Moving the needle from theory to practice was at the heart of AIAG’s 2016 Corporate Responsibility Summit, held April 27-28, 2016, at the Suburban Collection Showplace in Novi, Michigan. Speakers addressed a variety of CR topics, providing the latest information to help participants build a business case for sustainability.
In a five-part article series, enjoy some highlights from AIAG’s popular annual conference dedicated to enhancing sustainability performance in the global automotive supply chain.
Workforce and Profitability Risks
Chris Coulter, CEO at GlobeScan, and Julie Bogas, partner, advisory services at PricewaterhouseCoopers LLP, gave attendees a better awareness of the issues impacting managers and company performance.
“Risk management is at the heart of value creation for sustainability,” said Coulter. “Companies today are pursuing sustainability in a way that creates value.”
Much of that value comes from identifying which issues and challenges can be “flipped to opportunities,” he explained. “Some issues are live and continue to grow. You want to move from risk to opportunity, but the key is not to wait too late until things are big and overwhelming.”
Of course, as Coulter pointed out, many issues a company faces cannot be controlled or converted to opportunities. In these cases, he said, reputation management is crucial. “It's about perception and perspective,” he said.
For instance, climate change is one of the biggest issues concerning the automotive industry. “An organization’s corporate responsibility officer must bring the risks associated with climate change to the board level, or they are not doing their job,” he said. “This is an example of a CR issue that is relevant, critical, and board worthy. And you can use this issue to focus your board on corporate responsibility and then move to other issues.”
Bogas shifted the discussion to an examination of which issues CEOs see as the biggest threats to their organizations. Topping the list, she said, is the availability of key skills among personnel, a concern that ranks higher than even cyber threat.
“The aging workforce is already creating shortages in STEM, as more than half our workforces are over the age of 40,” she said. “CEOs are also worried about losing institutional knowledge.”
Another challenge is attracting the best skilled people to the manufacturing sector. In a recent survey about the perception of the automotive industry in Michigan, she said, only 41 percent of parents and teachers — the most influential group giving advice to young people — said they would recommend a career in the automotive industry.
“The concerns are of instability and that it is a dead or declining industry,” she said. “And when the survey questioned youth ages 17 to 24, only 30 percent said they would consider a career in automotive. Every sector is a technology sector now, so the tech-savvy young professionals don’t have to work in automotive.”
Bogas did offer CR Summit participants some advice on how to attract younger generations, which begins with spending more time and resources on listening to employees. “Offer a more flexible work culture to allow them to accommodate family and outside interests. Also leverage technology to facilitate collaboration and execution strategies. Let employees do their work when and where they want to do it,” she said.
On a broader scale, Bogas counseled attendees to take a serious look at human rights issues. “Many organizations are not aware of the risks in their own companies, let alone the companies within their supply chain,” she said. “But these are the types of issues that present a high risk to a company’s reputation. It’s important to work toward the ability to verify companies before they enter your supply chain.”
“Develop methods for truly understanding a company’s culture in your supply chain,” Coulter added. “Push verification activities further down the supply chain through certification.
“In the world of risk, the best defense is a good offense,” he concluded. “The goal is to build thick trust, which is broader and more robust. A thick trust is your best long-term defense, so look for the opportunities to build it. Employees will trust you if you are making the world better through your products and services.”
AIAG members can access all the presentations from this year’s Corporate Responsibility Summit online at www.aiag.org.
Carla Kalogeridis is AIAG’s e-news editor.