John Varley, Group CEO of Barclays, explains why business ethic are so important to branding and maintaining good relationships with stakeholders – customers, employees, regulators and investors. Barclays sets out how these considerations have made an inherent contribution towards to their ongoing strong financial performance.
Imagine that you’re a big organisation, making good returns on capital. You can make choices that are irresponsible … but lucrative. But bit-by-bit, as the values that bind your organisation together are compromised through irresponsible choices, and the trust of your customers is diluted, your brand will suffer. And let’s be sure about this: brands are far more important to stock market value and sustained growth, than short term profits.
Beyond financial results
- In February of 2005, Barclays reported a record financial performance.
- A few weeks ago I was able to report another record performance – in the area of corporate responsibility.
- Many of you will have seen the recent results of the Business in the Community “Companies that count” index in the Sunday Times. This year we’re 3rd – our highest ever ranking.
Our top three ranking reveals something important: a strong performance as a responsible corporate citizen does not conflict with strong financial performance.
We can’t (and shouldn’t) separate our corporate responsibility activity from our daily business. Nor can we separate corporate responsibility from our brand. That’s because the people we seek to reach with our brand expect us to be responsible.
Our stakeholders – customers, employees, regulators and investors are becoming more sensitive to our changing world. They are intensely interested in ethical, environmental and social issues, and business conduct. For customers making buying decisions, corporate responsibility is a point of difference. For talented people looking to move organisations, corporate responsibility is a point of difference.
Really making a difference
Another example of where we have taken an important lead is our involvement as a founder member of the Equator Principles. The Equator Principles form a framework for a thorough independent environmental – and social – assessment of the impact of project financing, for major infrastructural programmes, such as dams and pipelines and mining.
We’re a leading provider of financing of this sort. So it’s an important area of business for us. But we have made a choice about how we are going to participate in this business. And by doing so, we are influencing other participants. More and more governments and construction companies are making the same kind of choice.
They realise that financing will be easier to obtain if the project complies with the Equator Principles.
Extracts from the text of John Varley’s speech on 31st May at the Fifth Ethical Corporation Summit in London