According to him, the critical topic that will dominate the corporate governance for the future is Environmental Social and Governance (ESG) norms. He said investors are now increasingly valuing corporations on ESG criteria and government bodies are focussing on ESG reporting by companies.
Hindustan Unilever (HUL) chairman and managing director Sanjiv Mehta on Friday said in today’s fast-changing world, the role of chief financial officers (CFOs) has moved much beyond finance as they have to deal with ambiguity and uncertainty while steering the company ahead.
Delivering his Leadership Talk at the FE CFO Awards, Mehta said the world has moved from what the American army had coined during the Cold War to define the times – VUCA (volatile, uncertain, complex and ambiguous) – to BANI (brittle, anxious, non-linear and incomprehensible), a later coinage by an American anthropologist, and this is the world with which businesses have to deal today.
“This is the world where systems break without warning and businesses have to be prepared for this BANI world,” Mehta said.
Stating that businesses need to look at purpose as well as profitability, which was the original aim of capitalism, Mehta said that Milton Friedman’s definition of business: “Business of business is business” is long dead, and today businesses have to be governed by values and principles.
In this context and talking about Unilever, Mehta laid down what he calls the ‘4G of growth’, which according to him are being consistent, competitive, profitable and responsible. “To succeed, we require the highest standard of behaviour towards everyone we work with. This is our road to what we call our 4G of growth,” he said.
“Our actions are governed by values and principles which are reinforced at all levels. We are committed to the harder right than the easier wrongs. Doing things the right way, which means taking our business decisions, acting in ways which are ethical and in compliance with applicable legislation both in letter and spirit,” Mehta said.
He said that businesses should create long-term value for shareholders, business partners and people. “Simply put, corporate governance is the framework that outlines companies’ interactions with stakeholders and their approach towards both institutional and social matters,” Mehta said.
According to him, the critical topic that will dominate the corporate governance for the future is Environmental Social and Governance (ESG) norms. He said investors are now increasingly valuing corporations on ESG criteria and government bodies are focussing on ESG reporting by companies.
“It is indeed the responsibility of the companies to find new ways to sustain performance and grow in a volatile environment while protecting the business model and embedding ESG at its strategy. At Unilever, we embedded ESG into our business through a strategy. The fully integrated strategy lays the pathway for us to realise the vision of being the leader in the sustainable business model and deliver the highest possible value not just as a business but to all our stakeholders,” Mehta said.
According to Mehta, the BANI world will be governed by ESG.
https://www.financialexpress.com/industry/businesses-need-to-deal-with-bani-world-hul-chief-sanjiv-mehta/2472232/
