A better way of doing business

Business
in the Community outlines the challenges, opportunities and benefits of
integrating responsible practice into mainstream business

Most
companies recognise that there are opportunities and benefits to be gained from
responsible business practices, but sometimes identifying just what these
opportunities and benefits are is not straightforward. 

The
evidence shows that the greatest challenge now facing business is how to
attract, retain and motivate the workforce. Four out of five British employees
say a company’s demonstration of commitment to the communities in which it
operates has an impact on pride in the company they work for. High-flying
undergraduates are more likely than ever before to look for companies which
demonstrate their values and have a positive impact on the communities in which
they operate.

This
is the dominant concern among businesses, but it is only one of the range of
concerns that drive businesses today. Others include:

The
importance of managing risk to reputation

The
corporate sector has become the dominant institution in global society and, as
a result, corporate behaviour is scrutinised as never before.

Three
factors – the centrality of business, the erosion of public trust, and the
dynamics of a networked society – have created a veritable ‘Perfect Storm’ for
business. And creating what is effectively the eye of this perfect storm
carries a risk – the risk of failing to manage your reputation consistent with
the goals and values of your enterprise.

The
need to continually innovate to stay competitive:

It
is a given that to remain competitive a business has to innovate. Two-thirds of
business leaders across Europe believe responsible business practice promotes
innovation by increasing learning from outside and promoting a broader
perspective. 

The
negative impact of external social and environmental issues on competitiveness:

It
is no longer just a question of altruism. Evidence shows the importance of
tackling disadvantage and its bottom line impact on your business. For example,
by 2010 only 20 per cent of the workforce will be white, able-bodied men under
45. The need for business to contribute actively to the development of a
diverse workforce with the full range of skills that modern business now needs
is clear.

The
rising expectation of business behaviour, with associated regulatory pressures:

Research
reveals that 70 per cent of MPs believe companies should be required to
disclose their social and environmental performance in verified reports. Responsible
business practice is now clearly part of the mainstream government agenda. 

The
mandatory operating and financial review proposed in the White Paper on Company
Law will require economically significant companies to give future plans,
opportunities, risks and strategies equal importance with that of the
historical review of performance that has hitherto been the focus of financial
reports.

Business
is responding to these challenges and Business in the Community’s 700 member
companies are finding growing evidence of the positive impact of integrating
responsible practices on their businesses.

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In
May 2003, for example, the Co-operative Bank’s 2002 annual report stated that
its ethical stance was worth a net £25.6m in profits, compared with a total net
profit of £122.5m. More generally, 70% of global chief executives agree that
responsible practice is vital to the profitability of any company.

For
details of the research information quoted in this summary visit the Business
in the Community’s website, www.bitc.org.uk