Tuesday, 20 April 2010

Customer value and share value

After reading an interview with Paul Polman, the CEO of Unilever, in the FT I want to congratulate him for reopening an important debate, and I hope that other CEO's will follow his lead and start talking about who the most important stakeholder in a company should be. Paul's argument was that making share value the key objective of a business is great for in the short term but is not so good for the long term planning or prospects of a company. By focusing on the customer and consumer and ensuring the company acts as a good corporate citizen long term profits are ensured.

CBC's corporate social responsibility makes a similar point, while share holder value is important there are other considerations. Customers must be considered the most important stake holder, no company can continue without the continued support of its customers.

CBC's approach is based on the fact that Customers and Shareholders play the most important role in shaping the values and strategy of the Company.The other stakeholders being the employees and suppliers.

Good corporate citizenship based on customer satisfaction includes many benefits such as brand reputation, ability to enter new markets and defend existing ones and retain good employees. As Polman has demonstrated with Unilever companies that prioritise customers and act as responsible members of the communities they operate in "share value" success will follow.

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