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Coutts banks on boardroom diversity for future prosperity

Author: ICAEW Insights

Published: 26 Nov 2021

Widely known as bankers to the Queen, Coutts bank is working to future-proof its business and ensure a pipeline of diversity through its Boardroom2030 project.

Coutts may seem like an unlikely forerunner for the environmental and social reputation movement, but having gained BCorp status this year, the 329-year-old bank is now building on that momentum to participate in the Boardroom2030 initiative.

Boardroom2030 is designed to kick-start debate about what its board should look like in 2030. Nine years is a drop in the ocean for the centuries-old bank, and unlikely a timeframe to overwhelm a financial institution that has reportedly served members of the royal family since George IV.

The shift to improving its environmental and social credentials is as much about business continuity as it is about creating a more environmentally friendly, socially-conscious business. Coutts has long been a bank that serves high-net-worth families and their children, and it wants to continue to serve and retain those customers. 

The bank acknowledges that younger generations are, rightly, concerned about the impact of their family’s wealth on the environment and society and it wants to adapt to meet the expectations of younger generations.

Its parent company NatWest Group is also shifting its focus to become carbon positive by 2025 across its Operations. And Coutts has the ultimate ambition to reach net-zero emissions across all its assets under management by the end of 2050.

Risk management, stress testing and scenario planning

Coutts approached the Boardroom2030 initiative initially off the back of an internal project on diversity and inclusion that they had been carrying out. 

Kristina Spasic, who sits on Coutts’ executive committee representing Sustainability, Strategy and Innovation, says: “Originally, it was a project we were looking at in terms of demographics and how we ensured a broad spectrum of opinions around the boardroom table in the future, and whether we were then building that pipeline to ensure that we were going to get there. I would liken it to a kind of pre-mortem exercise.”

Coutts’s approach to Boardroom2030 differs slightly from other companies, in that the bank tackled it as if they were already in 2030 looking backwards. This fits with financial institutions’ methodology towards risk management, stress testing and scenario planning.

For the bank, diversity and inclusion is about ensuring a balanced set of voices around the table not just internally, but including customers, broader stakeholders, charity partners and anyone who has a vested interest in the work of the NatWest Group or Coutts.

Boardroom2030 ‘activation day’

Coutts handed ownership of the Boardroom2030 initiative to its junior management team, which numbers around 20 people. The team staged their event as an away day at charity partner The Royal Albert Hall, where they also invited a BCorp client. 

A 2019 materiality assessment about client concerns for the future revealed that clients were most worried about climate change and cybersecurity, so the junior management team focused the Boardroom2030 event around climate targets.

The team also asked the economics department to model macroeconomic progress against climate targets. “It was really interesting because they were looking at what they thought the outcomes of COP35 would be in eight years’ time,” says Celeste Leverton, Sustainability Manager in Strategy, Sustainability & Innovation for Wealth Businesses at Coutts.

Leverton, who is part of the junior management team, spent a lot of time planning the event with smaller practice sessions for participants to discuss the agenda and board representation. Everyone involved was allocated a specific board role, so the preparatory sessions helped to make sure that everybody understood what their role was, and the event could run smoothly. The event was also recorded so that it can be shared and reviewed more widely.

On the so-called ‘Boardroom2030 activation day’, the team focused the session on looking back, reflecting and considering future strategy. The other topic of focus was financial education and the role that banks play, especially with respect to social media and the duty of care that banks have. They also staged the day as they imagined it might be in 2030 with some team members physically present and others logging on remotely.

“We asked our current Board Secretariat to help us create the day, so it felt very real, and I think that's actually testament to its success because it felt like a real board. We focused on attendees, location and the topics,” Leverton says.

The outcomes and findings from the Boardroom2030 will be presented to the Coutts Board by representatives from the Junior Management Team in December. These results include how to include client and broader stakeholder views in key discussions. 

Leverton and Spasic also plan to rerun the Boardroom2030 event with the group’s executive committee next year and share their findings with clients who also wish to reduce their carbon footprint and ensure they are sustainable for the future.

Leverton says: “It was just a really useful exercise by going forward and then reflecting back that it actually sparked a lot of motivation to get moving now.”

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