Corporate sector turns to shared value
Wednesday, 10th April 2019 at 8:15 am
Australian businesses are increasingly open to adopting shared value practices within the workplace but are still grappling with how to implement it effectively, new research says.
Shared Value Project’s latest report found 77 per cent of surveyed businesses were pursuing a shared value strategy, compared to 46 per cent in 2015.
On the eve of the report’s launch, SVP CEO Helen Steel spoke to Pro Bono News about the findings and said the climate was ripe for shared value in Australia.
Steel said given the damning findings from the banking and aged care royal commissions, there was a real imperative for companies to change how they operated.
“Shared value isn’t the silver bullet to solve every issue. And it’s not going to be the right fit for every business,” Steel said.
“But I think it’s a great tool or methodology that businesses can use to actually deliver on their purpose.”
Shared value is broadly defined as policies and practices that enhance the competitiveness of companies while improving social and environmental conditions in the locations they operate.
It entails practices with an identifiable economic benefit as well as a measurable impact on a social or environmental issue.
Steel said the research showed a clear intention from the corporate sector to change how it conducted its business.
“We’ve seen a growth in companies using the language of shared value. But the report also shows there’s a vast spectrum of understanding around what companies consider shared value,” she said.
She noted some companies still considered things like volunteering as a shared value practice when they sat under the umbrella of corporate social responsibility.
“I think companies are still really trying to understand how they use shared value effectively to gain profitability and a competitive advantage,” she said.
“There’s a desire there from the corporate sector to have this discussion and actually consider shared value much more deeply than perhaps they’ve done in the past.”
Researchers listed 10 important steps that companies could take to embed shared value in their organisation.
These include distinguishing shared value from corporate social responsibility, using purpose as a touchstone for corporate decision making, and measuring impact in terms of the organisation’s bottom line.
Steel said working closely with the board was one of the key steps businesses should consider when looking to adopt shared value practices.
“The board room has a much greater role to play in helping companies understand their purpose and taking it from not just a shareholder value conversation, but also really thinking about customer value and employee value as well,” she said.
“And I think what really came through in the banking royal commission report was that governance needs to be much stronger within organisations and the role of the board needs to reflect that.”
Steel added that companies genuinely engaging in shared value were changing the corporate culture of the organisation to better reflect its purpose.
“Shared value is actually about how a company conducts its business and operates. It is very much about a company using its core assets to address a social issue rather than it being a peripheral activity,” she said.
“Through the course of this research project we’ve seen that companies have a desire to do that. But I think the means to deliver on this is still being grappled with by many of these organisations.”