Stephen Howard - Business in the Community

ePolitix.com speaks to Stephen Howard, chief executive at Business in the Community about the way businesses are responding to a changing social and economic environment.

Question: Can you tell us about Business in the Community?

Stephen Howard: We are a business-led organisation and our mission is to mobilise businesses for good. Our purpose is to inspire, engage, support and challenge our member companies to continually make a positive impact on society.

Our approach is to use our four impact areas to bring focus and shape to delivering values to our members. The impact areas are workplace, marketplace, environment and community. The methods we use are a variety of programmes, benchmarks, awards, publications, consultancies and services etc to help companies to take these issues and to bring them to life.

We are some 850 members strong and we are supported by a powerful regional network of offices around the country. We have approximately 115 global partner network members who are Business in the Community-like organisations around the world; they are usually smaller and sometimes focused on just one or two areas.

These are places where we can direct our members who are increasingly global in nature so they have people with whom they can work in other countries where they do business.

The commitment we offer our members is three-fold. Firstly, we promise our member companies that they will be inspired to lead by example.

Secondly, we promise that they will impact on key social issues by collaborating with others to make a difference.

Our third commitment to members is to integrate, manage and measure the notion of responsible business inside the business; really embed it into the organisation.

Out of the three commitments, this is the hardest one, but also it pays the greatest dividends. What we try to say to people is, when you cut through all of that, what we inspire is just 'good business'.

Question: Last year BITC celebrated its 25th anniversary - what have been your biggest achievements to date?

Stephen Howard: The credit here goes to people who preceded me. The organisation has been enormously successful in putting this whole notion of responsible business on the corporate agenda and on the corporate radar screen. In our impact review last year we identified five key things that we learnt over the last 25 years, which really allowed us to have an impact.

One was inspiring leadership at the most senior level – how do you get the leading business people of the day behind the agenda and fired up about it.

The second thing is that you have to be relentlessly creative and innovative in campaigning, it is necessary to keep finding new and creative ways to engage businesses and to bring the whole agenda to life for people.

Thirdly, we learnt to engage companies with real practical things – practical skill sets, practical tools and ideas that they can use. So it is not just about talk, it is not just something which shows up in the annual report but something that actually happens.

The fourth thing was to make sure that we develop collaborative relationships or partnerships with other organisations to help bring the sort of scale to what we are trying to do.

Finally, the fifth part to come out of the review was the need to support and challenge companies to raise the bar in terms of the standards of responsible business behaviour, by disseminating best practice for companies to embed responsible business principles in the way that they do business.

Question: How have the challenges facing businesses changed during this time?

Stephen Howard: It is interesting; business is almost unrecognisable from where it was 25 years ago. Markets have become global; competition has become global; and pressures have become more short-term. The digital age has allowed bad news to travel at light speed.

If you are running a business, no matter what size, this means you have to think differently about how you manage your reputation, how you recruit your people, and what your stakeholders will expect of you. Who thought about environmental policies when shopping for bananas 25 years ago? Statistics today tell us that many, if not most, people do.

Therefore, the role companies play, according to civil society, has changed quite dramatically; and for the better. I think business is much more alive to global best practice then it ever was before. There is less difference between how Americans run businesses and how Europeans run businesses. Best practices have got to the point where everybody is taken advantage of quality programmes, development ideas and the wider responsible business agenda.

Question: What is BITC doing to help businesses think about their environmental impact?

Stephen Howard: This is a very important part of our work and one of our four impact areas. How do you tackle waste efficiently and how do you save cost. We have a big campaign running now, which we are calling The Prince of Wales' May Day Network. The campaign is around the whole agenda of climate change and how companies can reduce their carbon footprint.

Last year we had our first May Day summit. Over a thousand business leaders from around the nation took part in a live interactive forum in twelve different locations, they debated the role business can play, what we need to do, what we are capable of doing, what can business can do that the government can't and how we can work collaboratively with others.

This year on May 1, we will had our second summit, and had over 1,700 business leaders attending 13 events across the UK. Companies were able to share their ideas of best practice and showcase innovative technologies.

They publicly pledged against six commitments to take action on what business can do, both individually and collaboratively. One example of collaborative action was the Legal Sector Alliance which has seen 20 leading law firms and the Law Society joining together to come up with a best practice guide for law firms in terms of dealing with their own carbon food print impacts.

Question: Since the US sub-prime mortgage crisis the economy has slowed down quite dramatically, what impact has the current economic situation had on businesses?

Stephen Howard: Life is a cycle. I have been at this long enough to see many cycles and I believe we are currently in an economic down cycle. Businesses are under pressure, share price profits are under pressure, companies will have to think how they manage their costs in a different way. It will inevitably have an impact on bonuses and on corporate charitable giving, among other things. However, I suspect it is a relatively short-term phenomenon. Time will tell.

One of the worries that I have at a time like this is that companies cut out social and community-related duties in their efforts to cut costs, and momentum will be lost. Consequently, the message that we are trying to send out to our members is that it is more important now than ever, in a down-turning economy, to think about your role as a responsible business.

Our members are encouraged to think responsibly in terms of managing the supply chain, repaying vendors, engaging with the community, and dealing with their work force. All of these things that are part of being a responsible business become even more important in a downturn.

Question: Despite the increased risk of financial difficulty because of the economic situation, big businesses are often still accused of making huge profits without benefiting society, should businesses be more socially aware?

Stephen Howard: I think increasingly successful businesses are understanding that being a responsible business and having a thoughtful and strategic responsibility programme is not only the right thing to do, but also it is the right business thing to do. It is also part of creating a successful long-term sustainable business and part of creating value within the organisation.

I have been a business leader so I know that it is hard. There are often times when decisions have to be taken that are sub-optimal, you don't always have the money to do everything you like to do and so you have to consider your priorities. I think fundamentally, business is a good thing.

I think there are many people in this world who wonder whether business is a good thing. I happen to believe that business is a very powerful force for good, not all businesses and not all business people of course, but meaningful work is part of a healthy and happy life and employment and wealth creation is part of a wealthy and sustainable society.

Therefore, business has a crucial role to play and one of our challenges is to make sure we keep reminding businesses of that and keep finding them ways to achieve these things.

Question: The UK population has changed quite dramatically over the past few decades, what can be done to ensure companies employ a diverse workforce?

Stephen Howard: If you look at the make-up of British society, you realise it is changing dramatically. If your business doesn't reflect your customer base, you are exposing yourself to problems. So what we are advocating for all responsible businesses is that they are diverse in how they hire and position themselves. This is easy to say but harder to do.

Take the gender situation, for example: there are laws requiring equal pay for men and women. Virtually every company has a policy trying to encourage and promote equal pay and yet after all these years there is still a pay gap between men and women at the top.

When we look at the reasons for this they are a variety of different ones, but central to the why is that a number of 30-something-year-old women drop out of the workforce to raise a family and struggle to get back in.

We think, therefore, that we need to think differently about what work is, how we work, and where we work. Then we can ask if an organisation can capture the benefits of diversity by being more flexible in terms of hours, working environment, and where it recruits. This way, organisations can hold on to that talented group of middle managers who are also now having children.

It is about changing the thinking because I think businesses that don't recognise the importance of diversity within their own workforce and don't understand the changing demographics of the UK population will miss out.

Question: A recent select committee report has highlighted once again the gender pay gap. Should the responsibility lie with the government or the companies to ensure pay parity?

Stephen Howard: There are already laws out there, but they don't seem to work. There are probably examples but I imagine many, where businesses choose to pay their men more. More often I think it is this lack of flexibility in the workforce that chases out a whole group of female employees.

Therefore, businesses thinking about virtual offices, working from home options will be required to hold on to that talent.

What's more, if you talk to any major employer in the UK, they will tell you that recruitment is an expensive and risky process. You invest a lot of time and money in people and often lose them just as they are getting to their peak time for productivity. Part of it is to get business to think differently about how it holds on to its workforce.

Government, of course, has a role to play but passing another law isn't going to change anything - we have had laws before and that hasn't seemed to work.

Question: The economies of China and India are growing rapidly, what can businesses do to ensure the UK remains competitive in the global market?

Stephen Howard: I think that there are two or three answers to this question. Many, many of our members are, or aspire to be, a global business and they will have to consider carefully how they will behave in these emerging markets.

One of the pieces of work we have done over the past few years is to create what we call the marketplace, where we ask what a responsible business' behaviour means to its supply chain and how can one behave throughout the supply chain to make sure the ethical and responsible business standards run right through the fabric of the business and that certainly applies as companies are expanding to India and China.

Looked at from the other direction, how does Britain stay competitive in a world where Chinese universities are generating multiple times more graduates than we are and the skills gap is becoming wider?

We would say that there is a corporate response to this UK talent challenge in terms of making our education systems work better, up-skilling adults who have somehow been left behind. There are a shocking number of adults in this country who do not have basic literacy and numeracy skills, as well as a shocking number of young people who fall into the NEET category.

These problems have a double negative impact on the UK economy. The productive impact of this group of people is lost and they are a drain on our social systems as well. Britain has to think of a way to respond to the talent challenge and make sure our skills are increasing.

There are currently around six million low-skilled jobs in this country today, 90 per cent of which will probably be gone in few years time. So we have to ask what role business can play in equipping these people with the skills required.

We know government and our current prime minister are very passionate about this subject but business also has an important role to play. Therefore, we are creating a simple map of the talent journey, illustrating different points at which businesses can intervene and help.

This can be helping children to read at school, helping teenagers to plan their careers path, or supporting adults who have fallen behind on their basic skills. We want to highlight the various programmes already in place and the organisations already working in the area, so that if you are a company wanting to help you don’t have to invent the programme.

We want to make addressing this talent challenge a relevant part of what UK PLC is doing and make it easy, clear and simple for companies to engage.

Question: Do you have any final comments for ePolitix.com readers?

Stephen Howard: I think the whole agenda for responsible business is more important than ever.

 I think Britain can be very proud of the leading position it plays in the whole field of corporate governance and responsible business practices.

Both the British government and leading British businesses are in a wonderful position to be able to export these best practices around the world, and so, for those of us working in the field, this is a very exciting time.