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Barclays Africa latches on to Michael Porter’s ‘shared value’ – Video
3:33 CAT | 05 Jul 2016
File photo / Maria Ramos, CEO of Barclays Africa
Barclays Africa CEO, Maria Ramos, says that the bank’s new shared growth initiative is about “leaving communities better than we found them” by focusing on education and skills, enterprise development and financial inclusion.
“Africa is our destiny. We know that we can make a huge difference, and we must make a huge difference across this continent,” she told Moneyweb on the sidelines of the banking group’s Shared Growth launch on Monday.
“It’s about stewardship… it’s about our ability to share, to grow, to prosper.”
Asked whether shareholder returns would be sacrificed in pursuit of shared growth, Ramos maintained, “I don’t know that this is about trade-offs. Things that are good for business and communities are good for shareholders.”
This idea is not new. Michael Porter first introduced the idea of “creating shared value” (CSV) in the Harvard Business Review back in 2011, where he argued that business-as-usual capitalism was “under siege”, as companies remain trapped in a “narrow approach to value creation” focused on maximising short-term financial performance.
“Companies could bring business and society back together if they redefined their purpose as creating “shared value” – generating economic value in a way that also produces value for society by addressing its challenges,” Porter argued.
The idea – which is one that makes perfect sense – has unsurprisingly gained credibility with scores of business leaders, including Discovery’s Adrian Gore. Gore frequently bangs the shared value drum at the group’s financial results presentations, which is effectively at the heart of the Vitality model.
Ramos said Barclays Africa has already made some trade-offs and “stopped a bunch of things”, although she was not willing to name any.
Among them could be Absa’s Currie Cup sponsorship, which came to an end last year after 30 years. An article published in City Press suggested that the contract was said to be worth R20 million.
Education, enterprise, financial inclusion
Barclays Africa’s shared growth strategy – which Ramos emphasised was not philanthropy but a core part of business strategy – was formally launched to staff on Monday.
The pan-African group’s 42 000 employees can only be proud of working for the firm and “bring their full selves to work” if they know that “what they do matters and makes a difference”, Ramos said.
“We all want to have a higher purpose, I know the things that make me tick when I actually go and do things that aren’t driven by… that are just about giving,” she said.
Barclays Africa plans to focus on three overarching themes in its shared growth initiative: improving access to quality education, helping small- and medium-sized enterprises (SME) grow and ensuring more people have access to financial services.
The bank, together with some of its corporate clients and development organisations, will make R1.3 billion in low-interest loans available to SMEs across the continent in 2016.
These will be extended to emerging businesses that wouldn’t ordinarily qualify for funding via traditional channels, due to weak balance sheets or insufficient collateral.
Some R1.4 billion will be invested in youth education programmes across Africa over the next three years, targeting 18- to 35-year olds.
The group’s ReadytoWork programme, which delivers skills-building curricula online, is running in eight countries and will be rolled out to others this year, according to Ramos.
She said that the group’s three-year growth strategy, launched in 2014, remained the strategy it was following.
“This is a big day for us, we are making a serious and clear commitment to the continent on which our strategy depends,” Ramos said.
Source: Money Web
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