By Sunny Verghese, CEO and Group Managing Director of Olam International
There’s a temptation for companies entering milestone years, as we just have with our 25th anniversary, to lionise past achievements and eulogise key milestones. We’ll certainly and justifiably be doing some of that. But to only do that would be to miss the point.
My focus – our focus – should be on what those 25 years and our incredible journey have taught us, and what it tells us about the things we are yet to achieve.
To paraphrase Mark Twain, there are two important moments in life, the day you are born and the day when you realise why you were born. Now, 25 years on from our first “milestone moment”, our purpose and the challenges ahead are clearer than ever.
There is a somewhat obvious play on words in Olam’s corporate purpose of “Growing Responsibly”. It fits very neatly in describing the corporate responsibility and sustainability philosophy of our company in the agri-commodities business.
It covers the fact that our business depends not just on how and what our suppliers and we grow but is shaped by the needs and interests of multiple stakeholders. It also fits squarely with our imperative to deliver profitable and enduring growth for our shareholders.
So as a philosophy it works very well indeed. Except that, if that were all it was then it would be counter-productive – because stakeholders today are very quick to recognise the difference between a slogan and a promise.
“Growing Responsibly” only works if it is embedded in every aspect of Olam’s business.
As a term it’s something we only recently started using but, as a philosophy, it’s been part of our DNA ever since I can remember.
Some 25 years ago, when I had the privilege of starting the company, I had the fascinating experience of travelling all over Africa, in some cases to very remote areas. It’s an experience that has been repeated by almost all of our senior executive team. Even then we were determined to stay committed to our stakeholders — though, admittedly, I can’t recall ever using the term “stakeholders” in those days.
Today, “Growing Responsibly” is about two quite distinct — but inter-dependent – responsibilities of the company.
To be a “sustainable business”, we must attract and retain top talent; we must innovate (and “disrupt”); we must execute well; we must build capabilities and capacity; we must ensure governance standards that meet the expectations of all our stakeholders; we must be transparent, and we must manage risk and reputation.
To meet the “sustainability” expectations of our stakeholders and communities we must manage our environmental responsibilities; respect the health and safety of our people and help improve the livelihoods of communities that we operate in. Environmental and social criteria must go hand in hand with our commercial decision-making.
Working on all of these things in equal measure ensures we are successful and that, I believe, is beneficial to all of our stakeholders.
Recently, I was looking through an OECD brochure on responsible business conduct for multinational enterprises (MNEs). It talked about the challenges and obligations for companies working across many cultural, legal and regulatory environments. Precisely what Olam has to do every day.
The OECD highlighted a list of the tangible business advantages for MNEs committed to responsible business conduct. There were no surprises there either: operational efficiency gains, social license to operate, first-mover advantage, access to new markets, added value for consumers, business continuity and resilience; the list went on.
We’ve been able to do justice to key criteria for responsible business conduct, as I believe we take a grounded approach to our business. I know from personal experience beginning a quarter of a century ago, how much can be learned ”in the field”. But we must always strive to do better.
Today, our “Rite of Passage” programme sends our management team to some of the most physically, socially and demographically challenging geographies within our business footprint. It gives them perspective, teaches them respect for each role within our organisation and within a community, and creates an appreciation of what growing responsibly really means.
It may seem odd to say, but for me one critical litmus test is the decisions we make about what-not-to-do – decisions taken now so that values and value creation are not compromised in the longer-term.
When we decide not to do something because it either doesn’t meet our operational principles or doesn’t serve the interests of an external stakeholder — sometimes even those of a single farming community — we demonstrate that the concept of “Growing Responsibly” is a tangible one. And one, of which, we can be proud.
I believe, however, that rather than looking at where we are with satisfaction, we must be restless about the future. Because of the scale, diversity and rich experience of our business, in our next 25 years we have an additional role to play – that of activist.
It might surprise some to hear that. Many companies shy away from embracing and taking on issues that are bigger than themselves and involve stakeholders far wider than their own sphere of influence.
But our business is undeniably linked into some of the most critical issues facing the world in the next 25 years, and beyond.
I see six developmental challenges we must all face up to in this century – and challenges that all stakeholders, including Olam, must be part of addressing: these 6 challenges are: food security; water security; climate change; energy security and building a new paradigm of sustainable and profitable growth without massively depleting “natural capital”. The sixth and final challenge is a corollary of how we deal with each of these other issues – how we reduce inequality in terms of finding inclusive growth.
Very often,these challenges are looked at by policymakers, governments, think-tanks and companies in siloes. I believe each of these issues has interlocked causes – and we must start integrating how they are dealt with because they are so closely linked together.
So in our 25th year, we add a new dimension to our Growing Responsibly commitment: to be a voice in prompting awareness of these fundamental challenges. To help to create a debate around the way forward. And in our own small way, to work towards how Olam can be part of the solutions that need to be found.
The issues and opportunities around the use of natural capital will be an important topic that we will be saying and doing more on throughout our 25th anniversary year.
This blog was previously published on Olam and is reproduced with permission.