The best way to address new legislation surrounding corporate and social responsibility is to be honest about where your business is now and make a genuine commitment to improve.
That was the message from Cherie Blair, founder and chair of Omnia Strategy, an international law firm providing strategic counsel to governments, corporates and private clients, speaking at the Sustainable Investing in Emerging Markets conference hosted by FT and EMPEA in London yesterday.
Blair used the examples of the Modern Slavery Act and gender pay gap reporting legislation which are about to come into force in the UK.
“Nobody is really expecting – and I’ve done a lot of talking particularly with NGOs in this field – that everyone’s going to suddenly be able to come out and be whiter than white on this. But what people are looking for is a bit of honesty and a bit of credibility that you are trying to deal with this problem, even if some of these issues are deep-seated and historical and are going to have to be worked out,” she said.
“What is fatal, of course, is the idea that you can just fob people off. If people believe you’re willing to change and understand the issue, and want to do something about it, then they will cut you some slack.”
She added it is not expected that companies “emerge like some sort of white knight, all perfect and shiny”, but it is expected that they “have an intention to do things in the right way” and that their commitment is genuine.
“Your reputation is partly a reflection of the values that you project,” she said. “If you don’t actually really believe in the human rights approach to business, if you don’t really care about the environment, or if you think ‘we’re only signing up to this women’s thing because somebody says we have to’, then actually it will probably be transmitted in one way or another and there’s nothing worse than people mouthing things when they don’t really mean them.”
Blair said the greater commitment to change and understanding of what is required to effect change is driven by “the sheer transformation in technology and information”, which makes it more difficult to hush up wrongdoing.
“You’re only a mobile phone screenshot away from something very nasty that’s going to hit your bottom line,” she said.
Blair spoke at length about the challenges of taking on infrastructure projects in emerging markets, particularly on the need to negotiate contracts fairly when those on the other side of the table may be lacking in expertise.
“You might think, you’re sitting on that other side of the table, ‘this is great, I can put whatever I like in my contract, I can have what I want,’” she said.
“Well, fine, but if you’re there for the long-term, as these infrastructure contracts are, and you negotiate a deal where you have all the benefits and you’re not giving anything back [with] the other hand, then at some point along the line, it’s going to get difficult. If you’re really wanting to engage in a partnership with people and want them to trust you and want them to have a sustainable relationship with you, then you don’t try and screw them at the very beginning.”
Blair added that more firms should consider offering to fund “proper legal advice for people you’re negotiating with” to ensure the contacts are fair and balanced. This could also protect firms for costly potential international arbitration further down the road. Robust legal advice could also reduce bribery.
Blair said those embarking on infrastructure projects that are potentially “life-transforming” for communities should be proud of what they’re doing, but that pride comes from acting responsibly and ethically.
“We help the environment, we help bring jobs to local people, and we help because actually we have standards that mean when we [bid for] contracts, we don’t give bribes. And so we’re improving the quality of public life as well. What is there not to like about that? Why should we not be celebrating great British companies that go out and do that?” she said.