EXECUTIVE INSIGHT: Small, Mutual and With Profit for Impact

This week’s Executive Insight looks at the team leader of a small mutual bank that is one of three globally awarded Australian organisations to be recognised for continuing to raise the bar on ethical leadership and corporate behaviour.

A small mutual bank for teachers is emerging as a strong voice in the global sustainability space.

Teachers Mutual Bank, established in 1966, has over 159,000 members and $4 billion in assets. With a mutual structure where members are shareholders, it provides financial products and services exclusively for teachers, their families and the education sector.

The organisation was earlier this year named as a 2014 World’s Most Ethical Company by the Ethisphere Institute, a US-based independent centre of research promoting best practices in corporate ethics and governance. It was one of three globally awarded Australian organisations to be recognised for continuing to raise the bar on ethical leadership and corporate behaviour.

The team is lead by the Head of Corporate Social Responsibility Corin Millais, who has held previous sustainability roles with Mirvac, Westfield, Greenpeace and the Climate Institute.

Pro Bono Australia News spoke to Millais about mutuals, the finance sector and how his own career has shaped his views on CSR.

Inherent Sustainability

Millais says the mutual structure of the bank lends itself to long-term sustainability and responsible performance on behalf of its members.

“We’ve got a long list of CSR projects but probably the most significant is about the bank itself and sustainability,” he says. “Our central approach is about embedding sustainability, and making it part of the business.”

“Our business model is being a mutual bank so we’re based around mutuality and the community. It’s profit with a purpose, so the way we’re set up is really about sustainability.

“It’s driven by the membership. That provides greater opportunity and a rationale across the business…we wouldn’t be doing this kind of work if the culture didn’t support it.”

The Shared Value movement has offered the bank an opportunity to frame their existing setup.

“It’s a great opportunity to talk about sustainability, and I think it fits into our business model,” Millais says.

“Our slogan is ‘profits do good in the world’. We are a shared value company. [Porter] has talked about pursuing profit from purpose as a specific business pathway and that’s what we’ve been doing. We see shared value as a way of explaining how a mutual bank operates.”

The bank has initiatives in a range of areas, but emphasises its alignment with education.

“We’ve got community projects, we’ve gone carbon neutral, we support charities,” Milais says. “Most of the community work is focused around supporting teachers and the education community.

“One of the main grant programs,Teachers Environment Fund, will provide a grant for teachers to undertake their own sustainability education projects. We also have Future Teachers Sponsorships, which are scholarships for young teachers to help them at university if they’re aiming to become a teacher, and a range of sponsorships in the arts and some in sports.

“It is mostly funding based but overall we invest 4.1% of our net profits back into the education community.”

Money with a Purpose

Millais sees greater accountability for corporate spending and investment emerging across the finance sector, aided by benchmarking and reporting programs.

“In the finance sector, I think people are really working up to working out what their money does and where it goes,” he says.  

“Of course climate change – if you’ve invested in polluting activities, is there an ethical issue with that?  Is our money funding social enterprise?

“I think that there is a change in the view that money has an impact on all sorts of issues. I think that’s a trend that’s exemplified by investment in fossil fuels, that’s one example. I think the sector is waking up to those issues across the board.”

In March, the bank published ‘Our approach to Climate Change’, which vocalised its own policy on investment and fossil fuels.

“Our approach is to make sure that we’re leading by example, and that we’re doing what we’re saying we’re doing,” Millais says.  

Part of forming an evidence base for the achievement of sustainability objectives is benchmarking.

“We’ve got 97 targets and KPIs in our annual report, so we have a pretty strong business work program in CSR, and we benchmark our performance in external indices like LBG and CRI. They’re performance based benchmarks which gives us results that enable us to measure ourselves against our peers.”

In 2013, Teachers Mutual Bank’s investment in community outperformed both LBG Australia & New Zealand and LBG Global benchmarks. The program is an internationally recognised standard for measuring and evaluating a corporation’s community investment.

The mutual bank’s total community investment of 4.1 per cent of pre-tax profits was seven times higher than the LBG Australia & New Zealand average and 12 times higher than the finance services sector average.

Yet Millais plays down the competitive aspects of the process.

“For us, benchmarks are crucial to establish as performance track record. it gives us a framework in which to place our sustainability work and validates whether we are in fact sustainable or not.

“Some of them are pretty rigorous. CRI is pretty tough. For a small bank like us it’s a pretty large space for us to play in and it drives that performance pretty strongly. For us it puts us on a pathway to greater performance. It’s a starting point for an end point.

“Benchmarking is nice, but it’s really about strategy. We scored 91 per cent in the CRI. We don’t feel a need to push that to 95 just to get the points. It’s not about the points, it’s about business value. That’s how we interpret the benchmarks. We’re in a category of international companies so it’s not always a leg for a leg, but it drives performance for a small bank in Australia.”

He emphatic about where he sees the greatest value from peers in the future.

“…Probably for business it’s about really good examples of sustainability by business, for business and learning from peers. I think that is a piece that would move the agenda forward – business to business peer learning.”

Passion and Progress

According to Millais, the sustainability field is never stagnant.

“We’re on a journey of continuous improvement,” he says. “The issues are always changing. I think we have to pay attention to always moving our programs forward. It’s a continuous process. You never stand still.

“Our executives really get the case of CSR and that it’s been made – now we’re really about the delivery.”

Millais’ belief in the bank’s CSR potential is evident – and he should know.   

‘’I’ve worked in NGOs and in policy and in business – three diverse areas where sustainability is being engaged. It all give me a different perspective about how these issues are dealt with by different players, and a sense of how these issues may be used for the better.”

But despite a varied career, he would not be drawn to pick a primary area of passion.  

“I’m lucky to have worked in diverse sectors, to pick one area, that’s quite hard! But I have a soft spot for renewable energy.

“Passion is about creating value from sustainability and getting outcomes. It’s all about success, whatever discipline you’re in.

“I’m passionate about that.”