The Chief Value Officer: Accountants Can Save the Planet

Authors King and Atkins do a masterful job of not only adding strength to the argument that business as usual must change, but also provide new and novel guidance on how to get there from here. Of particular importance is their recommendation that organizations formally establish Chief Value Officers (CVOs) and Corporate Stakeholder Relationship Officers (CSROs), two functions required to operate sustainably in the new and inclusive economy in which shareholder primacy is renounced and the types of value created, destroyed or transformed by organizations are acknowledged as much more than economic.On the disappointing side are vestiges of incrementalism still present in what the authors write when they use language like enhancing “a company’s efforts to maximize corporate value”, a hangover from shareholder primacy that I suppose is hard to shake. In the new, inclusive and sustainable economy, there is no need to maximize anything. All that is required is that vital capitals be maintained at levels sufficient to ensure stakeholder well-being.And despite the authors’ superb job of laying out the case for stakeholder (not shareholder) primacy, they then go on to limit their focus on capital impacts to only the ones used or affected by organizations’ own operations – another vestige of shareholder primacy, this time with the organization itself at the center of things. What about impacts not yet occurring but which ought to be occurring given duties owed to stakeholders?And what about the need to set company-specific standards of performance for what such impacts would have to be in order to be sustainable? Sustainability reporting is not just about impacts on non-financial capitals, it’s about impacts on non-financial capitals relative to organization-specific limits and thresholds, the logic of which can also be applied to financial performance.That all said, I find this to be an outstanding contribution to the new, inclusive and sustainable economy literatures by two authors with impeccable credentials in the field. None of the criticisms I offer above are fatal and can easily be applied in the form of refinements to what King and Atkins have written. I wholeheartedly commend the book to anyone who, like me, is dedicated to making a serious go of transitioning to a new, inclusive and sustainable form of commerce, a form that many of us are now referring to as multicapitalism!

excellent visionary work of the master Mervyn King . a must read for accounting and financial professions who want to help lead their enterprise in long term value creation.

This is an easy-to-read book explaining why Integrated Reporting is an idea whose time has arrived. It explodes the myth of shareholder-primacy. Now that average shareholding times are down (from 5 years in 1960) to 22 seconds in an era of high frequency trading and equity investments in banks range between 4 and 7 %, what privileges shareholders over other stakeholders who bear the real risk? It cites examples of where lack of timely stakeholder engagement has exposed companies to unnecessary and existential risks.The book goes on in Part II to document the progression of corporate reporting to Accounting for Sustainability, Global Reporting Initiative, the International Integrated ReportingCouncil and successive King Committee reports. These are said to result from the resource-deprived Planet Earth being at at tipping point at which "business as usual" (and accounting as usual) cannot do the job required. The book claims that this predicament is widely acknowledged (p94) but the extent of widespread denial is entirely understated. The book also claims (p36) that integrated reporting has the general applicability to our multicapital world that double entry bookkeeping had to mono capitalism. But sadly the IIRC has so far focussed on quoted companies, ignoring universities, hospitals, governmental and NGOs. All of these are facing the same turbulent multicapital world.Part III explains why the Chief Financial Officer role is obsolete in a world in which all six groups of capitals should be treated with due respect. Hence (the title of the book) the Chief Value Officer is needed to lead value creation across multiple capitals. The book ends with some accolades to leading implementers of multicapital reporting. The needs for profound change in the scope of and training for the accounting profession are made with justifiable conviction (in some cases as if plans were already realities, p107-8).So where does the book fall short of a 5 star rating?Firstly it fails to set out any methodology by which Multiple Capital Accounting can be implemented in practice.Secondly it fails to provide any mechanisms for integrating the various strands of multiple capital accounting.Thirdly, it disregards the need to set performance standards (norms) by which the sufficiency of performance can be judged.Fourthly, it ignores the need to incorporate local and global context into the measurement process.Happily, the MultiCapital Scorecard (Thomas & McElroy 2016) offers solutions to all these matters. It builds on the arguments put forward by King and Atkins. It goes on to ask the question "how much is enough?" in all areas of impact, measuring progression towards sustainable performance across the triple bottom line. That is what Chief Value Officers will need to address the change management challenge that most organisations face.

AAA+++