The last few months and years have seen a string of enormous corporate failures – from FIFA, to the Cooperative Bank in the UK, and more recently Volkswagen. Of course each one of these has a very different set of causes, but can they tell us anything about the values of these organisations, and about the sort of systems and processes we will need for companies to be fit for the 21st Century?
The values gap
What each of these failures demonstrate is a very clear gap between the stated values and the actual behaviour of these organisations.
FIFA for example states that its primary objective is “to improve the game of football constantly and promote it globally in the light of its unifying, educational, cultural and humanitarian values, particularly through youth and development programmes", and also of course to organise “inspiring tournaments”. It also claims a third “pillar” of caring about the environment and society through the reduction of unnecessary ecological footprint and promoting positive solutions.
The Cooperative Bank has been guided by an ethical and cooperative spirit since its founding in 1872 and with a specific ethical policy, which reaches out to its customers to ask them how they think they should operate. After the disaster of 2013 this policy has had a huge overhaul, with a new five pillar approach: Ethical banking (not providing services to organisations that conflict with their ethical policy); ethical products and services; ethical business (including how they deal with suppliers and external organisations); ethical workplace and culture, and ethical campaigns – going back to the roots of the movement and campaigning for social and economic change.
Volkswagen claim: “We run our business responsibly and with a long-term perspective along the entire value chain. Everyone should benefit from this – our customers, our employees, the environment and society.” Now we know they were systemically falsifying the emissions data on over 11m diesel cars, potentially causing damaging pollution and possibly destroying a brand that had been built on reliability and integrity.
So what’s at the root of these corporate failures?
Disconnection of values
One issue is a disconnection of values – a break between public and private values – between what organisations say and what they do. Since the advent of CSR, this has been a familiar behaviour for some organisations, where accountability and sustainability are seen as a PR annoyance (and in many large corporations the CSR department actually sits within a communications directorate).
There’s also a more personal values gap – where people actually quite deliberately leave their personal values at the office door and act in ways when they are wearing a corporate hat that they wouldn’t dream of outside the office. Often they are encouraged or pressured to do this, for example when pressure is put on people to sell unsuitable products.
A new era for corporate accountability?
It’s clear that corporate accountability and transparency have improved over the last couple of decades, from a focus on direct impact to carbon emissions, water use and supply chain issues – but there are still several gaping holes. There’s no real consistency in the depth and breadth of these efforts, for example, over the way that the organisation itself behaves to its workers. The revised Cooperative Bank policy seems to be moving in the right direction, looking not only at its external business practice (e.g. not lending to businesses in conflict with their ethics) but at the way they manage themselves (how they treat their suppliers and workers).
Each of these examples is one where a crisis has triggered change – and we yet have to see if any of these organisations can rebuild themselves and actually live up to their values. Surely we can hope that some companies don’t need a crisis to encourage this kind of change.
But even for companies that are trying to do the right thing, there is still a huge gap that needs to be addressed. Beyond all the impacts that are already measured and reported on - direct, indirect, water footprint and so on - there’s a values footprint that is caused by the way a company operates and communicates that might have as large an effect ultimately as all the things currently reported on.
For example, all kinds of organisations still use advertisements for products that portray a Benny Hill level of taste in the way they portray women, in ways which may have long term effects on people who see them and buy their products, like the recent “Beach Body Ready” adverts. It’s not just the people like Protein World or Ryanair who deliberately push the boundary, much of it is far less deliberate but maybe just as damaging – like the Robert Dyas catalogue personalised with the owner Theo Paphitis and ‘Mrs P’ giving ‘likes’ to various products: Mrs P ‘likes’ bakeware, a vacuum cleaner and an iron; Theo ‘likes’ a Bluetooth boomer speaker, a CCTV system and a Leafblower. They would say that this is all a bit of fun, and anyway they do measure lots of important things – but not the values footprint of these ads (or other parts of their operations).
The metrics and systems don’t exist to do that yet; the analysis that we’ve done in Common Cause Foundation, including the report we co-authored with Public Interest Research Centre “Think of Me as Evil?” could and should be extended into the values footprint of companies, so it becomes as normal and expected for a company to report on their values footprint as their carbon footprint.
Systemic problems need systemic solutions: companies fit for the 21st Century need to put values at the core of their operations and reporting.