Leadership for a Sustainable World The advent of Human Governance

Value orientation – short, long term; narrow or broad based? “ ” The paradox is that by not pursuing profitability to the exclusion of all else, the Great Engine companies in their Golden Age would achieve enormous increases in value...whereas, by single- mindedly pursuing profit...these same companies and their successors actually created less genuine, lasting wealth; indeed, they would often destroy it. (The Puritan Gift, Kenneth & William Hopper)

Defining & adding Value 3 € += Increased Output (O) Reduced Cost (C) Increased Revenue (R) Increased Quality (Q) Value of business now Value of Business in 1, 2, 5, 10 years ADDED VALUE €€ Societal value generated by producing the best quality products/services at the lowest possible cost (including any external harm e.g. environmental)

HUMAN GOVERNANCE People’s behaviour aligned A Coherent Model for Societal & Business Value through Human Governance 4 BUSINESS aims to maximise returns SOCIETY determines acceptable corporate behaviour VALUE

Understanding how human capital drives value & risk:

“In principle, our organization can only maximize its value if it aims to maximize the value potential of all its capitals; including the human capital it directly employs or utilizes via its value (supply) chain, or through other third party stakeholders.” “As a responsible organization, using scarce resources, the only legitimate and sustainable management philosophy is one of never-ending, continuous improvement.” “We can only produce the best shareholder and societal value by providing our best possible products/services at the best possible cost, without undue external impact e.g. on the environment.” Human Governance emerges with the recognition that the organization is committed to the never-ending pursuit of societal value through realizing the full potential value of its entire human capital. Maturity statements

THE TEN ‘PILLARS’ Value Motive Whole system Learning Organizatio n Improveme nt philosophy People risk Human capital ethos Trust, engagemen t, cooperatio n Performan ce system Communicati on Business/pe ople strategy Maximizing value & understanding risk:

Measuring or rating maturity: 8 “Art is about learning to see and to observe. And the sciences are about seeing and observing.” – Ed Catmull, Pixar

Stage 2 Basic professional practice & simple processes Stage 3 Seeking more from people using more effective methods Stage 4 Human capital recognised as integral to business operations Stage 5 Transition period from operational to strategic focus Stage 1 Compliance only Board & Executive do not recognize potential value of human capital Stage 6 Organisation becomes a whole human governance system Stage 0 No interest in professional management of people The MI & OMS Scales – Board/Exco & Investor Perspectives OMS © 2016 HIGH VALUE REALIZATION – REDUCED INVESTMENT RISK – GREATER STABILITY UNREALIZED VALUE – GREATER INVESTMENT RISK & INSTABILITY OMR © AA- AAA BBB BBB- BB+ B- D CCC- BB BB- B B+ CCC+ CCC C CC BBB+ A- A A+ AA+ AA

The Organization Maturity Index: OMI:150 (UK) View the live index at:

Value vs supply chain orientation Embedded societal value & responsibility Truly inclusive workplaces Best/sustainable resource use Learning, knowledge & innovation High trust, cooperation & informed decision making Human Governance drives higher value, lower risk & ‘good’ outcomes “social, economic, environmental, and ethical factors directly affect business strategy—for example, how companies attract and retain employees, how they manage the risks and create opportunities from climate change, a company’s culture, corporate-governance standards, stakeholder-engagement strategies, philanthropy, reputation, and brand management.” – David Blood 2007

Linking Purpose, Human Governance & Value

Thank you @StuartWoollard

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