companies are expected to return profit
to their shareholders, but this should
not be at the expense of the other two
pillars. Nevertheless, without return on
investment, the business would not be
sustainable.
financial reporting for the third pillar,
sustainable companies are expected
to also prepare nonfinancial reports on
all aspects of their business. This is
referred to as sustainability reporting,
which provides data on non-financial
aspects of a company's performance,
including environmental, social,
employee and ethical matters, and
defining measurements, indicators
and sustainability goals based on the
company's strategy. As observed by
Professor Rosabeth Moss Kanter of
Harvard Business School, "Companies
that are breaking the mold are moving
beyond corporate social responsibility to
social innovation. These companies are
the vanguard of the new paradigm. They
view community needs as opportunities
to develop ideas and demonstrate
business technologies, to find and serve
new markets, and to solve longstanding
business problems."
Businesses in Kenya?
sustainability are reflected in the
directors' duties under Section 143 (d) of
the Companies Act, 2015, which require
directors of a company to always act in
ways in which the director considers, in
good faith, would promote the success of
the company for the benefit of its members
as a whole. In so doing, the director shall
have regard to the impact of the operations
of the company on the community and
the environment. Section 143 (3) further
obligates the directors in exercise of their
mandate to consider the desirability of the
company to maintain a reputation for high
standards of business conduct.
of directors, corporate sustainability
also ensures that a company attracts
and retains a high cadre of employees,
business partners, financiers and
customers. As observed by the former
CEO of Royal Dutch Shell, Jeroen van der
Veer, "The successful companies of the
future will be those that integrate business
and employees' personal values. The best
people want to do work that contributes to
society with a company whose values they
share, where their actions count and their
views matter."
to Ensure Compliance?
that are expected to be maintained and
implemented by businesses operating in
Kenya. These include, among others:
1) Sexual Harassment Policy (Section 6
Bribery Act, 2016);
Employment Act, 2007); and
Kenya, 2010).
guidelines that a company should
consider in its efforts to establish a
culture of corporate sustainability. These
include:
1) Organisation for Economic Co-
on Multinational Enterprises;
important in ensuring that a business
mitigates its legal risks against
potential criminal and civil liability,
avoids reputational risks and is
compliant with ever-growing stringent
requirements to become part of supply
chain of multinational or leading local
corporations. These corporations are
particularly cautious of engaging
with entities that may pose potential
noncompliance with modern slavery,
bribery and corruption, human rights
abuse and breach of privacy concerns,
which pose astronomical financial and
reputational risks both for the local
corporate entities and overseas parent
companies.
according to its size and resources,
decide what commensurate actions to
take towards developing a culture of
corporate sustainability and promoting
sustainable development in its sphere of
operation. This will not only add value
towards holistic growth into a profitable
and friendly work environment, but also
mitigate risks and losses associated
with unsustainable corporate practices.
To start or enhance this journey, a
business should consult dynamic and
knowledgeable corporate lawyers who
will undertake the relevant due diligence
and provide guidance. I believe these
are the sentiments that were echoed by
business mogul Richard Branson who
observed that, "We need government and
business to work together for the benefit of
everyone. It should no longer be just about
typical `corporate social responsibility'
where the `responsibility' bit is usually
the realm of a small team buried in a
basement office. Now it should be about
every single person in a business taking
responsibility to make a difference in
everything they do, at work and in their
personal lives."