Markus T. Schweizer, Managing Partner for Strategic Solutions at EY Germany, Switzerland, Austria says public value is a tool for business to shape the public good and find solutions to the most complex dilemmas.
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Highlights of the conversation:
- Public value can be a flexible concept as it always depends on the specific values any society shares at a given time and place. As perceived by society, public value can change over time. In essence, it is a positive –or a negative– contribution to the public good as perceived by society as a certain point in time. The public value of global corporations, such as EY, will therefore vary from a continent to another, depending on local cultures and needs.
- Measuring the purpose of any corporation is synonym of measuring its public value, i.e. its gift to society.
- The ongoing transformation driven by technology, demographics, or globalisation creates a huge pressure on companies and forces them to transform deeply if they want to survive in our fast moving world. The best way for companies to transform remains creating and activating a purpose for the given company.
- In Germany, Switzerland and Austria public companies are the ones that have in majority defined their purpose, but only part of them have activated it. For these companies, activation would start with their employees and would mean informing all their stakeholders, as well as making the necessary institutional changes to give life to their purpose. In some cases, the historical legacy of the corporate culture can slow the process down.
- Professor Timo Meynhardt from Leipzig HHL Management School has developed a Public Value Scorecard that is used to measure the public value of companies and compare it over time.
- The EY Public Value Awards were developed with Prof Timo Meynhardt to educate start ups in generating value to societies. This resonates strongly with the younger generation and upcoming companies.
- Most institutional investors have moved their focus from a short-term to a longer-term perspective. The EY Embankment Project on Inclusive Capitalism is a proposal to articulate and measure long-term corporate strategies and offers a long-term reporting framework. We received support from the investment community. Larry Flink from Blackrock publicly stated that purpose-led companies were able to generate long-term value.
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