16 Jun

The Sustainable Development Goals as a Blueprint for Humanity

Sustainable_Development_Goals_Logo

Image result for clive wilsonClive Wilson is author of “Designing the Purposeful organization – how to inspire business performance beyond boundaries”, and is currently writing “Designing the Purposeful World – the Sustainable Development Goals as a Blueprint for Humanity”

 

 

I was inspired and intrigued when I read Michael Schluter’s Relational Thinking Dialogue “Three Relational Concerns about the Sustainable Development Goals”.  I was inspired by the fact that renowned thinkers such as Michael are evaluating the SDGs from a range of different perspectives.  I was also particularly inspired by the specific assessment of how relationships play out (or not) in the delivery of the goals.  The more people that take the time to explore, consider and discuss such views, the more we will come to realise the power of the goals and what else needs to happen in support of them.

My personal approach to the SDGs is probably different to that of many.  The moment I read the published working group draft of the SDGs in 2014, my heart skipped a beat.  All I saw as I read the paper, was a vision that totally corresponded with my own.  The key here is the word “vision”.  The words in the draft goals provided stimulus to my imagination, the vision was what arose in my mind’s eye.  This is what inspired me.

Naturally, the goals have been worked through and converted into detailed narrative, sub-goals, targets and measures, which are vital to forming a cohesive global programme but as I explain in “Designing the Purposeful Organization”, results are simply the measure of our progress to the vision.  They are rarely what inspires us.  We are principally inspired by four things: a sense of purpose; a compelling vision; a felt sense of success; and the knowledge that our talents are being deployed in support of something meaningful.  In this respect the SDGs worked for me and immediately caused me to commit to supporting and celebrating their delivery in the best way I could.

Working on the hypothesis that there would be others in the world who would be equally inspired, I set out to engage with the world in four principle ways.  I established a branch of the United Nations Association focused on the SDGs; I established a Facebook page to support the SDGs and celebrate progress; I started to write my new book “Designing the Purposeful World”; and I started to engage with groups of people from all walks of life (so far in Europe, the US and Asia).

So far I have engaged with thousands of people aged from seven to seventy and in groups from five to five hundred.  I always begin these workshops with a “mind-journey” to 2030 and ask those involved to envisage the world they would like to see (realistically) in 2030 and be happy to pass to future generations.  The amazing thing is that to date at every workshop, what people see is entirely compatible with the SDGs.  I then (and not before) show them the SDGs and they are always amazed how “their world” fits with the goals.  I then simply ask them which goals particularly resonate and in what way.  This is where individuality plays out.  We all see 2030 differently but always in line with the goals.  They leave inspired to take action which they share before leaving.

The beauty of the goals is that they are far from limiting.  At headline level, they apply to the whole world, not just the developing world, even though some of the targets are clearly oriented that way.  And, whilst the specifics may drive specific actions at the formal programme level for the UN and national governments, they certainly don’t need to constrain other players, such as organisations, communities and individuals.  I encourage people to follow the inspiration that a better world for 2030 provides to them and those around them.  Naturally, if a specific goal inspires them, I’m sure they’ll find out more about the details, but I trust and encourage that they won’t allow this to constrain their imagination and innovation.

It is wonderful that Michael Schluter and his colleagues are emphasising the real need to strengthen and exploit relationships in a plethora of ways to make the world a better place and I wish them every success in doing so.

24 May

Thought Leadership Day: The Relational Agenda for Transforming Society – 15 September

Government and business are rapidly evolving due to the social impact of information and communication technologies. The focus on historical data to predict future performance and risk factors, for example, are increasingly irrelevant as the pace of change accelerates. Time pressures on managers continue to increase due to access to information and communication possibilities, so that relationships within and between organisations ironically are coming under greater and greater pressure.

Relational Thinking is a social philosophy which seeks to understand better the nature and value of relationships, how relationships can be measured and how a relational focus can improve performance of companies, schools, public and private sector organisations and government itself. Relational Thinking also speaks to job creation, the Brexit decision, the future of Europe, international peacebuilding and global finance.

What changes if relationships become an end as well as just a means? Our thought leadership day will make it possible for participants to access this new framework of thinking and measurement, and the way it is being applied already across a wide range of sectors and organisations.

Below is the outline for the day. Participants will not be tied down to one track but will be able to go to sessions from both tracks. The sessions will be designed to be highly participative so that those joining us for the day have the opportunity to contribute their thoughts and reflections.

Book your place

08:30 – 09:00 Registration and Coffee
09:00 – 09:10 Introduction to the dayBeris Gwynne
09:10 – 09:45 Where is the Relational Thinking movement going?Dr Michael Schluter CBE
09:45 – 10:45 Plenary: Introduction to Measuring Stakeholder RelationshipsTim Young (TBC) and Clive Parry

and  

Chronomics

John Ashcroft and Michael Schluter

10:45 – 11:30 Coffee
Track 1 Track 2
11:30 – 12:30 Relational CompaniesJonathan Rushworth (TBC) Relational SchoolsDr Rob Loe and Professor Colleen McLaughlin
12:30 – 13:30 Lunch
13:30 – 14:30 Relational Finance and Job-Creation Tim Jones Relational EuropeDavid Lee
14:30 – 15:00 Coffee
15:00 – 16:00 Relational GovernmentJohn Ashcroft, Michael Trend and David Strang Relational PeacebuildingBeris Gwynne and Jeremy Ive
16:00 – 17:00 Plenary: Feedback and Panel Discussion: Next Steps to Grow the Movement
24 May

Relational Cities for Sustainable Development – 13th September 2017

The theme of sustainability has been interpreted up to this point mainly from the environmental perspective. The primary issues addressed have related to air quality, access to sufficient water, consumption of scarce mineral and other natural resources, level and types of energy use etc.

However, arguably, an even more important aspect of sustainability is the quality of relationships between communities, organisations, households and individuals. Without mutual understanding, commitment and respect, cities can cease to be sustainable due to[1]:

  • Inter-ethnic or inter-racial violence;
  • High levels of crime;
  • Excessive demands on the welfare system;
  • High levels of unemployment;
  • Levels of corruption which sow distrust;
  • Hostility arising from wealth and income differentials.

Thus a city’s sustainability depends on the nurturing of relationships through[2]:

  • Strong commitment to family and community;
  • An education system which develops relational skills;
  • Governance of business and public sector bodies which allows sufficient time for employees to fulfil family and community responsibilities;
  • Faith communities which foster positive value systems;
  • Political arrangements which engage communities.

This day conference will give those joining the Relational Thinking Week in Cambridge a chance to hear from others thinking about these questions and join the conversation about policies which can make cities more relational. The conference will also consider both how organisations within the city and the city as a whole can be assessed in terms of the strength of their relationships.

If you would be able give a 10 minute paper in the one of the sessions, relating to one of the themes in that session, please contact Josh Hemmings at j.hemmings@relationalresearch.org.

Sign up for tickets here

09:00 – 09:30 Session 1 – An Introduction to the Relationally Sustainable City
09:30 – 10:45 Session 2 – Building Relationships Within and Between Households and Communities:

  • Importance of family structure and stability
  • The role of schools
  • Policies to create strong neighbourhood and community relationships
  • Overcoming ethnic and racial tensions
10:45 – 11:15 Coffee
11:15 – 12:30 Session 3 – The Role of Town Planning, Infrastructure and Housing in Building Relationships Within and Between Households and Communities:

  • The role of town and city planning in balancing housing with social amenities (parks, leisure facilities, retail etc.)
  • The case for and against high-rise housing
  • Ensuring that high-ways and rail links facilitate relationships between communities and do not divide them
  • Are relational cities always small cities? How small is “small”?
12:30 – 13:45 Lunch
13:45 – 15:00 Session 4 – The Role of Business, Finance and Politics:

  • Employment creation to involve young people in productive work
  • Local sourcing in supply chains
  • City-based growth and employment strategies
  • The role of local government in developing local business and NFPs
15:00 – 15:30 Tea
15:30 – 16:45 Session 5 – Measuring Relational Sustainability of Cities:

  • What metrics are appropriate?
  • How can relational indicators in different sectors be combined into an overall index?
  • How to compare relational sustainability of one city with another taking account of cultural factors?
16:45 – 17:15 Concluding Comments 

[1] The underlying factors which drive trust and “relational proximity” have been spelt out in Ashcroft et. al., ‘The Relational Lens: Understanding, Managing and Measuring Stakeholder Relationships’ (Cambridge: Cambridge University Press, 2017).

[2] See Baker (ed.)‘Building a Relational Society: New Priorities for Public Policy’ (Aldershot: Ashgate, 1996).

03 May

Thought Leadership Day: The Relational Agenda for Transforming Society

St_Catharines_College_Cambridge_night

15th September 2017
St Catharine’s College
£100 – Partner
£120 – Non-partner

Government and business are rapidly evolving due to the social impact of information and communication technologies. The focus on historical data to predict future performance and risk factors, for example, are increasingly irrelevant as the pace of change accelerates. Time pressures on managers continue to increase due to access to information and communication possibilities, so that relationships within and between organisations ironically are coming under greater and greater pressure.

Relational Thinking is a social philosophy which seeks to understand better the nature and value of relationships, how relationships can be measured and how a relational focus can improve performance of companies, schools, public and private sector organisations and government itself. Relational Thinking also speaks to job creation, the Brexit decision, the future of Europe, international peacebuilding and global finance.

What changes if relationships become an end as well as just a means? Our thought leadership day will make it possible for participants to access this new framework of thinking and measurement, and the way it is being applied already across a wide range of sectors and organisations. If you have any questions, please email Joshua Hemmings at j.hemmings@relationalresearch.org

Register here

The Programme

Participants will not be tied down to one track but will be able to go to sessions from both tracks. The sessions will be designed to be highly participative so that those joining us for the day have the opportunity to contribute their thoughts and reflections.

8:30 – 9:00 Registration and Coffee
9:00 – 9:10 Introduction to the dayBeris Gwynne
9:10 – 9:45 Where is the Relational Thinking movement going?Dr Michael Schluter CBE
9:45 – 10:45 Plenary: Introduction to Measuring Stakeholder RelationshipsTim Young (TBC) and Clive Parry

 and

 Chronomics

John Ashcroft and Michael Schluter

10:45 – 11:30 Coffee 

Track 1

Track 2 

11:30 – 12:30

Relational Companies

Speakers TBC

Relational Schools

Dr Rob Loe

12:30 – 1:30 Lunch
1:30 – 2:30

Relational Finance and

Job- Creation

Tim Jones

Relational Europe

David Lee

2:30 – 3:00 Coffee
3:00 – 4:00

Relational Government

John Ashcroft, Michael Trend and David Strang

Relational Peacebuilding

Beris Gwynne and Jeremy Ive

4:00 – 5:00

Plenary: Feedback and Panel Discussion: Next Steps to Grow the     

Movement

 

 

20 Apr

Relational Research Responds to Green Paper on Corporate Governance Reform

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Response to Green Paper on Corporate Governance Reform published by Department for Business, Energy & Industrial Strategy on 29th November 2016.

Jonathan Rushworth and Dr Michael Schluter

Introduction.

The Government is to be commended for bringing into public debate issues of concern over the practice of certain companies which fall short of standards expected in the corporate world. Companies have the benefit of limited liability for shareholders (no liability for the debts and other obligations beyond their investment in the company) and beneficial tax and other treatment and, in return, a certain responsibility to stakeholders and society generally is expected. For companies operating in the private sector (whether listed or non-listed) the standard of behaviour should be overseen by shareholders who jointly have the ownership and controlling interest in companies.

However, encouragement is needed by legislation, regulation and code in particular to provide the framework within which companies should operate.

This generally works well where companies recognise the boundaries and their responsibility to all stakeholders who rely on the company for their livelihood and wellbeing but there are times when society at large (prompted by politicians, business leaders, academics and opinion formers) challenges the legitimacy of the corporate world where unacceptable, sometimes egregious, practices are allowed to flourish.

Many shareholders regard their investment purely as a tradable commodity and, by delegating full authority to the directors to operate the business, have little interest in the underlying business of the company, with its impact on employees, suppliers, customers and wider society, beyond their own financial return. Indeed, shareholders tend to exert little or no control over the behaviour of the directors, nor do they hold directors to account for their actions. Individual capital providers (those investing in companies through pension funds or personal investments) often have no say and their investments are in any event held through intermediaries, for instance nominee accounts or investment funds. The publication of the Green Paper is a necessary recognition that certain aspects of corporate behaviour need to be addressed.

Indeed, many of the proposals for consultation in the Green Paper reflect ideas suggested by ourselves and others that there is an urgent need for a change of emphasis in the purpose of the corporate world from the relentless focus and demand on short-term and ever increasing financial return for shareholders in listed companies, in the form of dividend payments and share price increase, often achieved through share buy backs, towards an approach which recognises and values the benefits of positive, nurtured and mature relationships with stakeholders and their interests. This reflects the value of the company’s social and relational, and not just financial, capital in which companies display commitment to their stakeholder community.

The stakeholders are, as the Green Paper suggests, employees, suppliers, customers and the local community, but we suggest that they should include others who work with or have an interest in the success of the company, for instance financial lenders to the company (banks and holders of tradable debt) and regulators (as representatives of Government and public interest).

There should also be recognition of the responsibility of the company in its relationship not only to the local community but also to society at large.

It should be noted that current legislation recognises this responsibility to a limited extent (in particular in s172 Companies Act 2006) but City Codes in the form of the UK Corporate Governance Code and the Stewardship Code do not address relationships with stakeholders other than shareholders. Third party stakeholders are of course affected by company decisions and operations with little or no direct influence or recourse.

Many companies strive to achieve ethical standards and have active CSR projects but these do not go to the heart of how they relate to employees, suppliers, customers and others who rely on the business for their jobs or livelihood.  Para 2.4 of the Green Paper recognises that many companies are aware of the economic benefits of understanding and maintaining healthy relationships with interested groups such as employees, the local community, customers and suppliers. The paragraph acknowledges that more needs to be done to develop an appropriate model to develop this approach. The paper reflects that the requirements of s172 Companies Act 2006 need to be properly understood and applied. This relates directly to the requirement for the directors to have regard to various stakeholder interests and for the strategic report to provide shareholders with information that will enable them to assess how the directors have performed their duties under s172.

Companies whose interests are aligned with those of its stakeholders and which operate as a community of interests, are likely to be more competitive, sustainable, profitable and overall more successful as well as attracting loyalty from employees, suppliers and customers.

Properly paid employees with promotion prospects who are incentivised (through cash bonuses and share schemes), who are respected and their ideas and concerns listened to, will tend to be loyal to the company, more productive and less likely to leave or be absent from work through illness. Similarly, suppliers who are paid within a short time-frame and on the contractually due date, as well as being supported by the company, are more likely to give loyal commitment and service than if they are treated at arm’s length and with late payment with its damage to cash flow and the threat, for instance, of demands for more payments to display goods and early termination if price reductions are not forthcoming. Customers who are treated with concern and whose complaints are properly, promptly and personally handled will show loyalty and support for the business.

Further, individuals who are shareholders and consider their concerns and interests are listened to and respected as investors, who have prompt access to directors and senior managers and are able to gain an understanding of the business and its plans are more likely to feel a part of the company, show loyalty and take a longer-term view of their shareholding. They will also be in a position of knowledge and understanding to hold the directors to account if the company falls short of standards expected of a properly and responsibly run company. Incentives could be provided to encourage long-term investing (for instance, additional shares after 2 years).

Companies could consider ways to engage more closely with shareholders and other stakeholders on a regular basis. Companies could hold quarterly meetings with shareholders, possibly in different parts of the country and at convenient times of day, encourage attendance, and invite not only shareholders but employees and perhaps some suppliers and customers. There could be break-out groups for shareholders to meet individual directors to discuss different aspects of the business. Face-to-face meetings with directors would lead to greater openness, understanding and trust. Those investors in the company who are the main capital providers would be encouraged to hold shares directly in the company and to attend meetings with the company and other stakeholders.

The Government should encourage, through legislative or regulatory means supported by society as consumers and investors, a change in corporate culture to meet the expectation of employees, investors, suppliers, customers, regulators in the context of the responsibility of the corporate world to the society in which it operates and from which it benefits. Companies which already adopt this approach will be recognised and encouraged and will lead others by example. The debate prompted by the suggestions in the Green Paper provides an ideal opportunity to start to reframe and refocus UK corporate culture in a distinctive and exciting way, making the most of our enterprise, talents and resources, so that all will benefit and the litany of criticism of the corporate world will start to evaporate as faith and confidence is restored. There will be recognition of a more inclusive, responsible, constructive and successful form of capitalism.

A description of some of the problems with aspects of corporate behaviour, an analysis of the underlying causes (going back to company structures developed in Victorian times) and suggested ways to address the issues can be found in Transforming Capitalism from Within by Jonathan Rushworth and Michael Schluter at http://relationalthinking.net/relational-research/

These comments now address the particular chapters and questions in the Green Paper.

Executive pay.

The Green Paper reflects concerns over the increase in executive remuneration over the past 18 years, as mentioned by the Prime Minister. This has caused concern not only as to the amounts in absolute terms (which can have an adverse effect on the company, as less money is available for investing in the business) but more particularly on the impact on other employees in their companies. What does it say, for instance, to a low paid person on the supermarket checkout desk, who works long hours and has a stressful job dealing with customers, that the senior executives in the company are paid maybe 1000 times more than they are? Do they feel that their value and worth to the company is properly recognised? What does it tell them about how their job is regarded by the company? At the very least it does not promote a sense of corporate and shared endeavour.

The senior executives take considerable responsibility (but generally with no financial risk) in their roles and promoting the success of the business but there may be doubt as to whether such generous terms (often paid when the business is not particularly successful) are needed to attract high calibre leaders. The rewards of running a large company successfully are measured not only in financial terms but in their satisfaction and reputation as entrepreneurs and business leaders in achieving success in leading a prosperous company nationally or internationally.

We regard the question of what seems like ever-increasing pay differentials as illustrating a breakdown in the relational understanding and dialogue between those in senior management positions who operate the company on behalf of the shareholders, and the shareholders who have collective ownership rights. In addition to their rights to vote on the company’s pay policy, the shareholders appoint and reappoint directors, who have delegated authority and power to operate the company, and under the provisions of the Companies Act the shareholders have the right to pass a resolution (by simple majority) to remove directors from office. Yet remuneration committees frequently do not seem to have a satisfactory dialogue with shareholders to establish what an acceptable level of remuneration should be and this is reflected in the significant number of AGM’s each year when shareholders voice concern over the scale of remuneration packages.

Question 1: Do shareholders need stronger powers to improve their ability to hold directors to account on executive pay and performance?

We would suggest, as proposed in option (v) of part A (Shareholder voting and other rights), that the Corporate Governance Code be amended so that remuneration committees scrutinise more closely pay levels within the company (from the highest to the lowest), listen to and take into account the views of a range of shareholders, institutional and individual, as well as a range of employees and possibly other stakeholders. In some companies remuneration levels cause an annual battle with significant voting against pay packages at AGM’s. Directors should strive to avoid this as it reflects badly on the company and its image and does not show a consistent approach to the way in which the business is managed. Other ways to give shareholders a greater say in voting on remuneration levels, as suggested in the options proposed, should be considered but only in a way which is practical, given the long-term nature of some pay packages. In addition, there should be clear reporting annually on the nature, scope and details of executive remuneration, its justification and a summary of discussions between the remuneration committee and shareholders.

Question 2: Does more need to be done to encourage institutional and retail investors to make full use of their existing and any new voting powers on pay?

Consistent with the relational approach outlined above, we believe that all shareholders should be encouraged to engage with the company in discussions not only on executive pay but on other aspects of the company’s operation and its relationships and engagement with stakeholders. Clearly the directors are appointed to make decisions on the operation of the company but there should be closer engagement with other stakeholders. Greater disclosure on fund managers’ voting practice is to be encouraged. A shareholder committee could be appointed to discuss remuneration levels and amounts with the board remuneration committee. Individual shareholders should be encouraged as long-term investors (perhaps by tax relief) and their voting encouraged either directly or through their nominee holding arrangements. A greater acknowledgment by companies of individuals who are significant shareholders and access to the directors, perhaps through a liaison committee with the company, would encourage greater interest, loyalty and responsibility by those shareholders. They could, for instance, be named in the annual report and accounts and invited to regular lunches with directors (with employees and other stakeholders).

Question 3: Do steps need to be taken to improve the effectiveness of remuneration committees, and their advisers, in particular to encourage them to engage more effectively with shareholder and employee views before developing pay policies? Do you support any of the options set out in the Green Paper? Are there other options you want to suggest?

As suggested above, there should close liaison between remuneration committees and shareholders, institutional and individual, as well as with employees and possibly other stakeholders. This could be reflected as a requirement of the Corporate Governance Code. The Code could reflect a requirement that the remuneration committee should have a measure of independence from the board of directors of the company. They could report each year how they have approached their role and summarise the consultation they have undertaken and why they consider their recommendation to the board as to the level of remuneration for executives is reasonable and proper and in the interests of the company, not just in terms of a comparison with other companies of similar size in the sector but also in the context of all remuneration levels within the company.

Question 4: Should a new pay ratio reporting requirement be introduced? If so, what form of reporting would be most useful? How can misleading interpretations and inappropriate comparisons (for example, between companies in different sectors) be avoided? Would other measures be more effective?

The issue of pay differentials and the impact they can have on a company workforce and in the mind of the public is considered earlier in these comments. Remuneration levels make headline news and cause shareholders to vote against resolutions at AGM’s, although rarely with sufficient numbers to prevent a resolution being passed (by simple resolution). To encourage directors and remuneration committees to come to reasonable views on pay levels throughout a company (or group of companies) it would be helpful for different levels of pay to be disclosed, alongside the report of the remuneration committee as suggested above. This would follow the practice of a number of companies, so that the number of employees within different payment bands would be disclosed, from the lowest to the highest paid. The report would explain the appropriateness of the differential for the business of the company and the sector in which it operates. The company would explain its policy and approach to remuneration at all levels and why, for instance, limited or no increases are given at some levels but increases are proposed at other levels. If the company outsources a significant amount of its business or has self-employed workers, consideration should be given to equivalent disclosures for the third-party contractor and self-employed workers, to encourage transparency.

These disclosures would ensure that companies have considered remuneration levels carefully throughout the business and require them to justify their approach. It would also enable comparison to be made between businesses in the same and similar sectors. The requirement for disclosure should be such that a consistent approach is encouraged by all companies which comply.

Question 5: Should the existing requirements to disclose targets that trigger annual bonus payment be strengthened?

A relational approach reflecting openness and dialogue between stakeholders suggests full disclosure but we believe that grounds of genuine sensitivity or confidentiality should be respected.

Question 6: How could long-term incentive plans be better aligned with the long-term interests of quoted companies and shareholders?

We consider that the interests of the company and its shareholders would be best served by incentive share (or cash bonus) schemes being established for all levels of the company’s employees. Simple long-term non-contributory schemes could be devised for all employees in the form of exercisable options or the issue of shares assuming various targets are met. Such targets would include investment in and expansion of the business by organic growth. Tax relief would be given if options are exercised or shares awarded if they are held for a set period of time.

Strengthening the employee, customer and wider stakeholder voice.

Question 7: How can the way in which the interests of employees, customers and wider stakeholders are taken into account at board level in large UK companies be strengthened?

The Green Paper acknowledges that many companies recognise the benefits of engagement with stakeholder interests in their business activities and that economic benefits are derived from bringing external perspectives to bear and in properly understanding and maintaining healthy relationships with interested groups. As explained above, we suggest that engagement with stakeholders, having a continuing dialogue with them to understand their interests and values, listening to their views, treating them with respect, seeking a common goal and recognising issues over the running for their business and their contribution to the success of the company (whether they are employees, suppliers, customers, the local community, lenders or regulators) is essential for the operation of a successful and productive company. In other words, this engagement and recognition goes much beyond just an economic and financial goal.

Further, we consider that companies cannot have effective risk management unless stakeholder relationships have been understood, analysed and properly managed. This applies not only to external relationships with suppliers, customers, shareholders and regulators, but also with regard to relationships with employees, internal audit and partnerships and relationships with other group companies in groups which have holding companies and subsidiaries. The risks may be generated by the actions of external parties, inadequate engagement by the company’s own management team, or a weak relationship between senior management and those holding the client or other stakeholder relationship. In every case, sound relationship management practice will reduce the risks faced by the company.

The Green Paper recognises the need to find new ways for boards to connect with a wider range of interested stakeholder groups, beyond the shareholder base, whilst acknowledging that many companies have constructive practices in this regard.

The concern, as raised in the Green Paper, is that in many cases the intention and meaning of s 172 Companies Act 2006 is not properly understood and applied. There has been debate over the meaning of the words “have regard to” and the level of consideration that should be given to the interests of the stakeholders specified and, indeed, the scope of stakeholders, for instance where the wording refers to “and others”. Although s 414 requires the strategic report to provide shareholders with information that will enable them to assess how the directors have performed their duties under s172, there is a question as to how companies are complying with this requirement beyond the required disclosure on the specific matters mentioned in the section, for instance with regard to environmental and employee matters, as summarised in Appendix B of the Green Paper.

The Green Paper suggests how companies could be encouraged in their decision-making and operations to give more prominence to the interests of all stakeholders, so as build confidence that the provisions of s172 are properly understood and applied. We now comment on these suggestions and make a proposal for an agency with statutory authority to oversee and give guidance on best corporate governance practice.

Option (i) suggests that one or more stakeholder advisory panels could be formed for consultation with the directors on specific topics (for instance directors’ remuneration) or items relevant to those stakeholders, for instance relationships with suppliers. Such panels would need to be properly constituted and operated and given due respect and regard to their views by the board. The scope of their remit and responsibility would have to be established and there would need to be an understanding that individual representatives do not promote their own interests but the stakeholder group as a whole which they represent.

There would be questions as to how members of the panel would be appointed, for how long and how they take views for the stakeholder groups represented. An employee representative group, for instance, could be elected for different levels of seniority of employees for a set term (would the trade unions be involved?). Representatives of suppliers and customers might be harder to find and elect on any continuing basis as the members of both groups might be likely to change regularly. This would of course depend on the nature of the business. Suppliers to a company may compete with each other and therefore forming a cohesive group to represent might be difficult. Some stakeholder groups would be more likely to be cohesive and able to choose and influence a representative, while others would be unrelated individuals. Connected stakeholders would be more easily represented that disparate ones.

The relationship between the board and stakeholder panels would have to be such that the consultation process was not seen as just another formulaic, mechanistic process. This would be supported by a reporting requirement on the activity of the panels, their procedures and process for liaising with the board and how the board takes their views in account on relationship and company matters more generally. The panel and the board would need to keep under review the relationship and dynamics of different stakeholder groups and ensure that all relevant stakeholders are represented.

Option (ii) suggests that existing non-executive directors are designated to ensure that the voices of key interested groups, especially that of employees, are heard at board level.

We see merit in this suggestion in that it would bring a representative voice for the main stakeholders with an interest in the business directly into the board room. However, non-executive directors are not intended to be engaged in detailed operational matters and they only devote part of their time to the non-executive role. The practical aspects of engaging with stakeholders and understanding and promoting their interests in a balanced but effective way, with the time which would be expected to carry this out effectively, seem to be more in the remit of an executive director. A detailed knowledge and understanding of the business and how stakeholders engage with and contribute to the success of the business would be required to carry out the relationship role.

To give this responsibility to an executive director would recognise the significance of stakeholder interests in corporate decision-making and planning at the board level and throughout the business. Creating a post of Stakeholder Relationship Director would send a clear message to the corporate world and society in general that companies will move to a more stakeholder-inclusive approach and away from a narrow finance driven shareholder focus. Such a director would therefore have similar status at board level as, say, the finance director. As with option (i) the stakeholder representative director and the board would need to keep under review the existence and dynamics of stakeholder groups and relationships and those whose interests are represented.

Although certain non-executive directors may have the interest, personality, character and time to understand and represent the interests of stakeholders at board meetings, this is unlikely to be as effective as a director employed by the company with a full-time role to work with the other directors and employees to understand, measure the strength of and promote the interests of those stakeholders who have a close financial and wider interest in working with the company. The appointment of a director with responsibility for stakeholder relationships would avoid an election or other choice for a stakeholder representative panel as described above. Further, the director should have a degree of longevity in the post, whereas panel members may change more rapidly and would in any case devote less time and have less knowledge of current developments in the company.

Option (iii) suggests that individual stakeholder representatives would be appointed to company boards.

For the reasons set out in the Green Paper, we think there are difficulties with the idea that particular stakeholder groups would have a representative on the board. Difficulties over choice and changes in the represented group, as well as the conflict and balance of interests, could undermine what is intended to be achieved.

Option (iv) suggests strengthening reporting requirements related to stakeholder engagement.

This is a key suggestion as the reporting requirements could help to explain what is expected of directors in having regard to the various stakeholder interests mentioned in s 172. As the Green Paper states, there are already some detailed reporting requirements but this could be developed further to widen the range of interests which should be considered and addressed.

There are many examples of disclosures which could be required, in addition to or expanding current requirements. The company could be required to disclose its policy towards stakeholder recognition and relationships, the directors’ approach to measuring the quality of these relationships, how it has engaged with the various groups of stakeholders and how their legitimate interests are met on the basis that this is in the best interests of the company and its shareholders. This we suggest goes further than the ideas proposed in paragraph 2.33 (which are in themselves very positive), as they would require disclosure not only that different stakeholder interests have been given consideration, but demonstrate the approach and action taken by the company to understand and measure the strength and quality of the relationship, the results of such exercise and how it can be developed for the benefit of both parties to a particular relationship and stakeholders generally. In other words, it is not sufficient to report that there is a framework for engagement and measurement in place but the disclosure would have to show that it has been applied in practice and the actions taken as a result. The suggestions in paragraph 2.33 would add to and complement the disclosures about the relationships, their strength and how they can be improved.

Clarity of, and justification for, the remuneration packages of senior executives would be required to be disclosed and a summary of the process which led them to be recommended to shareholders. This would set the scene for their being put to shareholder vote. Disclosure could be required as to how the company engages with the interests of employees beyond current disclosure requirements, for instance how much weekend and overtime work is required, confirmation that share purchase schemes for all employees funded by the company are provided, the minimum pay scales and disclosure in bands of remuneration for all employees and details of any discussion forum with different seniority levels of employees.

With regard to supplier disclosures could be made, for instance, of evidence of building close and understanding relationships, for instance with payment on time or earlier (with no more than a 30-day payment period), help with IT and no penalties or requirement for additional payments for displaying goods. Disclosure would be required of incentives to encourage long-term holdings of shares by investors and engagement with individual as well as institutional shareholders. Clarity would be needed of tax paid and rates in countries where the company’s and group profits are earned, with full disclosure of any schemes or mitigating factors for lower taxes being paid.

If detailed guidance is given as to the disclosure requirements on a variety of aspects affecting companies’ operations, examples of which are given above, this would enable there to be greater scrutiny of their approach to stakeholder groups and their regard to the society in which they operate and from which they benefit. It would also be possible to compare the attitude and performance of companies in the same or similar sectors or across sectors, recognising that businesses may need to approach stakeholder engagement and support in different ways depending on the nature of the business and which stakeholders have a significant interest. Shareholders, analysts and the wider public would then be able to judge the level of responsibility of companies and their legitimacy in the context of their role and responsibility in society. The disclosure exercise would help to set a new standard for acceptable business practice and to help to redefine the identity of the corporate world with values of fairness, inclusiveness and transparency. Companies which meet the standards of acceptable business practice, of which there will be many, will be recognised and encouraged, by attracting goodwill, investors and customers or clients, and this will lead others by example to improve their practices.

In summary, we consider that all listed companies (and non-listed companies of a certain size measured by number of employees or shareholders) should appoint an executive director with responsibility to engage, where practicable, with all relevant stakeholders who work with or for the company or otherwise rely on the company for their livelihood or wellbeing (as well as the local community and society more widely). The director would measure the strength and quality of such relationships, in the context of the business of the company and its responsibility to society, and work with the directors and management more widely to understand and improve the quality of the relationships, as well as ensuring that their interests are taken fully into account in decision-making in the company’s operations, not only at board level but throughout the company (and any group companies) and its management. The director would be responsible to ensure that detailed reporting requirements as to the company’s policy with regard to these relationships and how the company has taken their interests into account (as summarised above) are complied with.

The board as a whole will share the responsibility of the appointed director to take the interests of the relevant stakeholders into account in the company’s decision-making and operations as well as in its general approach to its business. In this way, we would expect that a change in culture will take place over time with a recognition of the value of positive and constructive relationships with stakeholders which will lead to a more inclusive, stable and successful model for the company’s operations and responsibility. The directors, employees, shareholders and all others dealing with the company will see the benefit of this to the company, and employees, suppliers, customers and others who are more likely to wish to be employed by, or otherwise engage with, the company.

An analysis of the meaning of relationships and how they can be measured, improved and reported on can be found in The Relational Lens by John Ashcroft, Roy Childs, Alison Myers and Michael Schluter (published by Cambridge University Press 2017).

Question 8: Which type of company do you think should be the focus for any steps to strengthen the stakeholder voice? Should there be an employee number or other size threshold?

Although we consider that all operating companies should adopt an approach which values engagement with stakeholders and puts their interests at the heart of the company and its operations, the suggestion for a director to have responsibility for this and the reporting requirement may be appropriate for companies of a certain size. The threshold could be the number of shareholders (the greater the number the greater the likelihood of shareholders taking less interest and having less say in the operations of the company). Other tests might be applied, for instance turnover and number of employees.

Question 9: How should reform be taken forward? Should a legislative, code-based or voluntary approach be used to drive change?

The framework for additional reporting requirements outlined above could be included in a revised s 414 Companies Act 2006. The additions could presumably be introduced as secondary legislation by statutory instrument, as other changes were recently made to s414 by this means. It may not be appropriate or necessary to legislate for the requirement for a director with responsibility for stakeholder engagement. The Companies Act, for instance, does not include any requirement for listed companies to have a finance director. Perhaps the new role could be set out in an amendment to the UK Corporate Governance Code, which would of course need the support of the FRC. Listed companies would then be subject to the requirement on a “comply or explain” basis. There would therefore be scrutiny to see which companies adopt the new structure and which do not. Pressure through publicity would be put on those which did not and the reasons they give for not doing so.

Corporate governance in large privately-held businesses.

Question 10: What is your view of the case for strengthening the corporate governance framework for the UK’s largest, privately-held businesses?

It is reasonable and proper that all companies should adopt and follow the highest standards of corporate governance. However, many private companies are small and there are issues of scale and cost for such companies in particular as to the level of formal requirements, whether they are through legislation or regulation, which it is reasonable for smaller companies to adopt. We consider that even the smallest companies should adopt through their constitution or by directors’ resolution a responsibility to operate in the interest of all stakeholders, recognising that there is value for the success of the company in doing so. A broader more detailed code could be developed in conjunction with the FRC as a framework to guide larger private companies in matters of governance (for instance remuneration and audit committees). A scale of detailed codes could be developed which would apply to private and public companies depending on size, measured by turnover or number of employees or shareholders. The full Code requirements would apply to listed companies (whether full or AIM listings).

Question 11: If you think that the corporate governance framework should be strengthened for the largest privately-held businesses, which businesses should be in scope?

This question is answered under Question 10 above.

Question 12: If you think that strengthening is needed how should this be achieved? Should legislation be used or would a voluntary approach be preferable?

In order to guide directors of all but the smallest companies as to the meaning of directors’ duties in s172, legislation (by statutory instrument) could adopt some of the disclosure requirements as outlined above by adding to the requirements of s414. Code requirements, as outlined above, could address other issues.

Question 13: Should non-financial reporting requirements in the future be applied on the basis of a size threshold rather than based on the legal form of a business?

As mentioned above, all companies should operate with the highest corporate governance requirements in the interests of all stakeholders. The argument for greater disclosure required for listed companies is that they have the greater “relationship distance” from shareholders, and often a short-term horizon with little engagement between directors and shareholders. The disclosures enable not only shareholders to see how the company matches up to expected standards of corporate behaviour, but also other stakeholders, for instance employees, and society more widely, including analysts and the press. This allows for significant scrutiny of the actions of the directors and opportunities to hold them to account.

As for other companies, there needs to be a balance between encouraging smaller companies to adhere to the necessary requirements and over-burdening them with disclosure requirements. However, it should be possible to introduce requirements of different levels for different sizes of company based on number of shareholders, employees and turnover. There may be little benefit in trying to achieve a consistent threshold for all situations, as circumstances and the reason for the reporting requirements vary.

Other issues.

Question 14: Is the corporate governance framework in the UK providing the right combination of high standards and low burdens? Apart from the issues addressed specifically in the Green Paper can you suggest any other improvements to the framework?

In addition to the suggestions above which involve internal company practices, we suggest that a statutory agency be established with responsibility to monitor the corporate governance standards of listed and large unlisted companies. It would be an independent body which would assist companies to understand their responsibility to stakeholders including society at large and would advise on the measuring and reporting of the quality of stakeholder relationships and on other aspects of corporate governance and reporting.

South Africa King IV Code.

We consider that, as part of the consultation exercise, there would be merit in considering the Report on Corporate Governance for South Africa which was published by the Institute of Directors in Southern Africa on 1st November 2016, incorporating the King IV Code on Corporate Governance. It takes a different approach in a number of respects to the UK Code. It includes extensive narrative explaining the background to and reasons for the latest version of the Code, following earlier versions, developed under the chairmanship of Professor Mervyn King. Corporate governance is considered as the exercise of ethical and effective leadership by the governing body towards achievement of the following governance outcomes:  an ethical culture, good performance, effective control and legitimacy.

It sees the governing body’s primary governance role and responsibilities as steering the organisation and setting its strategic direction, approval of policy and planning to effect the strategy and direction, ensuring accountability by, for instance, reporting and disclosure, and it oversees and monitors implementation, execution and management. Its underpinning philosophy of sustainable development includes integrated thinking (connectivity and interdependence), the company as an integral part of society, corporate citizen status and stakeholder inclusivity.

The 17 principles of the Code reflect requirements, amongst others, in respect of: ethical and effective leadership by the governing body; an ethical culture; the need to be a responsible corporate citizen; appreciation of the inseparable elements of value creation (core purpose, risks and opportunities, strategy, business model, performance and sustainable development); the quality of reporting; composition of the board (executive and non-executive); evaluation of its performance; committee appointments; opportunities and risk; technology and information governance; remuneration policy;  and investment responsibilities of institutional investors. The requirement for compliance with the Code is on a “apply and explain” basis, in contrast to the “comply or explain” basis of the UK Code.

Stakeholder-inclusive approach.

There is a particular emphasis on the stakeholder-inclusive approach which recognises that there is an interdependent relationship between the organisation and its stakeholders. Its ability to create value for itself depends on its ability to create value for others. Pursuant to this approach the governing body takes account of the legitimate and reasonable needs, interests and expectations of all material stakeholders in the execution of its duties, in the best interests of the organisation over time. Instead of prioritising the interests of the providers of financial capital, the governing body gives parity to all sources of value creation, including social and relationship capital as embodied by stakeholders.

The concept involves the balancing of interests over time by prioritising and trading off interests in some cases, in the best interests of the organisation over the longer term. The stakeholder-inclusive approach means that the best interests of the company are not necessarily always equated to the best interests of shareholders, so shareholders do not have a predetermined precedence over other stakeholders. It is an inclusive, stakeholder- centric approach in contrast to a shareholder-centric approach.

Paragraph 16 of the South Africa Code.

The stakeholder-inclusive approach is reflected in Principle 16 of the Code requiring the governing body to adopt the approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. There is a requirement for the governing body to take responsibility for the governance of stakeholder relationships by setting the direction for how they should be approached and conducted. The body would oversee stakeholder relationship management which results in management of stakeholder risk as an integral part of organisational-wide risk management, mechanisms for engagement and communication with stakeholders and also measurement of the quality of material stakeholder relationships and appropriate responses to the outcomes.

Although there are disclosure requirements including an overview of arrangements for governing and managing stakeholder relationships, actions to monitor the effectiveness of stakeholder management and how outcomes were addressed, they do not extend to disclosure of the results of the measurement of the quality of material stakeholder relationships.

Conclusions with respect to King IV.

Although the stakeholder-inclusive approach of the South African Code may not be considered appropriate in detail for the UK, the recognition of the value of stakeholder engagement and relationships is aligned to the overall approach to this aspect contained in the Green Paper.  It is suggested that a detailed analysis of the South African Code and its background and operation could yield value as part of the consultation exercise addressed by the Green Paper.


Jonathan Rushworth is a retired solicitor, whose legal career was at a major City of London law firm. He was a partner in the firm with a broad ranging company and finance practice. In addition to pursuing charity and history interests since retiring from legal practice, he has worked with Michael Schluter and others on the analysis and practical approach to put relationships and the interests of others at the heart of society rather than a focus on the rights and interests of the individual with a narrow materialistic approach. He co-authored with Michael Schluter ‘Transforming Capitalism from Within’ (2011).

Dr Michael Schluter trained as an economist before working as a research fellow with the International Food Policy Research Institute, and as an economics consultant with the World Bank in East Africa. Michael has launched many charities whose work includes international peace-building (Concordis International), alternative finance (Allia) and social policy (Credit Action). He is co-author of The R Factor (1993), The Relational Manager (2009), Transforming Capitalism from Within (2011, with Jonathan Rushworth) and The Relational Lens (2016). He is an experienced speaker who has addressed audiences all over the world, and was awarded a CBE in the Queen’s new year honours in 2009.

Relational Research Ltd, Future Business Centre, King’s Hedges Road, Cambridge CB4 2HY.

15th February 2017

16 Mar

Using Relational Analytics to Understand, Measure, Manage and Improve Relationships – Course in Geneva

GenevaCourseGenGraphic Edited

Relational Metrics is a statistically validated way of measuring relationship quality.

Using it, you can address organisational relationships that are hurting profitability, efficiency and productivity anywhere in your organisation’s ecosystem.

Relational Analytics is running a 2-day course in Geneva, 28-29 March, which provides the basis for full accreditation as a licensed user of Relational Metrics and enables you to join the community of practice.

You can Register here.

 

Programme

DAY 1: Relational Management & Relational Metrics

Michael Schluter introduces the key ideas around measurement of relationships in organisations. He and his team show how these methods enable more effective analysis and provide data allowing organisations to enhance performance and meet social and relationship reporting requirements.

DAY 2: Enhancing Performance

For you to sharpen your ideas for implementing Relational Metrics in your organisation, the team will review the use of the Relational Metrics in assignments across multiple sectors. Particular attention will be paid to the potential for Relational Analytics to increase the effectiveness of multi-stakeholder partnerships in achieving development and humanitarian goals.

TIME/PLACE /BOOKING

9:00 to 17:00 daily

28-29 March 2017

Impact Hub, Rue de Fendt 1

1201 Geneva

Non-residential

Price

Full Price CHF 1,200 (Government/Corporate)

CHF 800 (NGO),

CHF 600 (individual)

Includes lunch/refreshments

SPEAKERS

berisgwynne-300300

BERIS GWYNNE was an ambassador for the Australian Foreign Office before representing one of the world’s largest NGOs to the UN in Geneva.  She is also founder of Incitāre – a platform to support accelerated achievement of the UN’s Sustainable Development Goals.

TEAM-Michael

Dr. MICHAEL SCHLUTER CBE is an economist, former World Bank consultant, and social entrepreneur. He co-originated the Relational Proximity® Framework. He is founder of Relational Thinking and Chairman of Relational Analytics.

joshuaross2

JOSHUA ROSS holds a Ph.D from Cambridge and taught mathematics at two Chinese universities before chairing the Regional Board of an International NGO. He is responsible for the Relational Analytics technology platform (RAMP).

vincent-neate-2

VINCENT NEATE is the CEO of Relationship Capital Strategies Ltd., and has been active in the field of corporate responsibility for over twenty years, latterly as the partner in charge of the Sustainability Practice at KPMG.

17 Feb

Measuring Relationships: a route to competitive advantage and reduced risk

Mervyn King

This article originally appeared as a blog on the International Integrated Reporting Council website. It is reposted with permission from the International integrated Reporting Council.

Corporate failures and scandals often have deep relational roots. So too does success, for the essence of any business is to invite people into relationship as investors, customers, employees or suppliers and to make such relationships more valuable. Yet, as the authors of The Relational Lens recently published by Cambridge University Press point out, these relationships are too often like dark matter – the fabric of the universe that passes unseen.

As a global leader on corporate governance and reporting I have advocated since 1994 that in its decision making process a board needs to take account of the legitimate and reasonable needs, interests and expectations (NIE’s) of its primary stakeholders.

Either management must have an ongoing communication with stakeholders or a Corporate Stakeholder Relationship Officer (CSRO) should do so. The CSRO informs management of the stakeholders’ NIE’s and does a written report to the board on the quality of the relationships.  At every board meeting there should be an agenda item “Stakeholder relationships.”  This will result in the board having an oversight which is informed in regard to managements’ proposals on strategy.

The Salz Review into Barclays, the National Commission on the BP Deepwater Horizon Oil Spill, the Inquiry into the death of Victoria Climbie (a major UK public service failure), or indeed the reviews into almost any corporate failure show that weaknesses in relationships between the company and its stakeholders are readily identified after things have gone wrong. But would Volkswagen or Deutsche Bank have landed in their current situations if their internal and external stakeholder relationships had been better founded and managed?  Could the many corporate disasters, of which Enron, Lehmans, Cendant, Worldcom, HealthSouth, Tyco, Qwest Communications, Toshiba, BP and Arthur Andersen are just some of a long litany, have been avoided by a more systematic management of stakeholder relationships?

Restoring confidence in corporate, political and other institutions will require more than clever PR. It requires systematic measurement and reporting on the quality of relationships with all major stakeholders so that companies can take specific steps to address the key issues seriously.

Andy Haldane, Chief Economist at the Bank of England puts it this way in his comments on The Relational Lens: “There is widening acceptance that organizations – large and small, public and private, commercial and charitable – may be failing to meet the needs of their societal stakeholders. This has, in some cases, caused a rupturing of trust, a loss of social licence. This book … equips companies with the tools to begin the slow process of rebuilding trust, relationship by relationship.”

In corporate reporting on social and relational capital, companies have too often resorted simply to recording their CSR spend. With integrated thinking and embedding sustainability issues into a company’s business strategy CSR has become yesterday’s thinking.

The lack of available quantitative measures is perhaps the main reason why the boards of companies, as well as executives and managers, invest so little monetary, temporal and other resources into understanding, managing and measuring relationships with their stakeholders.

A way forward is shown by the new book by John Ashcroft and his colleagues, based on over 20 years of measuring relationships within and between organizations across the public and private sectors, as well as in different parts of the world. They demonstrate persuasively that all relationships operate in 5 domains – communication, time, information, power and purpose. Using these 5 domains will aid the CSRO in carrying out their mandate.

This approach identifies whether the conditions for effective relationships are being put in place and identifying perceptions gaps around the effectiveness of such measures. Looking at the preconditions for relationships serves as a way to assess a leading indicator of risk, focuses on the relational building blocks of such outcomes as trust, accountability or loyalty, identifies the factors that can be managed and changed, as well as enabling more constructive and effective dialogue about the issues identified.

All that makes this book timely, especially for the corporate world.

Here is the framework, here are the tools and the case studies to enable companies to give stakeholder relationships the kind of detailed and systematic attention which will bring an informed understanding to a board about a company’s social capital, and help bridge the divide between financial and social capitals.

‘The Relational Lens: Understanding, Managing and Measuring Stakeholder Relationships’ was published by Cambridge University Press in October 2016. A video of the launch can be found at Relational Analytics.

Author: Professor Mervyn King SC, Chairman, International Integrated Reporting Council

Photo: Mervyn King by Sveriges Kommunikatörer on Flickr.

11 Nov

The Relationship of Relationships to Productivity

productivity

Connecting the Dots

Economist Paul Mills gave a remarkable speech at the annual conference of the Relational Thinking Network in Cambridge at the end of September. He examined a range of subjects, offering “relational solutions” to global financial instability.

It was fascinating to see the connections made between seemingly unrelated matters, showing that our current economic model is geared towards proliferating and exacerbating the pains of ordinary people suffering at the hands of an inherently flawed and unjust economic system.

In his talk, Paul connected the dots on a range of topics – the housing market, household debt, wage stagnation, income inequality, structural flaws in the banking model, corporate structure, the implication (and responsibility of) limited liability, taxation, the intergenerational crisis, and so on. Against each of the key areas, some relationally grounded solutions were briefly explored. Several days later, the implications of all that are still sinking in.

The most surprising fact however, lay tucked away in a one of the presentation slides:

“the declining rate of productivity growth”

Productivity Growth

Why is this significant? Because growth in productivity can be regarded as one essential factor which could help to dig us out of the current global economic doldrums.

I later learned I wasn’t the only one to have picked up on it. While discussing the day’s events over a drink at the pub, several of us mentioned our surprise at the notion of declining productivity growth which we all assumed was at an all-time high, given the age of technological proliferation in which we are living.

I had asked Paul about this during the coffee break and he explained that “most of the low hanging fruit” of technological innovation had already been “picked”, and that what lay next on the technological horizon was costlier progress in areas such as energy and transport – requiring far greater infrastructural investments.

My Experiences

This is where I got to thinking and to connecting what Paul had said to my personal experiences as a business consultant working in the relational field, and helping organisations to achieve growth in the three domains of culture, profit and social impact.

My experience has been that individual and team performance is underpinned by engagement and motivation. We know from numerous polls (Gallup, KPMG, Deloitte etc.) that workplace engagement is roughly stagnant around 35-40%. That means ~60% of the average workforce are either actively dis-engaged or only passively engaged – with immense and perhaps obvious implications for individual productivity and company performance. My experience (and the research bears this out) has also been that engaged people represent more productive (as well as happier) people. My experience has also been that good relationships lie at the very heart of well-functioning teams and thus are critical to engagement and productivity. This is the common thread of all facets of the Relational movement, that relationships underpin healthier, happier, more productive people and societies.

In other words, we may be overlooking our greatest opportunity for growth in productivity. Instead of looking to technology alone to fuel growth in productivity, is it time we reversed the equation and looked to relationships to fuel productivity and technological growth?

Consider the invention of smartphones. No doubt, these are an outstanding technological innovation with immensely positive implications for growth in productivity. Yet, that growth in productivity, can (and has) been turned on its head when the use of that technology overtakes its intended optimum: overuse of a smartphone can cause chronic back and neck pain, especially in the cervical spine due to the lengths of time we hold it in positions which are un-ergonomic. Lengthy exposure to the electro-magnetic fields that it emits are considered by many to be harmful to health and can deplete energy. One only has to do a quick Google search to learn about the detrimental impact of smartphone overuse on face-to-face relationships, even marriages. Smartphone overuse has also been linked to sleep deprivation, depression, anxiety and several other disorders. Thus, our relationship to technology can not only serve to increase our productivity, but it can also threaten and undermine our productivity!

My point is this. The next phase of growth in productivity should come from deeper engagement with ourselves and our contexts; with our friends, class mates, families, colleagues and the strangers we have the opportunity of meeting.

The Relational Lens

Thankfully the relational model offers a clear pathway for doing this through the Relational Health Audit – a tool designed to assess the health of key business relationships and for developing those relationships to increase engagement and productivity. The 5 dimensions or pillars of successful relationships are:

  1. Directness – the nature and style of communication
  2. Continuity – the degree to which a relationship shares a common thread of past, present and future
  3. Commonality – the degree to which a relationship shares common goals
  4. Parity – the balance of power in a relationship
  5. Multiplexity – the variance in the contexts within which you know or have known someone

The tool measures the perception of relationships in respect of the above dimensions and the difference in perception is where the gold dust lies. As Rob Loe pointed out during his talk on the Relational Schools project at the Cambridge conference: “perception is reality”. Thus, understanding and comparing individual perceptions of a relationship provides the essential first step to understanding its strength. The differences in perception provide the areas of focus for exploration and they in turn give rise to the powerful interventions which can be applied to improve a relationship.

So while we continue to navigate the treacherous waters of global financial instability, we can start to make strides in a positive direction by expanding our relational lens to increase engagement, productivity and the raft of other associated benefits in the workplace. Perhaps a return to solid relationships will be our greatest weapon in the battle to return to long term financial and social stability.

Nashak Billimoria
Founder, BeUnlimited
http://www.be-unlimited.org/

19 Jul

RTN Members and Partners day – “Beyond Financial Capital”

partnersmembersday

We are pleased to announce that there will be a special day for all Members and Partners of the Relational Thinking Network (RTN), at St Catharine’s College, Cambridge, on Friday 30 September 2016.

The RTN Members and Partners day is a place where you can create and build relationships and where corporately and individually we can make progress in our thinking about how the ideas of Relational Thinking work out in our lives and world.

Our keynote speaker this year will be Dr Paul Mills, Senior Economist with the IMF (speaking in his own capacity), who will be speaking on the topic “Beyond Financial Capital: Relational Solutions to Global Financial  Instability”.

Other presenters throughout the day include:

  • Beris Gwynne, Chair of the Relational Peacebuilding Initiative
  • Rob Loe, Director of Research of the Relational Schools Project, and
  • Tim Young, Director of Renuma.
  • Peter Lacey, Partner at Whole Systems Partnership
  • Michael Trend, Executive Director of Relationships Foundation

The afternoon program will offer more opportunities to engage with each other and the ideas of Relational Thinking.

So, bring your questions, thoughts and comments and be open to learn as you hopefully join us and others in the extended Network for what is likely going to be another thought provoking and inspiring event.

The cost is £65. To sign up, or to find out more, please email Joshua Hemmings at j.hemmings@relationalresearch.org

07 Jul

Inventing the Individual – Book review

Individualism - People

Individualism and the near global preoccupation with the self and the interests of the self is increasingly becoming the norm everywhere.

This norm is an abnormality. It is destroying the foundations of what makes life meaningful, and long lasting human relations and fulfilment possible. From time immemorial humanity has been characterized by the idea of community and commonality. This ancient norm is perhaps wired into our human genes, and correctly defines a key aspect of what truly makes us human. The rise of the solitary individual, and ‘the lonely crowd’, is a paradox that has been the focus of many studies. The English poet John Donne immortalized the powerful message that:

No man is an island,
Entire of itself,
Every man is a piece of the continent,
A part of the main …
If a clod be washed away by the sea,
Europe is the less.

Any man’s death diminishes me,
Because I am involved in mankind,
And therefore never send to know for whom the bell tolls;
It tolls for thee.

Larry Siedentop’s book, Inventing the Individual – the Origins of Western Liberalism, demonstrates that Individualism has not always been an essential part of the Anglo-American/European ethos or of non-Western, non-European societies either. It is a new invention which arose at a certain point in the history of these societies. This development was however, progressive, eventually preferring an “association of individuals rather than an association of families” (p129).

Central to Siedentop’s argument is the pivotal role played by the medieval Church. He pays special attention to the rise of monasticism and the teachings of the Church fathers and intellectuals, such as Bonaventure, Thomas Aquinas, Dons Scotus, William of Occam and Augustine, among others. He discusses, for example, the role played by Augustine who in his Confessions (an extended prayer) focuses on “the inwardness of the individual … a sphere of dialogue, of conversation with God” (p104). By Augustine privileging prayer and grace, thus “Inventing the Individual – in the sense of acknowledging the equality of humans in the face of their maker…” (p105), Siedentop argues, he laid the foundation for “ … the demolition of ancient rationalism. The patriarchal family, the aristocratic society underlying the polis, the cosmos as a hierarchy of ends and purposes: all these became suspect and vulnerable without its support” (p104).

The European renaissance and reformation created the context for a further development and understanding of these ideas. Christian belief in the special place of prayer and grace, in the equality of souls and in moral equality before God are then seen to be the mother of Western Liberalism, together with its radical notions of human liberty, equality and fraternity.

The new secularism, and the future of these ideas cut off and without reference to their original Christian cradle and context, poses a present and real danger. The runaway contemporary naked individualism, the glaring inequalities and lack of respect one for the other, the diminishing freedoms everywhere – these are perhaps a sign of this danger. So, too, is the unconscionable greed, excessive love of money and power, at the expense of loving and empowering human relations. Siedentop very powerfully reminds us of this. To his fellow Westerners he concludes “If we in the West do not understand the moral depth of our own tradition, how can we hope to shape the conversation of mankind?” (p363).

Review of Larry Siedentop, Inventing the Individual – The Origins of Western Liberalism (Penguin, 2015).
Dr Aloo Mojola Visiting Professor in Translation Studies, Philosophy and Biblical Studies at St Paul’s  University, Limuru, Kenya.

RTN is neutral politically, and is not a religious organisation. On this website we publish articles and opinion pieces that align with our values (link to values statement on the website) but the author’s views are his own.