Beyond the numbers

Many years ago I qualified as a Chartered Accountant and have maintained my membership of the relevant institute, the ICAEW. In my new more relaxed existence I have started to pay more attention to it and even visited their premises in London earlier in the month. I came across one of their recent publications 'What Should Companies be responsible for?'. It is meant as a discussion piece to stimulate debate. The old school answer would be 'to make money for shareholders' but, I believe, as apparently does the ICAEW, that life isn't that simple any more. It proposes four responsibillties.

1. Achieving a business purpose. I agree that this is fundamental and in my old life that purpose was 'to provide the energy people need in a reliable and sustainable way'. The article puts it this way

" A company needs to achieve a business purpose which stakeholders can understand. It may be, in the case of a retail bank, to offer financial services suitable for its customers or, in the case of an energy company, to supply energy on a reliable and sustainable basis. Stakeholders including employees, customers, suppliers and lenders, as well as shareholders, all expect companies to achieve their business purpose. Serving its purpose effectively generally enables a company to generate continuing profits and value for shareholders. However, generating profits and shareholder value is not in itself a sufficient business purpose for a company."

2. Behaving in a socially acceptable way. Of course the definition of what is socially acceptable changes but businesses have to have regard to accepted norms and standards but business also has to take a longer term view than the media or politicians might.

3. Meeting legal and regulatory requirements. Enough said.

4. Stating how responsibilities are met. I would prefer being transparent and being prepared to be held to account but the sentiment is the same.

It is good to see accountants going beyond the numbers and tackling some difficult philosophical issues and their list is a good starter for four.