bluenotes debate: collaboration, the key to thriving communities

Click image to zoom Tap image to zoom

Scrutiny over business’ ability to meet community expectations has never been greater. As industry grapples with its changing role in the community, particularly with regard to social and environmental issues, leaders are reflecting on the purpose and culture of their organisations.  

At a recent ANZ Corporate Sustainability event, business and community leaders including ANZ CEO Shayne Elliott, Monash Sustainable Development Institute chair Professor John Thwaites, Australian Council of Superannuation Investors CEO Louise Davidson, Brotherhood of St Laurence Executive Director Tony Nicholson and Latrobe Valley Bus Lines Founder and Managing  Director Rhonda Renwick sat down to discuss the issue. 

Below is an edited version of the discussion, featuring audio highlights.

"[Companies] which understand their broader role in society are going to be the companies which provide long-term good returns.” – Louise Davidson

Thwaites: The issues society is facing are large. Many of them are global challenges like climate change or inequality but many are also very local, like the sort of challenges Rhonda could see in a changing community like the Latrobe Valley. Today we want to look at what is business' role in addressing those challenges.

Certainly, businesses can bolster their reputation by being involved in the community. It's an important part of their social licence to operate because people do expect businesses to do more than just make a profit.

I also think businesses have to be careful or they're going to be accused of greenwashing and just ticking a box when it comes to this area. It is critical is for businesses to mainstream doing good, doing the right thing, being sustainable, not seeing it as something off to the side.

Shayne, as a bank, how do you reconcile the positive contributions you make as an organisation with the fact the community seems to have lost trust in banks?

Click image to zoom Tap image to zoom

Elliott: I think we recognise that and part of being a purpose-led organisation is accepting when things have gone wrong, when you've made mistakes, when you've done things not up to the standards of our people or the community, acknowledging that, fixing it, putting things right and making sure it doesn't happen again.

I don't relish having a Royal Commission, obviously there'll be a lot of stress on the organisation, but neither am I afraid to stand up and represent our organisation. I'll acknowledge where we've made mistakes but I'm also proud of the things we do that are positive.

The research is pretty clear.  When you go and ask people about the industry they have all these views. When you ask them about their bank they have a very different perspective.

Generally, they say “no, my bank's fine, my branch is great but the industry, ‘that thing’, they’re bad”.

It's interesting at the same time trust is low in our sector, customer satisfaction has never been higher. There is this kind of dilemma out there.

Thwaites: Talking about community expectations, one of the things the community wants is to have some level of collaboration with business, civil society and government to solve these major challenges. 

Tony, as someone who has partnered with ANZ for quite a long time, how do you choose who to partner with and what are the expectations an organisation like the Brotherhood has for business partners?

Click image to zoom Tap image to zoom

Nicholson: We have long had a saying in the Brotherhood of St Laurence that we will join hands with anyone who shares our objectives.  What I've learnt out of partnerships with corporations like ANZ is there are a couple of things you need to have great clarity about. 

The first is the understanding of what you're trying to achieve.  When I've found partnerships have unravelled it's because you haven't spent the time to really nail the issue. And you get into a conversation somewhere down the track where someone says, ‘well hang on, that's not what we were in this for’.

The second thing you need is clarity about what each partner's role is – and that each role reflects one of the core capabilities of the partners.

The Brotherhood wouldn't have been able to do ANZ’s Saver Plus program without the bank's capacity around financial literacy or the capacity of its networks.  But on the other hand, ANZ wouldn't be able to do it without organisations like the Brotherhood and its partners who can reach into communities and engage disadvantaged families.

I think it's really important each partner plays to its core capacities.  

The ANZ Tony Nicholson Fellowship

During the event ANZ and the Brotherhood of St Laurence unveiled the ANZ Tony Nicholson Research Fellowship aimed at helping young people from disadvantaged backgrounds examine social and environmental policy issues.

Funded by ANZ, the ANZ Fellowship is named after outgoing Brotherhood ED Nicholson, who is stepping down from the role after 13 years with the organisation.

Participants will undertake a six-month research internship into areas of shared interest between the Brotherhood and ANZ, including financial wellbeing, environmental sustainability and housing.

You can read more about ANZ’s partnerships with community organisations such as the Brotherhood of St Laurence, as well as how ANZ is managing its most material environmental, social and governance issues in ANZ’s 2017 Corporate Sustainability Review.

Thwaites: Louise, from an investor perspective, does ACSI place a particular focus on the way in which the companies your funds invest in engage with the community?

Davidson: It's a critical issue from our perspective.  Our members are big superannuation funds and between them own about 10 per cent of most listed companies in Australia. They have a really strong interest in the sustainable long-term performance of those companies. 

I think we're operating in an environment, a low trust environment - all of the surveys are showing that and it's not just banking, although banking's in the sights clearly - but it's a broader business trust issue.

It's critical for businesses to recognise that and think about how they can address it.  It's not enough just to meet your legal obligations because there is a broader societal expectation about what business will do. 

Thwaites: Super funds are investing money on behalf of people who see it as their retirement income.  Their major interest surely is just maximising that - why would a super fund be interested in anything beyond that?

Davidson: Our view certainly is companies that manage their communities properly, manage the environment, and understand their broader role in society are going to be the companies which provide long-term good returns for members of super funds.

Thwaites: That leads on to a question for Rhonda really, because you're operating a medium-size enterprise where the rubber really hits the road. You've chosen to actually invest in your local community and I wonder if you could tell us a bit about that.

Renwick: We put the community and the environment number one in all we do and over the last few years we've gone through every policy procedure and made sure that we actually do that. 

We've brought in the best-possible engines we can run and we've actually just signed off on eight hybrid vehicles, the first we're going to manufacture in January in Melbourne.

Click image to zoom Tap image to zoom

The thing we've noticed is people are responding to that. They actually like the hybrid vehicles because they're quiet and they're smoother but what they like most of all is we are prepared to invest in those initiatives for our community. They see it as something that they're part of.

Thwaites: Tony, what about the Brotherhood and welfare organisations. How do you operate in that place-based way?

Nicholson: Look, it's critically important to think place, because when you think about it one of the problems in a lot of our social policy programs in Australia is they're targeted to individuals and households - forgetting those individuals and households actually live in a community.

To be effective in working in these communities you've got to be part of those communities. You've got to have your people participating in those communities, going to the food court of the local shopping plaza, for example.

This concept of place is critically important to our work and our work is increasingly about building local leadership in those communities, working with people rather than doing things to them.

Renwick: It's about relationships and actually being in those relationships for the long-term, not just to be in and out while throwing a bit of money around.

It is actually being there, rolling up your sleeves and doing something that makes the difference. I can see that's starting to translate to the people within the Latrobe Valley which is really encouraging.

Thwaites Louise, are there any particular environment, sustainability or governance themes ACSI members are particularly focused on currently?

Davidson: There are, and it is a challenge to distil it down to a manageable number of issues to pursue. The key things on our list at the moment are climate change and incorporated within that is the concept of a ‘just transition’.

We have to make this transition but all of us need to be involved in making sure that the transition doesn't leave behind big swathes of our community.

The other one occupying our minds at the moment is corporate culture. We meet with the chair and non-executive directors of company boards. That's our main contact point at companies and we frequently have a conversation with them, asking them to describe the culture of their organisation.

You'd be surprised at the number of times these very senior people are not able to articulate what the culture of their organisation is, and that's a red flag for us, obviously.

Thwaites: Tony, all the focus has been on business but what about civil society and organisations like the Brotherhood? Do they need to lift their game in some way if there's going to be better collaboration and better outcomes?

Nicholson: I would say yes. Part of the challenge is for us all to break out of the stereotypes we have of each other and of other sectors.

I think there has to be preparedness in civil society organisations to have an open mind about who they're going to collaborate with and how they can collaborate with them.

Professor John Thwaites is Chair at the Monash Sustainable Development Institute 

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

editor's picks

11 Apr 2017

ON THE COUCH: Culture, growth and purpose with Shayne Elliott

Andrew Cornell | Past Managing Editor, bluenotes

Does business exist just to make money or is there a role for enlightened self-interest and helping communities work?

19 Dec 2016

BlueNotes Debate: trust, sustainability & corporate culture

Andrew Cornell | Past Managing Editor, bluenotes

Issues of sustainability, trust and social licence are increasingly important across the political and business environment - as developments in the US, Britain and Australia upend long-held conventional wisdom about how it all works.