Key ingredients for corporate success

Success itself means a lot of different things to different people.

Corporate success depends on a number of interrelated management decisions, structures and policies. For instance, every business needs good people working for it. In big businesses especially, new hires are often recruited by a professional HR team that can target HR requirements for the company to ensure the organisation can obtain the right people for its needs.

Success is often linked to money. Although of course profit is important to help a business grow, corporate success is not just about money. Critically, corporate success is also about good corporate governance, about managing risks, about achieving sustainable value, and about being engaged in the needs of the customer, the shareholder or other stakeholders.

Corporate success is about being a great company – whether large or small – a business that has a clear vision, a clear mission and a direction that makes it a great organisation to do business with, and a great organisation for which to work.

The finance function plays a crucial role. Whether a small business or a large corporate, the finance function can add value, helping to fulfil the organisation’s ambitions for growth and for success; and a finance function – whether in house or as a consultant – can also help a business thrive and expand to become a bigger business, if it so wants to be.

Corporate success is also about being ethical and sustainable. Upholding ethics and sustainability are both essential ingredients for a company’s long term success. Royal Caribbean Cruises was named the world’s most ethical company for 2016 by Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices. This is great accolade for this global cruise vacation company which sails across the Caribbean and other parts of the world.

Organisations have a responsibility to account for their impact on society and the environment – an integral part of corporate success. Organisations must develop strategies that take account of their impact of sustainability and should consider environmental issues alongside their core business functions.

The accountancy profession has an important part to play in developing strategies and solutions in response to the environmental, sustainability and carbon challenge. In October last year, the Global Reporting Initiative (GRI) launched GRI Sustainability Reporting Standards: the first global standards for companies to use when explaining their sustainability impact. The standards cover a range of non-financial areas where a company may have an impact, including its economic, environmental and social footprint.

This idea of more holistic, non-financial company reporting is not new: Integrated Reporting, or , has been around for many years. Indeed, ACCA starting using for our own financial reports in 2014. Under , companies are expected to report on financial and non-financial elements of their performance, giving investors a ‘bigger picture’ of their activity, with a nod towards the future sustainability of their actions.

This type of reporting has been prioritised on a global scale, with the United Nations, under their Sustainability Development Goals (SDGs), encouraging countries around the world to adopt such practices.

According to the Caribbean Corporate Governance Institute, at the onset of 2016 there were no known applications of integrated reporting in the Caribbean, despite the significant advantage that such application would offer to early adopters.

The global move towards non-financial reporting indicates a desire from investors to see a more holistic picture of a company, and offering such information would certainly make Caribbean businesses more attractive to local and international investors.

More than 1,000 businesses around the world use to communicate with their investors, and 70 percent of the world’s 300 biggest companies already use GRI Standards. Adopting a holistic reporting approach not only promotes economic, environmental and social sustainability in business practices, but it can also improve a company’s ability to attract and retain investors.

Successful businesses both large and small play a significant role in supporting the Caribbean economy and providing stable employment. There are many large conglomerates headquartered in the Caribbean’s commercial hubs – Barbados, Jamaica and Trinidad. Businesses across the whole region have a responsibility to ensure utilise their finance function to ensure they’re better positioned to withstand challenges to the business environment to maintain and exceed their current success.