EXECUTIVE INSIGHT: Unpacking Corporate Responsibility
22 April 2014 at 4:55 pm
In this week’s Executive Insight, Pro Bono Australia News speaks to Paula Benson from the National Australia Bank about the Corporate Responsibility strategy giving new meaning to the notion that ‘power is money’.
As a player in a finance sector that has in recent times been so frequently lauded for its outstanding contribution to the Corporate Responsibility (CR) field, NAB stands out for its holistic and strategic CR strategy promoting risk management and financial empowerment for Australians.
Paula Benson, General Manager of Corporate Responsibility at NAB, describes her company’s CR function as “trying to create more of what matters to people and the economy”.
It is a comprehensive program that rests on three pillars – Building a healthy relationship with money, Prosperous Communities and Future Focused Nation – the fulfillment of which is reported upon annually.
“We really see it as a sustainable approach to business strategy,” Benson says.
“It's also about considering the environmental, social and governance risks with lending.”
“I’m not a fan of the term Corporate Social Responsibility. I prefer Corporate Responsibility. To have just a social focus is too narrow.”
The strategy is reaping rewards for stakeholders and reverberating down NAB’s entire supply chain – proving ultimately to make good business sense.
Finance for Good
In its quest to embrace CR principles, NAB is in the company of other finance giants both in Australia and overseas. A strong commitment to CR within the finance sector has, in recent times, been hardly atypical. Financials have ranked highly in international benchmarking programs, making up over one fifth of the Global 100 Most Sustainable Corporations in the World named earlier this year at the World Economic Forum in Davos, Switzerland.
Benson says the focus of critical attention on banks has encouraged the tackling of key CR issues earlier than other sectors.
“We’ve had to think about issues management before a lot of other sectors did,” she says. “Issues management means we can deliver a wide range of value.”
Benson speaks of the need for stakeholder engagement faced previously by the mining industry around a range of issues including environmental management, and the positive impact it has had on that industry’s approach to CR.
“When I look at the CR journey…companies that have to face issues ahead of other industries will always be ahead of the curve,” she says.
Banks also have another card to play – the potential to alleviate financial exclusion, a significant source of hardship in the community.
NAB’s own research last year showed that more than three million Australians don’t have access to a basic transaction account, a moderate amount of credit, or general insurance. The percentage of the Australian population excluded from accessing these services had risen from 15.6 per cent to 17.7 per cent over the previous two years.
“It’s also about being there in times of hardship…that’s why we have one of the largest microfinance programs in the developed world,” Benson says. “We provide $130 million in capital to support lending to low income Australians through various microfinance programs including the No Interest Loans Scheme.
“A lot of these people couldn’t walk into any bank and get a small amount of credit.”
As part of the bank’s approach, CR strategy must be outwardly communicated but also should penetrate internally, reaching NAB’s full spectrum of stakeholders.
There can be little doubt that the resulting communication is slick. The pillars concept carefully delineates aspects of the bank’s CR program and underpins elements of the strategy with a narrative – it is storytelling that has taken CR strategy to the everyman – from customer to employee to shareholder.
“We all know storytelling is key to engaging stakeholders, but it must be totally underpinned business commitment to deliver on promises,” Benson says.
“I think it’s very clever, and people absolutely love it, but I really want to emphasise it’s not just a communications platform.
"It affects customers and shareholders and of course our employees – they get this strong connection [with CR philosophies].”
The personal connection of staff with CR is bolstered through NAB’s corporate volunteering program – one of the largest in corporate Australia, Benson says.
“Our people can support any Not for Profits. They can volunteer for any organisation as long as it has DGR status,” she says.
Benson says the defining the bounds and maximising efficiency has ensured maximum impact can be achieved.
“It’s also about understanding the role that Not for Profits play – and we do believe they play a key role,” she says. “We don’t choose a [specific] number of Not for Profits to partner with.
“We find that way we can harness the skills and expertise of our people and have greater impact than if we just partnered with a couple of specific organisations.”
Benson says her motto is to beg for forgiveness rather than ask for permission.
It is a principle reflective of the potential she sees in the CR space to operate as a ‘trial and error’ space for innovation in the field.
“I think it’s that concept of where do you house stuff…you can incubate and innovate in CR,” she says. “You can try things out and if it fails it doesn’t matter.
“I’m really excited about some of our thinking at the moment. We have two projects on the go using Creating Shared Value thinking.
“We’re also trying to be a thought leader in Collective Impact. They [Not for Profits] often have shared goals but a different way of measuring or thinking. We think there needs to be more collaboration.
“Another focus for us is impact investment, and how we can assist Not for Profits to unlock capital to achieve achieve their mission.”
Benson is under no illusions about the need for business buy-in if those new ideas are to be refined and developed, however.
“If we want to take things further, we have to make sure our plans stack up with those from other parts of the business that we’re competing for funds with. You have to develop a cross-organisational business case,” she says. “Then you have to think about who you need to engage within the business’ departments and what you need.”
Benson says continually improving will remain a focus at NAB. She also sees room for improvement beyond the scale of her own CR program.
“I think there’s a lot more Australian corporates could be doing. We need more proactive CEOs.”
“I think the smart companies are doing really interesting things…PwC for example, taking up the concept of Shared Value.”
Benson links six ‘Rs’ with the outcomes of CR programs, saying they:
Promote resource efficiency
Tackle regulatory challenges
Enhance company reputation
Greater uptake, she says, is reliant on the positioning of CR as a strategic advantage.
“It’s really about having the success stories on how CR can drive shareholder value,” she says.
“Companies need to realise this is about creating value, its not about constraining or limiting the business in any way.
“It’s not just about what that group in Corporate Responsibility does, it’s about what everybody does.
“It’s an opportunity.”