The EFMD business magazine

The EFMD business magazine

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Mark Moody-Stuart examines the difficulties of ensuring that the right values are agreed upon, understood and truly embedded in a large multicultural business organisation.

I once attended a large dinner and discussion at the World Economic Forum in Davos, Switzerland, on standards for not-for-profit organisations. The debate was mainly between the leaders of such organisations asking themselves how they could ensure a common commitment to standards so that a failure in one sphere by one organisation did not tarnish the reputation of the sector as a whole. One leader of a large not-for-profit said that he was concerned how he could ensure that every one of his 60,000 employees in many different countries were all living up to the values of the organisation. It is a very valid concern and with some satisfaction I was able to welcome him to the ranks of multinational business and its many challenges.

The test of embedding values in large global organisations comes in several parts: first, establishing and agreeing common values; then making sure that everyone has really taken them on board; and lastly continuously checking that they are alive and well throughout the organisation.

A crisis is often a stimulus for creating or reviewing values. Shell had a well-established and well-embedded “Statement of General Business Principles” developed in the 1970s in response to a corruption scandal in Italy. In my experience, in the 1990s, if you asked anyone in Shell what the group’s business principles were they would say: “We don’t bribe people and we do not get involved in politics”.They could say “we” with some confidence because there had been regular discussions on the challenges of working in corrupt environments and people knew of examples of business lost due to a refusal to pay bribes. The policy of not making political payments was also well known.

However, in 1995 two events involving respectively the environment and human rights caused public outrage and shook confidence and self-esteem throughout the organisation. These events were the reaction triggered by Greenpeace against plans to dispose of a very large oil storage buoy in the deep waters of the Atlantic and the execution in Nigeria of Ken Saro Wiwa, an outspoken critic of Shell’s activities.In both cases we thought that we had taken all steps in line with our principles but many people were very critical of our actions – or inactions. While we had told “war stories” about corruption, we had previously never spoken explicitly about human rights.

In response to this public concern Shell undertook a global consultation process. Workshops brought people at all levels in the company together with representatives of civil society organisations, the media, academics and political thinkers. Out of this came three amendments to the existing principles … please click to read more.

Special Offer for EFMD members: get 20% off “Responsible Leaders” by ordering from Greenleaf Publishing using code EFMD20.

For the full article, you can view the PDF.

Embedding values

See more articles from Vol.08 Issue 03 – ’14.

Sir Mark Moody-Stuart is author of Responsible Leadership: Lessons from the Front Line of Sustainability and Ethics, Greenleaf Publishing, 2014, Chairman of Hermes Equity Ownership Services (since 2009) and served as non-executive chairman of Anglo American plc from 2001 to 2009.
He is a former director of HSBC Holdings and is Chairman, Foundation for the Global Compact, and was a member of the Board of Directors of the Global Reporting Initiative until December 2007. He is a member of the Board of Directors of Saudi Aramco and of Accenture . Sir Mark became a Managing Director of the Royal Dutch/Shell Group in 1991 and was Chairman from 1998-2001.

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