Bringing shared value to reality

Today’s business leaders are expanding their focus beyond a single-minded emphasis on shareholders. In a profound shift from traditional corporate norms, executives are adopting a more inclusive perspective that considers the needs of customers, employees and the broader community.

Broad-minded boards no longer hold stockholder value sacrosanct: today’s watchword is shared value, a business approach that pursues profit generation while also addressing societal concerns. The shared value model looks beyond short-term gains or unfocused charitable work – it presents a long-term vision where companies can thrive while making a meaningful difference in society.

Stakeholders are demanding more than just quarterly profits and a growing number of corporate leaders are ready to meet them halfway. Before making the leap, leaders must first ask themselves: How can boards use data and technology to identify and address changing social concerns, even as they future-proof the business?

Employees, employers and customers have very different ideas of their companies’ role in creating shared value. A sizeable gap exists between what employees want and what executives think they want.

According to an independent study conducted for employment platform SEEK, 63 per cent of Australians want to know what benefits a corporation offers in addition to salary before applying for a job. Australian employees’ top picks for perks include the flexibility to choose their working hours and location, opportunities for mentorship and career coaching, and access to mental health support.

Corporate decision-makers must also take into account an ongoing shift in consumer mindset. Business purpose and ethical and sustainable practices matter more than ever to consumers – research by cultural insights agency FiftyFive5 found 80 per cent of Australians want big brands to positively change the world. Another survey by Colmar Brunton found 73 per cent of New Zealand consumers also say they would stop buying from a brand with irresponsible or unethical practices.

Given the growing economic and workforce uncertainties, leaders must deliver on employee expectations to better retain talent and maintain sustainable business models. They must also contend with increased scrutiny from regulators, in the form of corporate accountability measures such as mandatory climate- related reporting in New Zealand and gender pay gap reporting in Australia.

To resolve the impasse, leaders must consider:

1. Do you have a clearly defined purpose that resonates with employees, customers and the community?
2. Are you holding your company accountable to its purpose, and are you able to monitor and report on this in measurable ways?

To achieve shared value you need better data transparency. Bridging gaps in shared value goes beyond resolving a company’s purpose. It requires pivoting to the right solution. This is where up-to-date data can help identify problems and possible answers.

Data provides a mirror to your organisation, reflecting both internal processes involving employees and shareholders; and external interactions with its customers, suppliers and other partners.

Having the data on hand is just the first step, though. What’s even more essential is having the capability to swiftly translate the data into a narrative that paints a clear picture of how the company is doing. When the narrative is clear, data transcends the numbers and begins to yield compelling stories about your stakeholders.

To help establish narratives, Diligent’s Board Reporting Dashboards contextualises critical business insights into easy-to-understand reports. With this tool, executives no longer need to wade through spreadsheets or presentations full of data to drive strategic corporate decisions. The dashboard and its insights can help directors extract actionable measures and make informed decisions to align shared values for all.

For instance, you can share value with the workforce by investing in upskilling teams or hiring more people for business growth and risk management. By looking at the data, you can determine your company’s skills gaps in IT, sustainability and other core business concerns.

Additionally, you will gain an overview of employees’ skills and aspirations, and identify training opportunities to maintain their competencies in the face of their evolving roles. Properly rewarding and upskilling employees can help retain valuable talent, a pressing issue for company leaders. For 55 per cent of New Zealand directors, labour quality and capability are the most significant issue facing the economy, based on a 2022 Institute of Directors study.

Customers value brands with clearly defined environmental and social benchmarks, along with proactive cybersecurity measures that safeguard their information. Clear board reporting helps align the corporate narrative with the areas that matter most to customers. With boards and executives on the same page, organisations can have more meaningful and data-backed conversation with customers.

Shared value also extends to external stakeholders such as suppliers and partners. With quick access to the right data, you get a succinct view of partnership metrics, covering a wide spectrum of areas, from third party risk management and ethical sourcing to environmental compliance. This helps maintain collaborations based on trust, transparency and shared values.

Shareholders in public companies expect transparency, accountability and growth. To meet these expectations, you need a direct line to data on financial and non-financial performance. With this information in hand, you can course-correct your corporate strategies to more precisely resonate with the shareholders’ growth expectations.

Organisations can hold themselves accountable to values that resonate with employees, customers and the community. With the right data, they can explore how to live up to these stakeholders’ values. In areas like environmental impact, diversity figures or business growth strategies, data can reveal how a company can walk the talk.

However, merely having information on hand isn’t enough. The quality of data and how it’s presented directly relates to the quality of decisions we make. To arrive at the right decisions, we need to make data actionable and ensure it is accurate, complete, reliable, relevant, timely and secure.

The onus is on business leaders to have – or ensure they obtain – access to the right data and insights. Do you have access to data about stakeholders’ expectations and needs? If yes, do you have the tools to make sense of the data strategically and in time? Can you leverage these tools and the data to realise shared value today and in the future? 

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Visit Diligent.com to learn more about Board Ready dashboards and other GRC services.