In the last five years or more, enlightened businesses and governments the world over have recognised the importance of telling the true and full story of an enterprise. This reflects in the enrolment of companies into the integrated reporting process embracing all its significant dimensions of integrated ‘thinking’, ‘performance’ and ‘reporting’. In India, several large businesses have enrolled into integrated reporting and the Securities Exchange Board of India has provided for the adoption of the <IR> Framework effective April 2018 – all indicating the way regulation and practice will go in the future.
Then, why is Mervyn King’s Book – The Chief Value Officer so significant today? [An Indian edition of this book is under way, with an awesome Foreword by Mr Koushik Chatterjee, Executive Director, Member of the Board & Chief Financial Officer, Tata Steel]. This Book addresses some immediate challenges before us:
The CFO will become the CVO. For decades most challenges and changes related to management and technology have been pulled and held together under a principle of custodianship to hold the trust and faith of investors and other stakeholder communities. Since then, different systems have evolved within organisations to make business more sustainable, which have now to align towards a unified picture to enhance credibility. The enterprise has the challenge to understand the multiple-capital scenario. There is immense learning required to dovetail the existing flows of thought, work and experience in the channels of these capitals, showing how they ultimately generate value.
Shifting the focal point to the CVO could change many things. Some routine work will include new dimensions of multiple-capital. Some may have to be reinvented for present times. Ethics for instance, was evolved with custodianship of mainly money and assets, when finance was the only capital. With the recognition of more capitals, new principles and sensitivities such as conservation of scarce resources, development work addressing sustainable goals and many others have immensely influenced corporate management. So how will that reinvent new mechanisms to cover the wider spectrum of issues?
Another instance is where human resource is a term often used for managing employees and people, signifying essentially that they develop as resources. If there would be a shift of the domain what would be the new understanding in which human-resource is the means to strengthen human-capital, but ultimately has to generate human-value? This would involve some process-work to help employees find a new sense of ‘meaning’ developing into a ‘higher purpose’ for them. And, this is how everyone in the enterprise and across supply-chains would have to remodel their roles as value-creators using their skills, knowledge and other resources as means.
A well-known social-reformer Adam Kahane recently wrote a book titled “Collaborating with the Enemy”! This book is about conflict-resolution in real and uncontrolled situations where tribes or communities have for generations stayed in conflict, and have to now reconcile to make peace. Adam often uses an expression “…it is simple, but not easy”! This insight applies so much to the most challenging part of any change. In the present situation of working together in an integrated manner one does not have really to do so much more than before. Relatively it is ‘simple’ in that sense. But a tectonic shift in the domain where everyone becomes a value-creator and would have to stretch in terms of creating value might make this challenge ‘not so easy’ or ‘difficult, and even ‘impossible’!