stakeholder centricity- the heart of your business: wendy van tol & olivier sueur

Stakeholder centricity:the heart of your business

Explained by financial sector case studies

Barrett Values Centre

2014 International ConferenceBuilding a Values-Driven SocietyStockholm, 12 June

www.pwc.nl

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Ambition

• High performingorganization

• Purpose driven, valuesled

• Behaviour as thedifferentiator in the‘moments that matter’

We see two drivers for stakeholder centricity

External burningplatform

• Trust is all time low

• Shifting public moral

• Complying to the rulesis no longer enough

Stakeholder centricity: the heart of your business2

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Edelman Trust Barometer 2014

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Financial services continues to be the least trusted industry globally

• Financial institutions have been working hard on restoring trust, the impactof these efforts is not significant

• Globally trust in financial services industry is only one percentage pointhigher in 2014 vs 2013 (Edelman Trust Barometer, 2014)

• Trust in EU Financial Services is lowest

This calls for change in how financial institutions are restoring trustand building confidence.

Trust is a must in the financial services industry


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What builds trust?


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Research shows four key elements

• Be clear on what you stand for and why you are relevant

• Show you understand the needs, interests and expectations of others

• Integrating stakeholder needs and their (long-term) goals into services,products, processes and behaviours

• Reporting open and transparent about financial and non-financial valuecreation towards a broad stakeholder group

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PwC’s stakeholder centricity approach

5

Relay to stakeholders what path youwalk through integrated reporting

Assess, evaluate and adjust tobring the walk closer to thetalk

Support the walk with theright processes

Walk the talk

Be clear on purpose & valuesand how you are relevant toyour stakeholders

ACCOUNTABILITY

CONTROL

EXECUTION

LEADERSHIP

STAKE-HOLDERS

PURPOSE& VALUES

June 2014Stakeholder centricity: the heart of your business

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Financial institutions steering on stakeholder centricity:

1. Define and have clarity on their purpose & key values

2. Define their direct & indirect stakeholders

3. Organize permanent dialogue with these stakeholders to know andunderstand their needs

4. Take careful consideration of the possible conflicting needs:

◦ Step 1: Formulate all financial andnon-financial needs and their impactshort/long term effect

◦ Step 2: Needs are weighted forkey stakeholders relevance andaccording to the purpose & keyvalues using a materiality analysis

Transformation towards an open system

6June 2014Stakeholder centricity: the heart of your business

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Moments that Matter are the moments that createvalue for stakeholders

Culture is build in Moments that Matter (MtM).

MtM:

• has unparalleled impact on the performance andthe value creation process

• exists in interaction with stakeholders

The right behaviour in MtMs:

• provides more control in restoring trust andbuilding confidence of stakeholders

• triggers a positive effect on a change in culture &behaviour

• can be embedded in the organization by steering onKBI’s (Key Behavioural Indicators)

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Quantifying and qualifying stakeholder interestsis key towards sustainable value creation

Fact based, definedby logic using data

analytics

What we know isthe right thing to do

Moments thatMatter

Defined by emotionand feelings

What we feel is theright thing to do

“The difference between emotion and reason is that emotionleads to action, whilst reason leads to conclusions”.


June 2014

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Example of an insurer: moments that matter

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Transformation towards a stakeholder orientedculture requires integration of three leadership styles


SOUL – inspirestakeholders based ona belief in the purpose,values and strategy ofthe organization.

SYSTEM – show theneeded changestowards a stakeholderoriented culture bysystems, processesand structures.

STAMINA –embeddingstakeholder centricityin the culture bysteering on it in dailydecision making andbusiness operations.

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Stakeholder Centricity: Putting it into practice

BRAIN bank N.V.

• BRAIN bank is a global financial institutionof Dutch origin, heavily impacted by thecrisis.

• The purpose of BRAIN bank is: meaningfulfinancial advice to prepare for the future.

• The key values of BRAIN bank are:responsibility, partnership andprofessionality.

• To become a more robust company BRAINdecided to focus on profitable and strongclients and for the less profitable (non-target) clients, like some middle marketclients, a discouragement policy is defined.

• Employees feel uncomfortable applying thepolicy, because they feel forced to breakcontact with clients they have been servingand have known for many years.

• Employees also complain about the almostimpossible load of new national andinternational banking regulations and theimpact of these regulations on their dailyjob.


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Discussion in subgroups

We have 6 subgroups representing thedifferent stakeholder groups of BRAINbank:

1. Clients: specifically entrepreneurswith medium sized companies

2. Employees

3. Management

4. Shareholders

5. Regulators

6. Society

Round 1: What are your 3 key needs?

• Brainstorm all possible needs of yourstakeholder group (5 min).

• Discuss output within subgroup (5 min)

• Please write the 3 key needs on post-itnotes and share them plenary.


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2. Employees

3. Management

4. Shareholders

5. Regulators

6. Society

Round 2: Prioritize the long list of keyneeds according to the purpose andvalues

• Vote on the items of the long list bydividing 2 green stickers and 3 red stickers.


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2. Employees

3. Management

4. Shareholders

5. Regulators

6. Society

Round 3: Define the MtM in respondingto the needs

• Brainstorm on the MtM’s for the needsprioritized in round 2

• Pick one MtM and define what behaviour isneeded


June 2014

PwC

PwC’s Sustainable Business Modeling toscientifically underpin stakeholder centricity

Eg. Effect of intervention on sick leave by increasing fruitconsumption

Reachable population

92% of Dutch population doesn‘t consume sufficient fruit

Maximum effect

2.4% of sick leave is caused by insufficient fruit consumption

Chance to succeed

Intervention will reach 80% of population which doesn‘t consumesufficient fruit

Impact

An investment in fruit reduces sick leave by 0.1%

Towards stakeholder centricity in the Financial sector20

May 2014

Contact

Wendy van TolPartner – Change & Leadership

[email protected]

Olivier SueurDirector – Risk & Compliance

[email protected]

See also www.pwc.nl/goodmarketconduct

stakeholder centricity- the heart of your business: wendy van tol & olivier sueur

Leadership & Management