The below letter appeared in Letters to the Editor, Financial Times, 10 January 2018. Find the original piece here.
Your leader entitled “A better deal between business and society” (January 2) is very timely. You primarily focus on the role businesses — and in practice their boards — need to play in strengthening the social contract. Their role is crucial.
If, however, there is to be a permanent shift towards the mainstream approach becoming focused on creating sustainable success for the benefit of all the main stakeholders in a business, and for wider society, all the players in theecosystem (including investors, corporate advisers, workers’ representatives, professions, business schools, regulators and politicians) need to step up to the plate and make their contribution.
It is hard for individual businesses to go against the grain and adopt a long-term approach if the prevailing culture is short-term, as challenges in the early part of the journey run the risk of halting them in their tracks.
If one accepts there is at least some truth in the maxim “what gets measured gets managed” then those of us involved in the accountancy profession have much to do as regards how performance is measured, the areas on which assurance is provided and more generally on the contribution those with a financial background make to boards given we are strongly represented on them in many countries.
We need, for example, to make much more progress as a matter of priority on how we capture the value of people to a business as well as other intangibles and, in particular, the extra value in businesses with highly talented and motivated workforces recruited from diverse backgrounds.
This is a challenge for standard-setters but also for the profession: we need a radical look at how we are training the business leaders of the next generation.