectors), its principles (organisations must sign up to universal sustainability principles), its reporting requirement (organisations are delisted if they do not report on their progress in implementing the principles), and its Local Networks (which can drive multi-stakeholder action on national sustainability priorities).
- Achieving the Sustainable Development Goals. Most will agree that achieving the SDGs is technically possible; far fewer will agree that they will be achieved in full. That said, the SDGs can and will trigger significant work towards sustainable development, and we must work with enormous enthusiasm on the parts of it that each of us and our organisations can contribute to.
- Playing your role, but maintaining sight of the bigger picture. In looking at the Sustainable Development Goals, or societal issues more generally, companies should focus on where they can have most impact, based on the skills and resources they have and the business they are in. However, it is important to also take a broader view, to ensure important societal issues do not fall through the gaps, and to support others in playing their parts as well.
- Local action. The bulk of employment and business activity does not sit with the world’s biggest companies, and so they alone cannot solve the world’s sustainable development challenges. The SDGs must be addressed in each and every country, and so local action is fundamental to achieving them
- Board engagement. Sustainability practitioners need allies at executive and board levels. One approach is to start with the board sustainability committee (or equivalent), and get the chair as an enthusiast and ally. This will often filter out to other board members, which in turn will help build an understanding of how sustainability relates to core business.
- Learning from challenges. Challenging incidents offer an important opportunity to ask fundamental questions, and reflect on and improve corporate principles and policies. Engaging with a broad range of stakeholders after an incident can provide valuable insights and strengthen relationships.
- Transparency. A key objective needs to be encouraging companies to report in a transparency way. However, sectors should work together to ensure corporations are not discouraged from expressing aspirations by fear of being sued if they fall short
- Hope for the future. A new generation of leaders is emerging, who will more naturally take a wider view on societal issues. This will also be supported by an improving gender balance in corporate leadership.
GCNA members can get in touch to request the recording of our conversation with Sir Mark Moody-Stuart and Sam Mostyn.