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From Compliance to Responsibility

The role of the company within the Australian economic landscape is well established, but as we find ourselves surrounded by what some interpret as ominously apocalyptic operating environments – floods, fires and plagues – the role of organisational responsibility is taking centre stage. But the question being asked is now broader than simply: what do we need to do to meet our social requirements? We are now beginning to ask: what should we do, given the power and influence that we have?

The real question: How might we become organisations of positive social change?

Companies are seen to hold more than a duty to simply comply with the law, and face increasing public pressure to uphold virtues in keeping with an expanding social morality. The merits of this can be debated relentlessly, but as this debate ensues it’s important for directors and executives to give serious attention to the ways in which they can steer their organisations beyond cultures of legal compliance toward cultures of responsibility and care. 

At AVENIR we believe in fostering leadership that keeps a keen eye on the future, and is capable of imagining and cultivating a world of flourishing for all. And so when it comes to directors, our goal is to open conversations about the future that focus on how organisation can contribute to meaningful change in the world. 

When it comes to issues like climate change, the automation of the workforce, rising dependence on AI, and epidemics of anxiety and depression, it is corporations – the backbone of Australian working life – who have the capacity to create environments that support health, wellbeing, and stability. 

But why should we – we’re here to make money, that’s our contribution?

It’s a valid question. In Australia the role of shareholder primacy has a long history, but failing to observe the shifting tides of cultural thought has often proven financially detrimental. If you turn on your newsfeed you will find plenty of examples of corporations being dragged through the coals for actions that are deemed to fall short of our collective social responsibility. These may not be failures of legal compliance, but there are understood to be failures of social and moral responsibility. 

When your operations begin to impact lives, families, and cultures (and most companies have at least a minor impact on one or more of these spheres) then there is a level of assumed responsibility that extends beyond merely doing the bare minimum. 

Organisations, by virtue of their existence, are part of an economic ecosystem that impacts so much of our shared national life. This simple fact alone is an argument in favour of directors – the mind of the company – beginning to explore how they can increasingly consider a broad range of stakeholders in their deliberations, without compromising long-term shareholder value. 

Stakeholders such as the environment, the direct and indirect community surrounding the company, the culture within which the organisation exists, and even the future generations that the company’s operations might impact, are all increasingly important considerations.

In 2016, Noel Huntley delivered the now oft-quoted opinion piece where he claimed that it would only be a matter of time before a director was sued for a failure to perceive climate-related risk. With subsequent judicial decisions indicating that a broadening duty of care is owed by both organisations and governments to stakeholders such as the environment, and even children, it seems likely stewardship of the future should now become a regular feature of governance deliberation. 

Jon Bergmann