Stewardship

There was an interesting phrase buried on page 70 of the UK House Of Commons Select Committee on Culture, Media and Sport issue this week about phone hacking and News International. The controversial line which did not get cross party support for the statement that Rupert Murdoch was not a fit person to be a steward for an international company. The interesting word in this damning indictment is the word ‘steward’.

The committee might easily have said ‘director’, but they chose to use steward. The choice is very revealing as it shows a change in attitude towards the roles, responsibilities and purpose of the main board of directors and senior management teams in general. The term points up a broadening of the traditional financial driver of shareholder value, to include a wider set of responsibilities which relate to other stakeholders, and, I would argue, the environment. There are many other elements that could be included, but this is relevant to green24.

We are all stewards of the natural resources around us, as well as the cultural, economic and capital we create, affect or hold in trust. Unlike the others, environmental resources have limits; once the damage is done, it is very difficult to repair or restore. So in this area, which is particularly fragile, we have to be careful – just as the Murdoch’s have found that good reputation is extremely fragile and requires careful husbandry.

So maybe this moment marks a shift towards a clearer statement of directors’ responsibilities.  It is landmark cases like this that change the architecture of corporate governance. It may not set legal precedents, but it does set a precedent in the court of public opinion.

Many will be familiar with the concept of triple bottom line, but this is rather nebulous for companies to grasp in practice. If we can establish that senior management are more like stewards of our society and cultural capital than robber barons, then we will have moved on in a way that most will understand. Companies have responsibilities outside their bubble; they cannot operate in isolation regardless. Certain things are acceptable and others are most definite not.

To be a corporate statesman needs higher levels of competence and integrity; and this integrity needs to extend to the environment in in which we all live as much as anything else.

D Jackman