PEOPLE as ACTORS
... as COMPANY DIRECTOR
DIRECTORS MUST BE ACCOUNTABLE FOR THEIR CORPORATE DECISIONS
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Human Capital / Babies / Families / Sports Team
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THE ROLE OF A CORPORATE DIRECTOR
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THE ROLE OF A CORPORATE DIRECTOR
The Board of Directors are responsible for 'managing. the corporate business. The widely accepted (legal) view has been for years that they must manage the business for the benefit of the stockholders, not for their own private interests nor in the interest of the wider public and external stakeholders.
This view is being challenged in a variety of ways because the modern corporation has the potential to do immense good or immense harm to society and the environment while being profitable for stockholders.
The narrow legal view has been a great convenience to stockholders for many years, but the costs to society directly and indirectly to the environment have been negative.
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HOW DOES THE CORPORATE DIRECTOR SEE HIS/HER ROLE?
One of the many steps needed in order for Directors to be held accountable for the performance of the company in all its dimensions (people, profit, planet) is for the individual directors to be on the record with regard to what they consider the role of the director to be.
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DIRECTORS NEED THE RELEVANT INFORMATION
Directors have a lot of relevant information about the company's financial performance. Most of the company's management information systems have the singular purpose of helping the company maximize its profit performance
On the other hand, there is only very limited management information about 'social performance'. To the extent that social performance is on the agenda, it is mainly anecdotal. There are very weak methodologies available to report on the social performance of the company.
The situation with respect to 'environmental performance' is as bad or worse.
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HOW TrueValueMetrics (TVM) CAN CHANGE THIS
TVM enhances the conventional financial accounting system so that there are standard benchmarks for the 'unsustainability' of the key aspects of the company's business, together with company performance relative to these standard benchmarks.
One of the primary benchmarks relates to the payroll of the company, together with the embedded payroll in the products bought and sold by the company. The profile of this payroll gives a very powerful picture of the social impact of the company as it relates to the companies employment practices throughout the supply chain.
Another benchmark relates to the energy used by the company, together with the embedded energy in the products bought and sold by the company. Energy is a major contributor to environmental degradation. Energy consumption in the modern economy is unsustainable in its present configuration, and the level of this unsustainability must be understood.
A third major benchmark relates to materials ... the quantity of material flowing through the company and into sales is an important component of environmental degradation.
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