JOIN USCompanies should adopt more inclusive and integrated approach to sustain and grow in the present age as they could no longer carry on as before, said Prof Mervyn King S C, a well known jurist and academician from South Africa.
Prof King was delivering an address on “Corporate behaviour can’t be what it used to be,” to mark the 10th anniversary of the Centre for Corporate Governance and Citizenship at the Indian Institute of Management, Bangalore on Saturday.
Explaining the term “inclusive approach,” Prof King said it implied taking into account the legitimate and reasonable needs, interest, and expectations of stakeholders of a company.
Increased demand had instilled the mentality of “produce at any cost,” even though there was only so much that the Earth’s resources could sustain, he said. He highlighted that during the 19th century, despite the population explosion and greater demands, businesses still thought of the Earth’s resources as infinite. However, he said, today a number of factors like climate change and ecological overshoot, had come into play and business needed to change. “If businesses think it can carry on like before, then we are living in the age of stupidity,” he said.
Giving examples from the corporate world, he claimed that a number of multinational companies like Coco Cola, HSBC and Microsoft, had recognised it and adopted a more sustainable strategy.
“Even the chairman of Unilever recognised that if they carry on as usual, the company could survive only for the next seven years,” said King.
Suggesting a means for companies to plan their sustainable strategies better, he said businesses should spend more time studying their own financial reports. He claimed that he had come across board members in companies who did not understand their company’s sustainability reports. He advised companies to develop an informed strategy and a means whereby they are kept abreast of the realities of their stakeholders throughout the entire business cycle.