The 21st Century Company: How It Creates Values – And for Whom
Posted on December 21, 2017 by Louis Coppola
Highlights from the strategic “21st Century Company” conference presented annually by Skytop Strategies in November 2017 at the Time Warner Center in New York City.
By Elizabeth Peterson and Cher Xue, Sustainability Reporting Analysts, G&A Institute
In November, executives in governance, risk, innovation, corporate responsibility, and information technology, and representatives of other functions & disciplines gathered to discuss future trends and share thoughts on the theme of “how to prepare for the risks and opportunities that companies will face in the 21st Century”.
Two prevalent topics of discussion among the executives present were (1) data security and (2) approaching CSR as an opportunity for ROI rather than as an expense.
Hank Boerner, Chairman & CEO at G&A, started the morning off with opening remarks to set the stage for the day’s discussion. He suggested that regardless of the top-notch strategic planning, the 21st Century Company is likely to put forward, “disruptions” will always arise.
Using retro props and the evolution of the cell-phone from the early “brick” phone and the revolutionary concept of making a call from anywhere to today’s smartphone (now holding a great deal of our personal information), Hank reminded the audience of the disruptions from the past few decades.
Integration, Innovation, and Progress are what the thriving 21st Century Company will practice to be successful and to thrive, he said. (See his comments here: https://ga-institute.com/Sustainability-Update//2017/12/21/you-and-the-21st-century-company-all-about-iteration-innovation-and-disruption/)
The event was held during the first anniversary of the 2016 U.S. Presidential election, which sparked rigorous conversations about what sustainability will look like for the United States over the next three years.
The past year has involved the start of dismantling of some of the country’s most monumental environmental plans and agreements. While this has led to a dim outlook for sustainable’s future for some, others noted that the corporate world is remaining firm in their sustainability strategic plans and targets, due to stakeholders and investors’ increasingly persistent calls for climate change disclosures, even for the non-renewables industry.
This reassurance has allowed many corporate sustainability advocates “to rest easy”. However, as Bennett Freeman, Senior Advisor, Business for Social Responsibility (BSR), mentioned during his panel, governance without government doesn’t work. Corporate social responsibility without government responsibility is insufficient — and sustainable development should not be left to solely corporations.
Another trend creeping into CSR/ESG performance indicators is data security, presenting both opportunities and risks for companies.
Louis Coppola, Co-Founder and Executive VP at G&A, moderated the panel “The Internet of Things: One Example of How Technology Shapes—and Threatens—Value Delivery” with panelists Gene Fredriksen, Chief Information Security Officer, PSCU & Appointee, Global Forum to Advance Cyber Resilience and Jonathan Hill, Dean of the Seidenberg School of Computer Science and Information Systems at Pace University.
Key takeaway: Data is being hailed as the “oil of the 21st century”. The amount of data being collected during your day-to-day activities can be a little unsettling for some.
The information obtained by third parties can support significant business decisions and product/service development. Data can hold unmeasurable value for a company’s future to make informed decisions.
However, the question for debate is how responsible do we expect companies to be with our data?
A spike in recent data breaches has left consumers feeling a little less secure, but it’s also left corporations feelingn uneasy about their brand reputation and the future of their data security plans.
In 2017 alone, we have learned of significant data breaches at Yahoo, Equifax, Uber, Gmail, and many more companies.
Currently, the Global Reporting Initiative (GRI) provides a voluntary reporting indicator (G4-PR8) asking companies to disclose the number of breaches of customer privacy had occurred during that reporting year.
However, with the risk of significant cybersecurity breaches increasing, it’ll become more prevalent for the 21st Century Company to become much more proactive in protecting customer privacy; and, simultaneously, provide more detailed disclosure on a company’s data security efforts – this will be expected by shareholders.
For more information on whether you’ve been affected by the recent Equifax breach, click here.
As consumers, we expect the companies we interact with to take our personal information and data security seriously. However, we cannot place all the responsibility on businesses. With holiday shopping well underway there are plenty of individual tactics to put in place to make sure data is safe while online shopping.. (Link for bullet point source). These include:
- Before surfing the Internet, secure your personal computers by updating your security software. Everyone’s computer should have anti-virus, anti-spyware and anti-spam software, as well as a good firewall installed.
- Keep your personal information private and your password secure. Do not respond to requests to “verify” your password or credit card information unless you initiated the contact. Legitimate businesses will not contact you in this manner.
- Choose a password by combining different numbers, letters, and symbols. The longer the password, the better.
- Beware of “bargains” from companies with whom you are unfamiliar — if it sounds too good to be true, it probably is!
- Use secure websites for purchases. Look for the icon of a locked padlock at the bottom of the screen or “https” in the URL address.
- Shop with companies you know and trust. Check for background information if you plan to buy from a new or unfamiliar company.
- Act immediately if you suspect identity theft. Contact your credit card company, your bank, all three credit reporting agencies.
About Corporate Responsibility in the 21st Century
One very interesting presentation was entitled: The Arrow Electronics Story: How Innovation Can Drive Profits While Addressing Social Challenges. The presenter was Joe Verrengia, Global Director of Corporate Social Responsibility at Arrow Electronics, Inc.
Arrow Electronics is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. And humanitarian technology projects serve as a metaphor for what Arrow does every day in business.
The presentation addressed some bias that has been expressed — such as there is no real ROI on CSR.
As examples, some critics have said these things: Personal values don’t always translate to work values. People within the organization have no idea what it is and where to start to work. The CSR budget is the first one to cut because, for some business, CSR is not an investment, but an expense.
Joe Verrengia addressed these negative projections and explained how Arrow Electronics sees ROI on CSR – starting with the Company’s brand itself — and to think about who we are as a foundation.
His company’s lessons were a valuable sharing for the conference participants:
- Besides have ROI clearly demonstrated by direct numbers of additional revenue, for Arrow, ROI is generated through employee recruitment and retention, in that CSR can lead to greater employee pride.
- Today, for example, 80% of millennial choose work for a purpose-driven company. And 99% of Arrow’s interns decide to come back to work. ROI also comes from customers’ loyalty — 223 of Arrow’s customers now expect Arrow to be a good corporate citizen and demand annual proof of CSR through questionnaires.
- Because of Arrow’s work on humanitarian technology solutions, the firm also has attracted new customers who have seen the Company’s work on these projects and recognized that Arrow not only has the solutions expertise they need, but also shares the same values as well.
- Then there is ROI from “Brand”, which is reputational ROI. Arrow’s CSR technology projects have generated nearly two billion media impressions and more than 600 news stories in just a few years. The earned media value and the calculated brand value of these projects far exceeded what they cost.
- Arrow’s CSR program has a focus on guiding innovation that improves lives and provides opportunity. The CSR program is demonstrated through humanitarian projects, community investment, employee engagement and corporate reporting.
For the purpose of measuring CSR program and score progress, Arrow has developed an engagement rating system by which the Company evaluates CSR partners and projects. The 10 categories of engagement include Innovation; CSR category alignment; Brand elevation; Social impact; Business development potential; Executive support; Arrow locations; Stature; Arrow V alignment; and, Employee Engagement.
Arrow believes “Five Years Out” is the tangible future, and the Company’s innovations can make the world a better place for us all – now and five years out, which is exactly a 21st Century Corporation approach.
Note: this commentary featured just two of the event’s panels. An agenda for the day can be found here. Follow Skytop Strategies meetings calendar for the 2018 conference with the 21st Company thematic: https://skytopstrategies.com/