Experts Gloomy on Government’s Shared Value Role

High-profile panellists were divided – and mostly pessimistic – on the role Government could play in driving responsible business in Australia at the recent Shared Value Forum in Melbourne.

Moderated by ABC News Breakfast presenter Virginia Trioli, the panel included Dame Julia Cleverdon of the Prince’s Charities in the UK, US scholar and Shared Value pioneer Mark Kramer of consultancy FSG, Mike Hirst of Bendigo Bank, and Paul Ronalds of Save the Children Australia.

Global thought leader and US scholar Mark Kramer was an exception to the rule with his call for significant Government involvement, suggesting the Australian Government could provide tax breaks to corporations using Shared Value principles and addressing social need through their products and services.

“I think that there is tremendous opportunity for Government to play a role in several ways,” Kramer said. “First to the extent that business can come in and address problems, meet social needs that would otherwise cost the Government money, there’s a strong case to be made for subsidies or tax offerings to encourage businesses to move in this direction,” Kramer said.

“The Government itself is a huge purchaser of services and by building a Shared Value component into their requirements, they can encourage companies to move into this direction.

“It’s all about measurement. Business is very used to measuring financial results, and not at all used to measuring the social impacts of what they do. But by beginning to require measurement about social outcomes and social impacts, you begin to change the practice of business.”

In using Creating Shared Value (CSV) theory, companies aim to create measurable business value by identifying and addressing social problems that intersect with their business, on the premise that the competitiveness of a company and the health of the communities around it are mutually dependent.

The UK’s Dame Julia Cleverdon expressed hesitation around Government involvement, arguing legislation should be secondary to business using its own initiative.

“I’m rather keen on keeping Governments’ hands off all this stuff to be honest…My line is that Government’s should not legislate until leaders are already doing things…and legislate for the laggards,” she said.

“I believe that business needs to do this because its great for business, rather than that Governments are requiring it.

“[As a corporate] lying on your deathbed, looking back on your life, will you be proud about having taken over China, killed Y, done Z?…That’s not what life's about. It’s about how do you add value with your immense corporate skill. I think the motivation of business leaders is about what can they do to make a difference.”

Earlier in the day, speakers at a panel on the state of Shared Value in Australia were similarly  critical.

Bruce Harvey of Resolution88, a social license firm working in the extractives industry, said Government could not be relied upon.

“I hate hearing this refrain of Government should do this and Government should do that. Anyone sitting around waiting for any Government of any persuasion to actually fix a problem, you’ve got to be kidding!” he said.  

“This concept of Shared Value is about societal value and societies doing things, which is different from Government. I come across most executives who equate society with Government – they don’t think of the two as being separate, they think all answers come through the channel of Government.”

Leeora Black, founder and Managing Director at the Australian Centre for Corporate Social Responsibility, assessed the situation based on the research she has conducted on the issue.

“Unfortunately the state of politics in Australia doesn't give us much encouragement in this area. Last year I was invited to speak at an APEC conference in Santiago to talk about the Australian Government’s approach to CSR. When I got the invitation, I thought it was a joke!” she said.

“What I found is that there is very little coordinated or joined up thinking of activity from any shade of Government…no whole of Government approach, no sensible thinking, no example of anything like we’ve seen with Governments in the UK or Canada which approach the issue in a more coordinated way.

“I think those of us interested in Shared Value need to just get on with our business and forget about the Government.”

Despite the hesitation around Government as a driver of responsible business, panellists in both sessions were united in their insistence on cross-sectoral collaboration, with many seeing Government as an essential participant in that process.   

“Getting collaborative action between businesses, together, in communities…that’s real challenge I think for us in the UK,” Dame Cleverdon said.

She said there was a need to “develop cross-dressers, across sectors…The future is going to be so tough, it will not be solved by the one sector alone.  

“We absolutely need more of those people,” Kramer agreed. “These sectors speak different languages, each thinks that the other is the problem, and it is absolutely true that we are not going to find solutions to social problems, which are impacted by all the three sectors, unless they work together.”

Paul Ronalds, from Not for Profit Save the Children, said coming together was paramount for Shared Value projects to be implemented successfully.

“I don't think any of us should underestimate how hard it is to get a proper Shared Value project up and running,” he said.

“There are few people who really understand each others businesses, so I think as a society, we have far too few people who really have got enough experience across the Not for Profit sector, the for-profit sector, and Government. And we don’t actually properly understand the constraints that each of them have and the opportunities that exist there.

“That for a start limits imagination…but also it does take time and we’re in a world where we’re all under tremendous pressure.”

The one-day forum, hosted by Australian Not for Profit, The Shared Value Project in partnership with NAB, brought together representatives of business, academia, civil society and other sectors to share case studies and explore opportunities to advance the movement in Australia.