It has been my great pleasure to lunch with the Worshipful Company of Chartered Accountants today and to have accepted the invitation from Peter Wyman your current Master with whom I have had many meetings over the last five years and for whom I have the highest regard. I have to say that despite the relative formality of a livery Company - my conversation today with Peter has been hugely more relaxed than is normally the case when I am receiving his very expert briefings on such topics as proportionate liability caps, joint audit proposals and non-financial reporting!
But it was during the course of the Companies Act and particularly the political shenanigans concerning the Operating and Financial Review, that I realised that a lot more thought was needed by all political parties in the area of CSR or CR or Responsible Business as it is variously described.
With my corporate finance background, I have long been an advisor on corporate governance issues: but I came to realise on that Bill, that there were more fundamental issues. Namely, that rather than just looking at the process of reporting requirements - how do we encourage positive change in the actual conduct of the company - which is to be reported on.
So, as a partner of a City law firm, as a shadow DTI minister and more recently as a member of the Conservative Working Group for Responsible Business I have taken it upon myself to spend some time considering corporate social responsibility issues.
Of course "CSR" is something of a buzz word these days and could be said to be relevant to so many different parts of running a business; from internal issues such as relationships with employees or external ones such as a company's environmental policy or how and from where they source the food for the office canteen, or their manufacturing materials or accessing external services. Increasingly companies are recognising that they do not exist in isolation, and that Responsible Business often working with companies in their own sector, is usually good for the business - Certainly if they take a slightly longer term perspective.
Employees also depend on the business and looking even more widely, customers, suppliers and the local community are all affected by how a business operates. Therefore one aspect of CSR which should not be ignored, is the opportunity that it offers a business to engage with the wider community and maximise its positive impact on society. Where I think that my Party differs from the Party in Government is the role of Government - because where Labour instinctively heads for regulation in CSR - we would see Government in an enabling role, seeing CSR as part of our wider responsibility campaign to encourage all parts of society individuals, professionals as well as companies to work together - rather than fall back on the state.
One of the most effective ways this can be done is for companies to contribute to community projects that focus on education which is why I think this is an excellent theme for the Livery Company this year. My own firm, SJ Berwin, has an educational project. A reading partnership programme with a local primary school has been established since 2002. All employees at SJ Berwin are encouraged take part in the scheme with the Riverside School in Southwark. The team currently comprises of 60 volunteers from all parts of the firm (fee earning and non fee earning) and involves attending sessions for 30 minutes for one to one reading practice with a selected child. All volunteers are fully supported in their decision to contribute to the scheme. They are required to make a firm commitment to their volunteering and are to treat appointments as if they were client appointments. As well as visits by staff to the school, the primary school children visit our offices at the end of each term. We provide afternoon tea for them and the trips are enjoyed tremendously by the school children. During a recent review meeting, the programme leader reiterated how the support that SJ Berwin is providing has impacted not only on the children's reading skills, but also their 'softer' skills: their confidence, self-esteem and communication skills. The visits to the firm's premises are a huge eye-opener for these children who would normally otherwise have no contact with the City, an area only next door to their own homes, but another world to them all the same.
Schemes like this are extremely valuable for the communities they help. MORI research has shown that over half of community organisations and schools say that business support is crucial. They are also valuable for the volunteers who are involved and there are significant advantages for businesses themselves. Employees who are part of a company's community scheme are significantly more likely to feel pride in their workplace, and this is shown to have an impact on motivation, skills development and the retention of employees. In addition, work within the community helps businesses establish good reputations both locally and as an employer and more widely as a responsible business.
Companies are starting to understand that they have a part to play in nurturing the development of our country's children and their education. After all, children are tomorrow's employees, business partners and consumers and in an increasing competitive global economy it is important that Britain continues to support home grown talent. In order to ensure that we make the most of this talent, children and young people from all walks of life need to be given the opportunity to realise their potential. It is here that companies and business organisations can help, be it by donating to existing schemes or by gifts-in-kind to support the communities in which they conduct their business, or better still, by direct involvement and showing children what they can aspire to by their own efforts.
The interim report recently published by the Conservative Responsible Business Working Group of which I am a member is seeking to encourage debate on the best ways of encouraging responsible business. It is accepted that companies have huge potential to affect the well-being of those around them. However, the Conservatives are questioning whether over-complicated Government top-down dictates are the best way of achieving this. Instead policy makers should seek to harness companies' skills, creativity and innovation in seeking sustainable solutions. So whilst Government should retain the role of co-ordinator and final arbiter - the report suggests that promoting responsible business and having business significantly buy-in to CSR best practice, will most productively come from business itself. One of the risks of relying on regulation to achieve change is that compliance becomes a boiler plate disclosure exercise and there is a race down to the lowest common denominator of minimum disclosure and box ticking. So, rather than enforce one-size fits all regulations, we are looking to find ways to encourage companies to develop their own responses to social and environmental challenges.
I do think that advisers, not least accountants, will have an important role to play in advising on best practice in CR - just as you are increasingly doing now in the field of corporate governance. Not least looking at client companies and advising for instance that a holistic approach to CR will be more effective than a non integrated "bolt-on" exercise. So I think your Livery Company's choice of education links this year is a timely one and I do wish it all success.