Society's expectations will continue to evolve and business will need to evolve with them

“I also think that it reflects perhaps a lack of recognition of the lag between community expectations and political action. We have had a lot of big things happening in society recently – when I look at what happened with same sex marriage…climate change, Indigenous recognition.

“Legislation really only comes when the community has overwhelming support for an issue.

“Inevitably the law lags behind community expectations and I think as the pace of change increases that lag has and will continue to widen and so in that position I think organisations are quite rightly identifying that gap and being prepared to step in, and be part of the debate and be part of helping with solutions.

“I do feel now and regularly hear – particularly in the last 12 months – directors and business leaders say that long-term shareholder interests are actually best served when companies act responsibly, when they care for others, when they recognise the complex ecosystem of stakeholders that exist.  

“Rather than thinking about the neat trade-off between delivering for shareholders and delivering for society, I think people have moved to recognising that there is shared benefit and I think that does give a great platform for shared progress.
 
Outside of shareholders, Ms Kitchen discussed five stakeholder groups she felt companies are stepping up and making changes for: customers, employees, suppliers, regulators and the overall role of business in the community.

Discussing company relationships with customers, Ms Kitchen highlighted the Hayne Royal Commission.

“Almost everything he aired applies broadly across society and I believe the conduct of all organisations right across the economy is often informed by the things that Hayne said and those findings,” she said.

“Obey the law; don’t mislead or deceive; be fair; provide services that are fit for purpose; deliver services with reasonable skill and care and when acting for another act in their best interests, it’s hardly rocket science, but I think that has been a suite of tools that I have seen boards have real conversations around to challenge their existing practice and reform.”

Ms Kitchen said these included taking proactive approaches such as bill due date reminders, removing customer pain points and shifting the responsibility from the customer to the organisation through the use of technology, restoring trust.

Discussing employees Ms Kitchen referenced CEDA’s Company Pulse research.

“According to CEDA’s report, the number one thing Australians think companies should be focusing on is providing staff with good work/life balance, and I also note that when the Australian public were presented with dozens of options to what a company’s priority should be, CEDA found that four of their top 10 issues related to improving conditions of employment, including in investing in staff wellbeing, training opportunities and improving wages,” she said.

“I think it shows there is still work to be done in meeting community expectations for employees – perhaps not surprising given we are spending more and more time at work, so it is vitally important to improve employee well-being, including positive work structures to help employees manage stress, mental health and work-life balance.

“In the Company Pulse report I note that suppliers were ranked highly in the propriety list with paying small business promptly ranked as 8^th.Perhaps not surprising when how embedded in the community small business owners are.

“But this is an area where I think there is some great tools and advancements.”

Ms Kitchen made reference to the Supplier Payment Code.

“This is a great example of business collectively recognising a problem and taking hard practical steps to address it which really does make a difference to the community,” she said.

“Of course responsibility for how we run organisations lies with companies but the trust crisis has also pushed regulators into the spotlight and recent royal commissions have been as critical of regulators as they have of companies and by and large their response has been to ‘toughen up’.
 
"It’s easier for all parties if we know where they stand."

However she said, “I do watch with concern when regulators push towards zero tolerance.

“For most businesses they are in the business of taking risks, and if we go too far as regulators we run the risk that businesses will stop taking risks, that they will be unable to access credit, and the growth which at the end of the day is vital to the things highlighted in CEDA’s report – employee confidence and security, and community satisfaction – will falter."

Speaking on the role of business in the broader community, Ms Kitchen highlighted the Company Pulse results where CEDA asked the community if they felt business leaders should speak out on social and environmental issues.

“The Company Pulse report found that 78 per cent of the general public want business leaders to speak out on issues of national performance but only 50 per cent of people think we’re genuine when we’re doing it,” she said.

“My observation is that the companies that are doing this well are the companies that do it when they back it up by meaningful action and commitment and that doing anything else can do more harm than good to the trust agenda and allegations of virtue signalling – or for those who like new words, I heard the term ‘woke washing’ – and those issues start to stick.

“The companies that are doing it well are the ones that have started at the top in those boardroom conversations – they recognise it is strategic and major, it’s not about grand gestures or big announcements, it’s actually about building up brick by brick.

“I don’t think this is a task that will ever be done, I think society’s expectations will continue to evolve and so companies will have to continue to evolve with them.

“The organisations that are focused on their culture are listening to all their stakeholders and are deeply authentic in the way they go about their business will be the ones who survive and thrive.”

Also speaking at the event was the Australia and New Zealand School of Government Dean and CEO Ken Smith and Allens Partner Rachel Nicolson while CEDA CEO Melinda Cilento set the scene for event discussing CEDA's Company Pulse survey results released in September.