Ioannis Ioannou, Associate Professor of Strategy and Entrepreneurship at London Business School, speaks at the 2017 Inaugural Business for Development Summit regarding the importance of responsibility in a corporation.
Mr. Ioannou says that nowadays the need for companies to further contribute to society has become greater, as “with great power, comes great responsibility”. For this reason, many companies have started thinking about these challenges in society and environment and trying to integrate them in the way they operate.
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Speaking about the financial aspect of the responsibility, Mr. Ioannou said that recent data have shown that responsibility and financial growth are linked. Namely, companies who are responsible, provide better results.
In order for a company to become a sustainable organization, there are four key elements:
- Corporate governance: Responsible companies have distinctive governance structures that takes into consideration the interests of all stakeholders.
- Stakeholder engagement: Responsible organizations have a more transparent and deeper engagement with their stakeholders.
- Time-horizon of decision making: Responsible organizations communicate effectively their long-term decision making horizons.
- Transparency and accountability: Responsible companies are most likely to measure their impact in terms of their non-financial aspects and most likely to select high standards regarding their selection of partnerships.
