The Future in Focus

So, hello all and welcome to the latest episode of LRQA's Future in Focus podcast. My name is Holly Wild. I am the Global External Communications Manager for LRQA and it is my pleasure to record this podcast today with my colleague Vikas Neeraj. Hello, Vikas. How are you doing?

Hi, Holly. I'm good. Doing well. How are you? 

Yes, very well. Thank you. Great to hear. So welcome, Vikas. Could I actually start by just asking you to talk to us about your title and what you do within LRQA?  

Thanks, Holly. So I am a service delivery manager for India under Inspection Services Business Unit, and I have been with LRQA for the last 32 years. 

Thank you, because, we are going to be talking about really exciting development within LRQA. Our listeners may already know that we have been recently working on and have launched our internal sustainability strategy called, Our Planet, Our Plan. Now, this is no ordinary sustainability strategy. We are so proud to have taken a much deeper and more progressive approach, which strives for a level of transparency, not often seen in the market. 

Our planet, our plan sets out our environmental, social, and governance ambitions, otherwise known as ESG, to deliver a positive impact for our colleagues, our clients, our suppliers, our communities, and our planet. The plan stretches over seven years, which actually coincides with the UN's sustainable development goals and is organized into seven commitments, that magic number there. 

So that's safety, equity, community, inclusivity, education environment, and governance. And through our podcast today, we'll be doing a deep dive into each of those pillars, with governance being our topic for today. I'll be speaking with Vikas, who has been closely involved in the development of our Planet, Our plan and has a lot of experience in the field of governance. 

So again, Vikas, thank you for joining me, and I'd love to get started if that's okay with you. Before today, I asked you to think about a bit of an introductory story for us, something that's really got you thinking about governance or has really stood out to you recently in that field. Can you share it with our listeners for us? 

Well, thanks, Holly. So if you're asking me about a story, it's not a story. It's a fact, which has happened with me. Personally, it has been, four or five years now since a lot of renewable energy thing has started in India, particularly. And one of the companies where I was associated very closely was making solar panels and these solar panels were having this manufacturing of solar panels was a big startup for that company. 

So initially they started with the manufacturing of solar panels with a significant growth in first two years. In fact, investors were very happy and it was a technology was groundbreaking. And it had a potential to change the landscape of renewable energy. But in two years’ time, end of the two year, the company was looking at being plateaued. 

It was not growing as much as they thought of. Then the leadership team took a break and decided to see the root cause. What had happened was, in this company, where we had done a pretty good inspection from our side, they had a lot of sources, the material which was coming in to make the solar panels. 

And they were also coming from various sources which were unknown and they didn't have any information about how they are making their own material, which they are supplying, having a sustainable system. And what happened was that these material, when they were coming in, how to dispose it off. They didn't have that, the batteries which were being used for solar panels, the disposable of these batteries, that was not considered. 

So all that was part of some lower growth for this company and leadership started thinking about what we need to do and finally end of the third year. This company closed down. The first thing which happened was the reputation of the company became very bad and also the business itself went down. So that was a something which came up when you spoke about the governance part is immediately that example came in, which happened very closely to me and that company closed down, unfortunately. 

Wow, thank you, Vikas.  that paints such a picture of the real consequences that can happen.  just quickly on your story there, how, how common are those kind of events? Does that happen to companies quite a lot, do you find?  

In fact, if you look at the renewable energy business started off in a big way in last five, six years, and the business, the market itself was so volatile because everybody wanted to come into this market to make money without having any sustainable policy behind it. 

And this company was one of those, which didn't have that growth, the sustainable, policy behind it. And that's the reason why they went down quickly. And there are so many companies which are coming in this market that many number of companies are going out of this market. All because of the governance issue, lack of governance and lack of policies behind it. 

Wow. Okay. That's, that's really interesting. So we've understood now, I guess, a real life example of governance in action, in a business context. But I want to make sure that our listeners, that we all start right from the beginning and we actually all understand. First off, what is governance in the context of business? So you've provided us with an example there, but how would you define governance in the context of business just as a basic starting point?  

Okay. So for me, the good governance is a vital for an organization's long term success. It doesn't come in the short term. So it's a long term success, which it brings in. 

And this governance is a framework which brings in the open and honest decision making. Transparency, openness, compliance, and ethical behavior. That is what good governance is for me. Brilliant.  

And, what are the primary reasons that a business needs great governance? Why do we want businesses to sit up and listen to the need for governance? 

I guess the great governance or good governance brings accountability to the highest environmental and social governance. It also creates transparent rules and controls provide guidance to the leadership and aligns the interest, not only to the employees, but also to the management themselves, the shareholders, the stakeholders, and the value chain. This is normally builds their trust with the investors, the community and the public at large.  

I like how you just summarized that last line actually there. So, what you're saying is that governance is actually just doing good business, right? Would you put it that simply?  

Absolutely.  

Excellent. So, with that in mind then, how would you say that governance in the business context has changed in the past few years, and you know, how might it change in the next five to ten years?  

If we take that first part of the question first, how has governance changed in the business context in the past few years. If I look at the past few years, Holly, is about what changes have come into the market in the business environment is the technological advancement, number one, , the stakeholders expectations. 

There's been an increased competitiveness has come in, change in the lifestyle, and also urbanization. These are some things which I can think of what has changed over the last few years in the business perspective. And the second part of your question for next few years is what I am looking at is a boom in the digitalization of everything what we do, whether it is in business or in personal life. 

There has been a significant change in the workforce, their expectations. Another very significant thing is about the impact of artificial intelligence coming in, access to the new technologies to the people, which is going to be very, very easy in coming years. There has also been societal values which are getting shifted from past years to going to be new coming years. 

And also evolving clients expect expectations with respect to the suppliers. So I think this is something which the clients are looking at more about not support, but the solution provider for their managing risk.  

Absolutely. It sounds like there is so much to think about within governance. There are so many different aspects of governance. And I guess that's what your role is Vikas, you know, within LRQA, supporting clients, knowing where to start with governance and how to manage all of those different aspects all at once. Do you find that that's a common problem that clients just don't really know where to start? 

I think so, because this is something in many countries, like emerging countries like India, that this is a buzzword, I would say, and, still people are working on what ESG is all about. And they are trying to build in a lot of rules and policies behind it. So it's just for me, I think it is just a starting stage for many other countries around the world. 

And that's where a lot of positive impact is being seen from those successful companies who are already doing it, and that is a role model for the companies which are working on it. 

Interesting. So you've spoken there about a few factors that have influenced and changed and evolved governance, including societal issues and technology and AI, for example. But ESG, again, that's environmental, social and governance issues. That's had a big impact on governance as well. Could you talk a little ESG? 

So on ESG is basically ESG impact on the governance is that companies maintain a sound managing management structure and robust policies and procedures. And that is basically to demonstrate a good ethical work or the policies and the practices as well as their financial performance. I think all gel together, not only the sustainability part connect with the financial performance as such. So that gets blended very well with the ESG.  

Great. And just one last question for you, Vikas, if I can. It's obviously really unusual to see an internal sustainability strategy that hopefully goes as far as ours does and is as progressive as we've tried to make ours with seven individual pillars looking at all different aspects of sustainability. And what does it mean to you? Are you pleased to see that governance is one of those seven pillars in our internal sustainability strategy?  

Yes, of course. And I think the good governance brings some mutual trust among all the stakeholders for shaping a better future together. And also it creates an environment and a workplace where everybody would like to work. 

With openness, with honesty and with ethical behaviour. I think these are the something which I'm very, very passionate about and we're very much committed to that. Oh, what a fantastic summary. That was excellent. Thank you.  so thank you so much, Vikas. I think it really brings ESG to life hearing from people directly working in the field like yourself who see and feel its impact every day. 

So you've really brought this topic to life for us. Thank you so much, Vikas. Thank you so much, Holly.

And finally, just a reminder to our listeners that you can learn more about Our Planet, Our Plan on the LRQA website and see our digital dashboard which tracks our progress against all seven pillars. You've been listening to the LRQA Future in Focus podcast. Thanks so much for giving us your time and we hope to see you soon.