September 1, 2017 Mission statements and strategy
When was the last time you revisited your mission statement? If it was some time ago, then you are not alone; after all for many organisations, particularly where the product mix remains unchanged, it would be understandable for review energies to be directed towards areas such as budgets and forecasts.
But even if you started out selling widgets, continue to sell widgets, and intend to remain a widget seller for the foreseeable future, the world in which you sell your widgets has moved on. Your product may not have changed but expectations and interactions could easily be far different now than when you started up in business.
So whilst standard business practice is to regularly review budgets and business plans, it is also advisable to sit down and review not only your strategy but also your mission statement from time to time. And who better to take the lead in revising and renewing than the Financial Reporting Council (FRC). Not only has it just revised its mission statement, it is has also taken the opportunity to re-launch its website.
The website redesign has followed consultation with stakeholders and is intended to be more flexible and easier to navigate. This, says the FRC, will put stakeholders in control by presenting reports and relevant information in a new way.
The FRC’s new mission statement is simply to “promote transparency and integrity in business.” It is a perfect illustration of the way in which mission statements need not be lengthy but should get to the heart of the reason for the organisation’s existence. Commenting on the refresh the FRC’s CEO Stephen Haddrill said that the new mission statement “recognises how our work on corporate governance and reporting combines to meet the needs of users, preparers and the wider community within which business operates.”
It’s a perfect time for the FRC to re-launch its mission, coinciding as it does with the government’s announcement on corporate governance reforms. These include measures in respect of the disclosure of pay ratios, transparency and employee voice. The headline announcement which will require listed companies to reveal the pay ratio between executives and employees has garnered significant comment in the press.
Perhaps more interesting is the requirement for large companies to publicly explain how their directors take employee and shareholder interests into account. Whilst one of the key duties of a director, that of promoting the success of a company, already encompass the requirement to have regard for the interests of employees and others, being expected to articulate the decision process may require a revaluation of the decision making process. Perhaps in turn it may cause a few organisations to review and revise their own mission statements, approach and strategy.