We can be helpful or we can be hurtful - what do you want to be?
On 6 September 2023, EY, the Institute of Business Ethics (IBE) and ICAS co-hosted a virtual event ‘Ethical governance: Dilemmas and trade-offs?’ about the vital importance of business leadership, with a focus on boards.
Loree Gourley, EY Partner and Chair of the ICAS Ethics Board, moderated the event with panellists Kim Polman, Co-Founder and Chair of Reboot the Future, Helle Bank Jørgensen, CEO of Competent Boards, and Jeremy Leggett, social entrepreneur, writer and climate campaigner.
Going beyond compliance, an ethical culture plays a significant role in fostering a potential competitive advantage. Building trust, loyalty and advocacy among employees, customers, suppliers, regulators and other stakeholders can pave the way for sustainable success. In the face of conflicting demands and interests, how can decision-makers understand the terms ‘ethics’, ‘integrity’ and ‘doing the right thing’ in the context of their own business?
Ethical governance: Dilemmas and trade-offs?
During the webinar, the panel explored the importance of business leaders and ethical issues of today and tomorrow, including sustainability. The panel led with some introductory thoughts, and then participated in a Q&A session, some highlights from which are summarised below. You can view the full webinar here.
Kim Polman: The golden rule: Treat others and the planet as we would wish to be treated.
Otto Sharmer explains that our economy has been based for a long time on getting the maximum for me, bigger is better and governed by special minority interest groups to the detriment of a large majority. John Perkins has called this the ‘death economy’ because it is based on exploitation, extraction and abuse. He has a vision, which we share at Reboot, called the ‘life economy’ where all life thrives on earth and mankind lives with nature rather than trying to control it. This is possible if we treat others and the planet as we would wish to be treated. That is, with respect, dignity, generosity, trustworthiness, kindness and a great ability to listen to others. This asks us to reflect every day on what we say and what we do and how it affects others and the planet.
Every day ask yourself about how you talk, what you say to people, what you do, the decisions you make, whether that be at home or out in civil society, or in your businesses…We can be helpful or we can be hurtful – what do you want to be?
Helle Bank Jørgensen: The seven generation principle: Whatever action you take today think about the impact, think about the outcome of that, seven generations from now.
Boards of Directors must have the insight and foresight to effectively oversee companies, and lead those companies, with wisdom in mind… We need as leaders to step back and say: What is the impact, what is the outcome, of the different steps we’re taking? In my book, I discuss a principle known as the seven generation principle from indigenous culture: Whatever action you take today think about the impact, think about the outcome of that, seven generations from now. If we had wisdom about what impact we would have, we would probably do things in a different way. As well, the golden rule underscores the importance of engaging in meaningful dialogue, recognising that diverse opinions can foster a deeper understanding of the issues at hand. Successful business leaders today are ones that understand all of those things.
Look three, five, 10 years back from where you are now, and then look five to 10 years from now - what kind of work will you do? What kind of investors will back you? Who will be the people that work for you? Who will you sell to? By envisioning the future and engaging in scenario planning, discussions can be fostered around the attributes or strategies likely to spell success in the upcoming years. Success here transcends mere financial gain - it encompasses possessing the requisite capabilities and contributing to a planet that remains habitable and thriving.
Jeremy Leggett: Whether you’re working in a company or organisation, anything you can do within your circle of influence to help those beacons of hope to rise, that is a very important thing for any of us to do.
There is probably a low probability, but very high consequence and risk, that society will look back in anger one day, in the conceivably not too distant future, and apply retrospective liability to these decisions that are being made in the boardroom, and the corollary of that will be that some of today’s leaders may have to spend their dotage in jail.
There’s a great need for beacons of hope in the world. Talking to as many young people as I do, there isn’t enough for them to seize on to. Here’s an example of how we move forward. Whatever your politics are, look at this, surely this is a better way to do things, a better way to live, surely you don’t want to stand by and watch your natural world being destroyed. Here are examples of companies and organisations doing their level best to reverse that, with results. Whether you’re working in a company or organisation, anything you can do within your circle of influence to help those beacons of hope to rise, that is a very important thing for any of us to do.
Q&A: Reflections from the panel
How do we address supply and demand, and whose role is it to play an active part?
Kim Polman: We are all responsible because we are all consumers and need to think every day about what we consume, but companies need to think carefully about what they are producing, and that happens at the board level.
Helle Bank Jørgensen: Purpose is central to the essence of a company, embodied by its leaders who serve as the heart, mind, conscience and soul of the organisation. The first step is the need to have knowledge and understanding of different issues, and the ability to engage and deliberate on these issues and dilemmas. The conversation should extend beyond the company's purpose to include the purpose of the board: What do we want to be known for? What should our legacy be? What does a successful company of today look like? Why are we here?
How do we hold leaders to account today rather than waiting for the outcomes of tomorrow?
Jeremy Leggett: There are thousands of lawsuits being taken out now in multiple countries. We don’t have to wait for society to mobilise – it already has. There are also internal pressures from workforces. That is the issue that plays on the minds of [fossil fuel] companies – perhaps top of the list - where are we going to get our talent from? They were going to Oxford and Cambridge Universities and being told by the ‘best and the brightest’ that they’re not coming to work for them.
Who is going to pay for the cost of transition and do we know how much this is going to cost?
Jeremy Leggett: All costs of energy are huge but there are any number of studies now that show the costs of transition are less high and money will be saved in the long term if we really dramatically accelerate the main clean energy sector.
Kim Polman: In addition, we have to recognise that the availability of cheap products has cost so much in terms of social injustice, inequality, damage to the environment. It is coming to the point that these costs cannot be ignored anymore, and each business has to be responsible for their own pollution that they’ve caused.
Helle Bank Jørgensen: When we look at companies, we see three different broad groups of transition, and it all depends on the leadership and their stakeholders. The first category is a company which is continuing to do what it does while reducing its carbon footprint. The second category is companies who are starting some projects, or perhaps acquiring a company, and seeing how they can change the whole business over time. It’s almost like they have two businesses in one, the idea being to transition more and more to a more renewable operation. The third category is companies reimagining or reinventing their whole business. But, if you don’t have the backing of investors, employees, suppliers, customers - this is hard to do. It's important to talk with investors to understand their investment timeframe - whether they're looking for quick returns or are in it for the long haul like pension funds and other long-term investors. By finding investors who believe in what you're doing and including them in your plans, you're more likely to get their support. And if what you're offering meets your customers' needs, getting investor support becomes much easier, even from those who might have been unsure at first.
How do board members have the confidence that the data is robust, particularly on biodiversity, nature etc, which is so complex. These topics are very complicated - how do they know what questions to ask?
Kim Polman: It is crucial that people become educated about the issues – we can’t afford to put our heads in the sand and pretend it doesn’t exist.
Jeremy Leggett: When it comes to fossil fuels, there is so much data. For some of the more frontier areas such as biodiversity, which is very complex, we are not there yet, but that will change fast.
Helle Bank Jørgensen: It is also about having discussions. From a Board of Directors’ point of view, if you don’t know about the issues, if you don’t understand the impact of these issues, it is hard to ask the right questions. This is why educating boards of directors is so important, to give them the confidence to have the conversation around the boardroom.
How do leaders measure if they’re being effective in creating a positive ethical culture?
Kim Polman: It comes back to that simple question – am I being helpful or hurtful? That can be in the way I run my company: How are we encouraging people to treat one another? Do we listen? Do we have an open atmosphere to have the important discussions? Do people have the ability to speak up and question certain things? Can we have an honest and transparent discussion about things? Are employees happy? Are people quitting or fed up? Are they being asked to do things at work they would not want to do? Is the value of the company aligned with the values of the individuals – the common values? And in relation to the products and kind of work you’re doing: what are the longer-term consequences (the seven generation principle)?
In terms of cross jurisdictional leadership and geopolitics - how does that impact businesses?
Helle Bank Jørgensen: There is no doubt we need, as leaders, to look into this. Sometimes, we have to ask: What's our plan in a situation like ABC - where do we stand? If a new political leader gets elected, will that change our perspective? As a Board of Directors, we need to talk about the company's purpose, our values and how we'll handle a situation like ABC – are we staying true to our values? It's important to have these discussions ahead of time, so we know the potential issues and have a game plan ready.
View the full webinar here.
Kim Polman: Kim Polman is Co-Founder & Chair of Reboot the Future, whose purpose is to remind us that a better future is possible if we treat others and the planet as we’d wish to be treated. She co-authored a book on this philosophy, Imaginal Cells, Visions of Transformation. The book embraces the Golden Rule as the starting point with which to collectively address the most pressing issues of our time. Her second book, a deeper dive into the Golden Rule, produced with Anthony Bennett is Values for a Life Economy which draws on conversations held during lockdown with leaders with a range of backgrounds and ages, to outline ten values that can help us live the Golden Rule in all aspects of our lives and work.
She is also Co-Founder and Board Member of the Kilimanjaro Blind Trust based in Kenya, dedicated to improving literacy for blind and visually impaired students in East Africa. In 2022 Kim received The William Howard Taft Medal for notable achievement from the University of Cincinnati.
Helle Bank Jørgensen: Is the CEO of Competent Boards, which offers the global online ESG Competent Boards Certificate & Designation Program with a faculty of over 100 renowned international board members, executives and experts. Helle developed the Program to help board members, executives and advisors confidently identify, articulate and act upon their business's most material environmental, social and governance aspects. The program has engaged several world-class business leaders like Paul Polman, former Unilever CEO, who calls it an “Incredible initiative.”
Helle is a globally recognized sustainability, climate change, and ESG advisor with 30 years of experience helping global companies and investors turn sustainability into strong and reliable financial results. Helle has worked with hundreds of world-leading companies, including IKEA, Nike, Maersk, Shell, Unilever, Novo Nordisk, Orsted and Vestas.
Besides being a board member, Helle serves on His Royal Highness Prince of Wales A4S Global Expert Panel; The Non-financial Digitisation Working Group of the Impact Management Project (IMP); the Reuters Panel of Expert Judges for the Responsible Business Awards; and the Canadian Climate Governance Experts - a Commonwealth Climate & Law Initiative. She was the creator of the world’s first Green Account inspired by Life-cycle assessments, as well as the world’s first Integrated Report. Helle also developed the first holistic supply chain program and was the principal organizer for the CEO/Investor-network for Business Ethics and Non-Financial Reporting. She received the 2019 Clean50 award and has extensive experience providing strategic and operational guidance to all organizational functions, including advising at the C-suite and board level.
In 2020 Helle was awarded the Global Impact Award and named one of "5 people in ESG to look out for". She is also a State Authorized Public Accountant (CPA) and a Business Lawyer and holds a Master’s in Business Administration and Auditing.
Jeremy Leggett: A social entrepreneur, writer and climate campaigner. Before embarking on the Bunloit project in March 2020, he founded Solarcentury (1998-2020), one of the world’s most respected solar energy companies, winner of a Queen's Award for Enterprise in Innovation. He also founded SolarAid (2006-2020), an international charity set up with a levy on annual Solarcentury profits, winner of a BITC Unilever Global Development Award. An Entrepreneur of the Year at the New Energy Awards, he was the first Hillary Laureate for International Leadership in Climate Change, has won a Gothenburg Prize, and was the first non-Dutch winner of a Royal Dutch Honorary Sustainability Award. After taking a D.Phil in Earth Science at the University of Oxford, he taught at the Imperial College of Science and Technology (1978-1989).
He was scientific director of the climate campaign at Greenpeace (1990-1996) and has been an occasional lecturer on courses in business and environment at the universities of Oxford, Cambridge, and St Gallen (Switzerland). He has written four books about the climate crisis, as he has experienced it on the front lines for three decades.
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