Colin Storrar, the CEO of Lowell, one of the UK’s largest credit management companies, returns my question with a question, or rather a series of questions, when asked about his priorities since the first national lockdown was announced.
“How have you treated your people this crisis? Have you thought about their work environment? Have you thought about your customers and what they need or how they feel? Do you have better relationships with your suppliers than you did a year ago? Have you looked beyond the balance sheet at your stakeholders?”
“When you step back and look at what your business is doing now, what it has done and how it has behaved over the past year, did it do the right thing or even the fair thing for all its stakeholders? Have you had a good crisis?”
Storrar’s point is that the pandemic has brought into sharp focus the debate on responsibility and profit.
“I believe the two can co-exist: fair business is good business – doing right delivers and that has never been clearer,” said the qualified chartered accountant, who is a former HSBC executive.
‘Morality can feel over-egged’
At the end of last year, former Bank of England Governor Mark Carney made the point that societies, in pursuit of market freedoms, have gradually abandoned recognition of the human values that make life worth living.
“It is a bold point – and the morality can feel over-egged – but it extends to businesses and their appreciation of their stakeholders. Better awareness amongst businesses of their environment and their stakeholders can deliver better results,” Storrar said.
Fairness in business is by no means a new concept, yet often profit and fairness are seen as trade-offs. To many in the City, the perception still exists that doing the right thing will cost money.
Yet, businesses with a clear identity and vision of what is the right thing to do continue to thrive during the pandemic, both reputationally and in their company performance, while there are many who continue to suffer whilst staring at the P&L, Storrar argued.
“You can be fair and make money. Many would not readily associate the debt collection sector with the values of fairness, but it is an industry where I see the value of fair practice every day,” he said.
“I lead a business where it matters every day because it directly impacts lives, as well as our business.”
According to a FCA study, the watchdog’s Financial Lives Survey 2020: The impact of the Coronavirus, which was published earlier this year, around 27.7m individuals in the UK are currently showing signs of financial vulnerability, a 15 per cent jump compared to pre-Covid levels.
“Millions of people are facing a financial crisis due to the impact of Covid-19. Households and families across the country are struggling,” Storrar said.
He warned that a debt wall is looming.
“Everyone in the credit cycle needs to look at their practices and challenge themselves to whether they are doing the right? Are we acting fairly?”
“Business has a better track record than government on ethical collection practices and I would urge those in local authorities and Whitehall departments to look with some urgency at the fairness of their approach,” Storrar noted.
At a time when people are under more pressure more than ever before, he sees it as businesses’ role to deliver better outcomes for all stakeholders.
“We can set higher standards in the industries within which we operate, and we can drive positive change,” he said.
Moreover, acting responsibly is worth it in the long haul, he continued.
“Responsibility and performance are not mutually exclusive. The businesses that do not recognise this will fall behind the curve. A fairer business is, in the end, a better business,” Storrar concluded.