How accountancy can make the business case for social good
26 February 2020: Precious Sithole, CEO of non-profit accounting and consultancy firm Social Practice ENT, talks to ICAEW Insights about the correlation between accountancy and social justice, diversity and leadership.
Founded in 2018, Social Practice ENT bills itself as a small firm with big social change aspirations. Its founder Precious Sithole seeks to apply commercial strategies to help solve social issues — with all profits from the firm reinvested back into the social enterprise.
In this interview with ICAEW Insights, she outlines how the firm is built on strong social and environmental principles, her ambitions for Social Practice ENT and beyond, and how expectations of leadership are changing.
Can we talk about applying commercial strategies to help solve social issues? How does accountancy generally (not just within Social Practice ENT) achieve this objective in terms of outcomes, skills, influence? And how does Social Practice ENT do this too?
Being socially and environmentally responsible can bolster an organisation’s image and build its brand. This is particularly important in today’s connected world, where both for-profit and non-profit organisations are more visible than ever.
There is a greater push from key stakeholders for all organisations to be values and purpose-driven. Edelman’s 2018 Earned Brand review, for example, found that 64% of consumers around the world will either buy or boycott a brand because of its position on a particular social or political issue.
Clients are not always aware of the business case for being more socially and environmentally responsible. Therefore, accountants as trusted advisers can tell clients about these benefits. Advisory work primarily requires establishing a strong relationship, built on trust, that enables you to counsel the client. This is a skill that is developed from early on in an accountant’s career, that can be leveraged for social good.
As a qualified auditor, I’ve been sitting in client boardrooms since the age of 23. I am acutely aware of the fact that I have access to key decision-makers and the privilege to use my influencing skills for good.
What is your approach to mentoring charities and social enterprises, so they not only achieve their trading/accountability goals, but also the best social and sustainable outcomes?
Language and the way we frame arguments are crucial when it comes to social change. I have the privilege of working solely with charities and social enterprises that are purpose-driven and set up to address some of the most pressing issues of our time.
The challenge, however, is that purpose-driven organisations sometimes fail to see the social and environmental problems that are caused by their own internal activities and practices.
A charity that, for example, is working tirelessly to address the homelessness crisis, may not necessarily consider recycling and their organisation’s overall carbon footprint as issues worth addressing.
Some charities also have limited unrestricted funding and struggle to implement new ambitious strategies. Being able to frame the argument for social good in a pragmatic way is therefore imperative.
As such, our approach involves clearly outlining the business case for both social and environmental responsibility. Green practices, for example, can lead to significant cost savings through waste reduction and energy switching. Likewise, diversity in teams reduces group think – it has also been widely researched that there is a positive correlation between diversity and profitability.
There is also mounting pressure from funders for charities and social enterprises to demonstrate both social and environmental responsibility or risk losing funding. We, therefore, provide our clients with synthesised information, equipping them with the knowledge/resources that they may need to make social decisions.
What does your work advocating engagement with the United Nations' Sustainable Development Goals entail?
General awareness of the United Nations' Sustainable Development Goals is still quite low in the UK. Outside of International Non-Governmental Organisations, there is very little engagement with the Goals. Our work, therefore, involves raising awareness, signposting resources that are available and providing consultancy services. Awareness-raising includes engaging existing clients, speaking at cross-sector events and writing guest blog posts.
As an organisation, we have imbedded the Goals at a strategic level, so we are able to share with our clients what we’re learning as we go. For example, we are currently working on a consultancy programme in partnership with a university, supporting women from refugee communities to build micro-social enterprises. This programme aligns with Goal Eight (Decent Work and Economic Growth) and Goal 10 (Reduced Inequalities) of the Sustainable Development Goals. We are also on a journey toward reducing our carbon footprint as an organisation, in line with Goal 13 (Climate Action).
We are not a large organisation with a big CSR budget – rather, we are a small values-based organisation with big social change aspirations. Our client base, therefore, finds our pragmatic approach relatable and our solutions easy to implement.
Does your client base of charities and social enterprises address a broad base or are you more heavily engaged with specific issues at present?
As a social enterprise, we have clear commercial and social objectives, the two of which are not mutually exclusive. We operate in a niche market, specialising in providing services to charities and social enterprises.
The firm is built on social justice principles. As such, our client portfolio is segmented and we aim to ensure that at least 50% of our portfolio consists of charities and social enterprises set up to address issues of racial, gender and/or economic inequality. Our portfolio currently includes organisations working to improve socio- and economic conditions for individuals from ethnic minority backgrounds, youth charities and refugee organisations.
We have also recently signed a grant-giving foundation and a community farm social enterprise, so our work is currently impactful and exciting in equal measure.
What is wrong with the prevailing expectations of leadership? What is missing? How should it adapt to fit the challenges ahead?
The traditional top-down, command and control leadership approach is no longer appropriate in a rapidly changing and complex world. Today’s leaders face the mounting challenge of leading multi-generational teams with values, interests and needs that often conflict. For example, most younger millennials and Gen Z, want to participate and engage in every aspect of their work. As opposed to being told what, when, where, and how to do their work.
There are also major societal issues such as the climate emergency, rising levels of poverty, lack of representation of minority groups in influential positions, mental ill-health etc. that are now being addressed more openly at work.
Where previously, work and “life” were seen as two separate spheres, it is now widely expected that the two should be mutually reinforcing. A progressive leadership approach is therefore needed to cope with today’s challenges and demands.
Staff generally perform their best when they can bring their whole selves to work and when their basic needs are met. More understanding and flexibility from leadership in an organisation can help to ensure that women with childcare needs, people with caring responsibilities and people with disabilities are not penalised by rigid one-size-fits-all processes.
To attract and retain emerging talent, each organisation (both for and non-profit) will have to demonstrate a measure of social and environmental responsibility – or risk losing out to competitors. This doesn’t just apply to staff, the same applies to attracting new clients or in the case of charities, securing funding.
What are your key priorities for the rest of the year, both personally and professionally?
My key priority professionally for the rest of the year is to continue using my platform for social good. We’ve made big strides in the past 12 months and we hope to continue pushing the boundaries and demonstrating that enterprises can indeed be forces for good.
On a personal level, the plan is to continue challenging myself and to be bold in raising my voice against injustice. Sometimes it is wise to stay silent, but never calling out what you know is wrong isn't wisdom – it's fear.
Being bold certainly isn’t easy but as Laurel Thatcher Ulrich aptly put it, “well-behaved women seldom make history”.