02 January 2014

Stakeholder Centered Reports (Integrated/Sustainability reports) - A global phase shift

All current "for profit companies" are about to become to "for benefit companies", and all stakeholders expect their benefits to show up in a the new 'Integrated report'. That is a global phase shift. 

Companies can apply to become a certified 'for Benefit Corporation' (B-Corps) if they manage to reach certain standards. The requirement is to hold certain values/principles that benefits certain stakeholders. This in turn requires them to display a "Integrated report" (for all stakeholders) and not just a Financial report for the shareholders. 

The last couple of years more and more companies have produced Sustainability reports + Financial reports. These two are about to become one Integrated Report.

The integrated report becomes a greatly enhanced transparency report (for all stakeholder). Just look at how the 'Sustainability reports' competitions have pushed companies to unseen levels of transparency; showing good practices never been revealed before. And there is a fundamental difference in value between 'transparent co-operation' and 'hidden competition'.

Picture: RobecoSAM Sustainability Yearbook awards good reports; Gold, Silver, Bronze.

Why does it matter? Well, it does if employees start to look for companies that share their convictions; I want to be part of building a better world might become "Together for a better future" (Hyundai vision statement in their sustainability report). Vales that captures the complete framework of 'satisfaction/dissatisfaction, for all life forms, promotes diversity, access to/free from, etc'.

It might seams like a series of unrelated events; the environmental movement, the internet with access to free knowledge and data transparency, the financial crisis/frauds, unjustified distribution of wealth, Arabic spring, China, WikiLeaks, Obama, free teachings on ethics Professor Sandell's, TED, etc.  '
I think most can be traced back to similar values (of which non are new) but they happen to converge to enable a phase transition.

Sustainability reports:
The core focus for the current 'sustainability reports' is on the environment. Which touches upon society, and then balance it with all Traders/Stakeholders; =Humans (Suppliers, Financiers, Employees, Customers, Society) + Nature (all other forms of life).
Picture: Example of stakeholders, key areas, current state, activities (SCA page 9)

The reports basically defines "Resources needed to sustain a happy life* for One life form", and the value we place on a fair trade between the living resources; animals and other humans.
Note: Diversity is the key driver of change, similarity is the successful fruit of diversity. So there is a value in both similarity and diversity.
* Presence of Satisfaction and Absence of Dissatisfaction

The reports measures the input, output, efficiency ratio (lean or absence of negative effects) by resource (time included), trader/stakeholder, between different places in the process.

The reports define the Current state, Desired future state. The vision is 'the mountain top' we envision to go to. The mission is the way to get there. The strategy defines the chosen path (strategy). Chosen path since it's like climbing, it the pends on where we are, where we envision to go and what people/resources we have at hand right now.

Picture: Example of current/future state Volvo page 11 (site).

In essence, the trader/stakeholder surveys will define; What do you want, what are you willing to pay (trade for it). Quality as measured from a stakeholder is the difference between current and future state.

The 'sustainability reports' is a form of 'balanced scorecard' that aims for a successful mix/balance between all trader/stakeholder perspectives. The different traders speaks in terms of their perspectives (and visions).
The biggest efficiency is when the traders cooperate, and the biggest inefficiency is when they don't.
In essence, efficient/inefficient is all about peoples ability to cooperate. The presence/absence of these management (bio) markers/success factors; increase chances for a successful business.

Now these changes normally don't happen all at once. They occur in leaps - from each new and successful change.
Picture: Greater result (values) only comes after periods of successful change.

In essence, the above changes can happen faster (catalyzed=time efficiency increase), by following certain values/ethics/rights (like Human rights, Natures rights, etc) and certain good practices/standards, that benefits most stakeholders.

Since it a complex chain of if-then's, it usually takes a team effort (group thinking) to feel what is right rather one (leader) that knows what is right. The team knows when it works, but working teams (and individuals) usually needs a coach/guide/teacher.


Unpublished: Integrated Reporting, Integrated Reporting, For Benefit Corporations, TEDx B Corps, Facts, FAR and IIRC, Stakeholders risk/return formula, 2, EconomicTheory&GlobalCrisishrh-the-prince-of-wales-global-sustainability-film, Ethos movie, Moral duty Pr. Sandel (Kant), Rule of Law, 2, 3 generations of Human Rights, Natural Resources

Sketch book notes

Biology: Picture1, 2 and Building blocks

Linguistics=language means communication. Communication in physics is transfer of energy. 
Main categories=Noun, Verb, Adjective(=Object property), Adverb(Process property), ... 
Pro-form=Basic questions/dimensions; what(thing), where(place), when(time), how(procedure), why(benefit)
Head initial (examples): 
  English: Kim has put the book on the table (process, object)
  German: Kim hat das Buch auf den Tisch gelegt (object, process)
  Left or right branching (=the difference between Bottom up or Top down thinking, Roots and Leaves perspective. Guided micro circular turbulence reduces the end turbulence)
Dexis=Requires contextual knowledge, 
Discourse=Communication to and from
SVO=Somebody does something=org., process, unit

Mathematical categories: Aend=Astart*x. 
A=object before and after a change (from start to end).
x=change  (i.e. linear change). A change can be anything.

Non essential: The step change is probably a 'Lévy flight motion' - a fundamental motion for life - with a forward motion related to the depth/width/quality of the memory; the feedback process (recursive). 
"The Lévy walk pattern appears to be ubiquitous in animals, similar to the golden ratio, phi, a mathematical ratio that has been found to describe proportions in plants and animals throughout nature."

Justice from Wikipedia: "Justice is a concept of moral rightness based ethicsrationalitylawnatural lawreligionequity and fairness, as well as the administration of the law, taking into account the inalienable and inborn rights of all human beings and citizens, the right of all people and individuals to equal protection before the law of their civil rights, without discrimination on the basis of racegendersexual orientationgender identitynational, origincolorethnicity,religiondisabilityagewealth, or other characteristics, and is further regarded as being inclusive of social justice.
According to most contemporary theories of justice, justice is overwhelmingly important: John Rawls claims that 'Justice is the first virtue of social institutions, as truth is of systems of thought.' Justice has traditionally been associated with concepts of fatereincarnation or Divine Providence, i.e. with a life in accordance with the cosmic plan. The association of justice with fairness has thus been historically and culturally rare and is perhaps chiefly a modern innovation [in western societies]. "
Link: JusticeHarvard.org, Rule of law, World Justice project

Why is the above important? When 'everyone' sense a fair distribution of satisfaction (and absence of dissatisfaction) - everyone will be motivated to cooperate. This is the secret to any successful company; and can be seen in Top Customer, Employee, Community and Investor satisfaction. To get there we need the right guiding principles (what's right and wrong) which builds on the right values (good and bad).

Theories of distributive justice need to answer three questions:
  1. What goods are to be distributed? Is it to be wealthpowerrespect, some combination of these things?
  2. Between what entities are they to be distributed? Humans (dead, living, future), sentient beings, the members of a single society, nations?
  3. What is the proper distribution? Equal, meritocratic, according to social status, according to need, based on property rights and non-aggression?
Goods is important because it's what - and especially why - we trade. What's essential to the specific trade.
Sentient is important because it's like short and long term memory of what we sense. Purpose is like a long term memory. We bring it back time after time, because it makes so much sense - a universal explanation/solution/ to so many problems.

High in value for an entity = higher purpose/meaning'. 
High in waste for an entity = without purpose or meaningless.
Note: purpose or goal=telosis and used in teleology, to establish the final cause or purpose is the most important, and links to 'Good' and the principle of 'Beauty'.
The simplest explanation is a creation without a creator, since every creator would require an endless chain of unimaginable complicated creators creating ever more complicated creators. It's a logic built on the opposite of Occam's razor, and efficiency. I believe in efficiency, and that every complexity builds on the simplest building blocks; unimaginable minute differences, iterated, and scaled up to what we see 'as the world' today. The next paradigm will come when we start to understand the special branch of chemical reactions we refer to as life; or very long lived, self-sustaining processes.

Distributed decisions