search
date/time
Cumbria Times
A Voice of the Free Press
frontpagebusinessartscarslifestylefamilytravelsportsscitechnaturefictionwhatson
Ian Garner
Business Writer
2:05 AM 18th June 2022
business

"It Takes 20 Years To Build A Reputation And Five Minutes To Ruin It."

Image by Jürgen Sieber from Pixabay
Image by Jürgen Sieber from Pixabay
One of the leading figures of early American history, Benjamin Franklin, famously said: "It takes 20 years to build a reputation and five minutes to ruin it."

That was true back then and is just as true today.

It’s no longer enough for businesses to focus solely on profit. To be successful, you need to demonstrate your ESG (environmental, social, and governance) credentials.

Earlier this year, the World Economic Forum commented that "Companies are expanding the metrics they use to define success well beyond profit and sales. In response to growing concerns among their employees, customers, investors, and impacted communities, many firms are making themselves accountable for their Environmental, Social, and Governance (ESG) practices. Mainstream investors once considered such measures 'non-financial,' but have come to understand both related risks and opportunities - and are demanding more related data. The amount of ESG information being made available by rating agencies, technology firms, and auditing and consulting firms has exploded as a result, and efforts are afoot to bring more coherence and consistency to it through standards and regulation."

Image by Mary Pahlke from Pixabay
Image by Mary Pahlke from Pixabay
Dr Roger Barker, who speaks on behalf of the Institute of Director's as Director of Policy and Corporate Governance, made the point that “a strong ESG profile is attractive to potential investors, lenders, employees and customers, and helps build the brand of the organisation. Conversely, weak ESG performance is a red flag.”

It is an important issue and recently the global management consultancy McKinsey, reported that
'Purpose and environmental, social, and governance (ESG) issues represent critical challenges for both boards and executive teams. They have become particularly salient since the COVID-19 pandemic, which has forced corporations to scrutinise their responsibilities and role in society'.

Image by Mary Pahlke from Pixabay
Image by Mary Pahlke from Pixabay
With so much is being written on the subject it is fast accelerating up the agenda as a top issue for consideration, especially when commentators like Rupert Younger, the founder of the Centre for Corporate Reputation at Oxford University is quoted as saying: “Purpose does not come at the expense of profitability but, in many cases, drives outperformance.”

There is a frighteningly extensive list of corporate scandals in recent years. They include private sector, public sector and the third sector, involving small enterprises through to substantial international and governmental organisations.

Parts of the NHS, major charities and political parties have been held up in shame. Businesses that are household names have been found wanting. It’s sometimes put down to poor organisational culture and pressures on individuals but in every case it has caused huge damage and lead to a lack of trust.

If you want a sustainable and successful endeavour, you need to build a culture that addresses the full range of ESG issues, it’s not good enough to pick and mix. You never know which one is going to come back to bite you.

If you find this as a possible existential threat to your business and don’t know where to turn for help you could do well to look at the Good Business Charter (www.goodbusinesscharter.com/).

The Good Business Foundation was established in Autumn 2019 to develop the Good Business Charter, the idea of Julian Richer, the initial funder and a trustee of the Good Business Foundation.

The Good Business Charter is a simple accreditation which organisations in the UK can sign up to in recognition of responsible business practices. It measures behaviour over 10 components: real living wage, fairer hours and contracts, employee well-being, employee representation, diversity and inclusion, environmental responsibility, paying fair tax, commitment to customers, ethical sourcing, and prompt payment.

If you aren’t happy with your ESG credentials and fear that you might be exposed, it’s never too late to review your business model and practices and get comfortable with the threat and how you are managing it.


Ian Garner
Ian Garner
Ian Garner is a retired Fellow of the Chartered Management Institute (FCMI) and a Fellow of the Institute of Directors (FIoD). He is Vice Chair of the Institute of Directors, North Yorkshire Branch. https://www.iod.com/events-community/regions/yorkshire-north-east
He is founder and director at Practical Solutions Management, a strategic consultancy practice and skilled in developing strategy and providing strategic direction, specialising in business growth and leadership.
Ian is a Board Member of Maggie’s Yorkshire. Maggie’s provides emotional and practical cancer support and information in centres across the UK and online, with their centre in Leeds based at St James’s Hospital.
The Institute of Directors (IoD) is the UK's largest membership organisation for business leaders, providing informative events, professional development courses for self-improvement, networking and expert advice. The IoD North Yorkshire Branch has members across Harrogate, York and the surrounding towns and is reaching out to business leaders, of large and small enterprises, to help their businesses succeed.