Potts & Co: A Social Responsibility Case Study

• Now ask participants to consider how socially responsible they think their own organization is. Advise them to think in terms of their company’s impact on the environment, its relationship with the local or wider community, and how well it treats its employees.
• Encourage participants to note down any good suggestions and think about who in their organization these ideas could be passed to for action, e.g. a senior manager, divisional head or other person responsible for CSR, e.g. their Communications department.

Suggested Answers

General

As an advisor, you will wish to point out that CSR can bring considerable business benefits, e.g. enhanced reputation, reduced overheads, improved stakeholder relations and healthier and happier staff. It can also help the organization anticipate and manage risk better.

Once Potts & Co has decided on the CSR activities it will undertake, it should promote these measures on its website and its intranet if it has one.

Environmental Responsibility

• Longfellow’s jet-setting ways are creating a sizeable carbon footprint for Potts & Co. He could reduce this by either taking scheduled flights or using the train where possible to visit clients in order to set a good example to the rest of his team.
• Conference calls, video conferencing and virtual meetings would be another good way for the bank to cut down on its carbon footprint (it would also help the bank cut down on costs).
• Where travel can’t be avoided, Longfellow should consider buying credits in a carbon offsetting project such as reforestation or a wind farm in order to reduce Potts & Co’s carbon footprint.
• Longfellow could try to tempt employees out of their cars by subsidizing season tickets for the train and/or tube. If staff are given company cars, he could set a limit on the engine size that the company is willing to provide, with ‘gas guzzlers’ strictly off limits – this will save the bank money as well as help the environment, as the annual road tax on these vehicles is now rising.
• The company could cut down on its use of paper, e.g. by asking employees to avoid printing emails unless necessary and providing a recycling bin. Employees should also email correspondence to clients wherever possible and put things like corporate brochures online, rather than mailing them out. (It is acknowledged that some less computer-literate clients will prefer to continue to receive communication by mail.)
• Although they might sound like small measures, ensuring that PCs are switched off at the end of the day and lights switched off in rooms that are not in use could conserve a considerable amount of energy.
• The company may also wish to engage the services of an environmental consultant to advise them on where further energy savings could be made.

Social Responsibility

• It would be a good idea for the bank to review how ethical its current investment strategy is. Do its fund managers invest in companies associated with the arms trade or which employ cheap labor abroad? If so, are its clients aware of this? The bank might wish to boost its ethical credentials by investing some of its clients’ money in the shares of companies listed on the Dow Jones Sustainability Index, or on the FT4Good Index. It might even wish to consider offering an ethical investment product.
• While the company does make some charitable donations, it may wish to vary the types of worthy causes to which it donates – perhaps he could ask his staff or clients to make some suggestions.
• Longfellow could also consider introducing a staff volunteering program, by which employees would be encouraged to put their professional expertise to use in the community, e.g. giving financial advice to a local regeneration project. This could also provide PR opportunities for the organization.
• While corporate entertainment is important to the business, it does seem on the extravagant side and requires clients to travel – Longfellow could consider entertaining at fewer events or offsetting against these events in some way.
• It would be a good idea for Potts & Co to draw up a code of ethics if it doesn’t already have one.

Workforce Responsibility

• Longfellow might wish to consider appointing a ‘CSR champion’ in the office to ensure that one person is driving the company forward in terms of social and environmental responsibility. If it has a person in-house who is responsible for HR, then they could be tasked with ensuring that Potts & Co is an equal opportunities employer, that offers fair and suitable development opportunities for its employees.
• The next time a vacancy arises, Potts & Co should consider diversifying their employee pool, rather than immediately opting for a male candidate with the right school tie.
• By bolstering its ethical credentials, Potts & Co will make itself more attractive to potential recruits, as employees become increasingly concerned about social and environmental issues.
• With work-life balance and health and wellbeing becoming an increasingly important feature of the socially responsible organization, Longfellow should consider making changes to the bank’s long hours culture. Introducing some measure of flexible working could help to do this, as well as helping staff to avoid traveling at the busiest times.
• The bank might wish to consider applying for accreditation with a body such as ‘Investors in People’, which would help the organization to focus on important elements such as staff training and development.

Potts & Co - Task Sheet

Potts & Co is a private bank based in London. It offers personalized banking and fund management to a client base of affluent and privileged individuals. Established in 1888, its clientele has included the landed gentry, entrepreneurs, and even some famous musicians over the years. The bank is situated in extremely comfortable offices, just off Bloomsbury Square.

The bank prides itself on its reputation for offering a discreet and personalized service, often to several generations of the same family. Potts & Co refuses to follow what it sees as business fads, preferring instead to stick to what it has always been good at.

The bank takes extremely good care of its clients; the annual Christmas drinks party is by now the stuff of legend. It also has a busy calendar of events for clients throughout the year, including hospitality at Henley, Ascot and the Edinburgh International Festival. Corporate communications take the form of quarterly glossy brochures, which adorn drawing rooms and bathrooms from Kensington to Richmond. As well as reporting on financial performance, Potts & Co’s brochure includes property advertisements, a wine guide and restaurant recommendations.

Despite the considerable sums of money managed by the bank, it is run by just a handful of trusted staff, most of whom have worked at Potts & Co for 20 years or more. It is headed up by Torquil Longfellow, an Old Harrovian, who has enjoyed the confidence of his investors for almost 25 years. One of the aspects of the bank that Longfellow particularly enjoys is not having company shareholders to answer to, which means his fund managers can invest clients’ money in pretty much any companies they wish.

Longfellow is a well known figure on London’s social circuit and sees his role at the bank as that of relationship manager and networker. He thinks nothing of chartering a jet to take him to meet a client at their Highland estate or arranging consultations with overseas clients at Potts & Co’s villa in Antibes.

The other members of staff have all been hired through the ‘old boys’ network’, although they recently employed a young female receptionist, who, disappointingly, resigned just a few weeks into the job. Most staff are at their desks by 8 in the morning, with most not leaving until at least 7 at night. However, employees are well rewarded, as demonstrated by the BMWs, Jaguars and Mercedes in the company car park.

Longfellow believes that Potts & Co is a responsible business that ‘does its bit’ for charity and the community. After all, the bank has recently donated several thousand pounds to improve the playing fields at a local prep school, and the company often takes a table at prestigious charity dinners.

However, it is gradually becoming apparent to Longfellow that the bank’s commitment to social responsibility may not be enough by today’s standards. A couple of younger account holders have been ‘bending his ear’ about the bank’s lack of social and environmental awareness, and he was recently heckled when he spoke at a banking dinner.

Alarmed at this rising disquiet, Longfellow has researched what the big banks are doing about corporate social responsibility, but he is concerned that much of their activities are either irrelevant or unachievable for an organization of Potts & Co’s size.

Task

You have been brought in by Longfellow as a consultant to help the bank become more socially responsible. What steps and measures would you advise?