M&S chief Bolland says shareholders must judge sustainability programme over medium term

Marc Bolland, Chief Executive of Marks & Spencer (M&S), the UK clothing and food retailer, has joined a small but growing number of business chiefs arguing that their strategic and sustainability projects should be judged over the medium- to long-term by shareholders rather than subject to short-term revenue assessment and quarterly reporting. Speaking at the BSR conference in New York on October 24, Bolland was asked whether Marks & Spencer’s sustainability programme, called Plan A , risked upsetting shareholders who thought the company might be devoting too much time to ‘caring’ and not to the bottom line. Bolland said he would not be concerned if shareholders made such comments, but said he hadn’t heard any do so: “We believe that shareholders come to us for a mid-term story and they either like it or they don’t. What we are doing is about company value over time to our customers. Is there a cost? Yes. But it’s about customer loyalty and doing things for the right reasons. Some shareholders might think we’re doing too much of this, but none has ever said anything to me.” Bolland, a Dutchman and former Chief Operating Officer at Heineken and ex Chief Executive Officer at Morrisons, the UK supermarket chain, has been feted as one of the most successful business people in the UK after he organised a major turnaround at Morrrisons. Bolland, who succeeded Sir Stuart Rose as M&S CEO in 2010, said he was in regular contact with fellow Dutchman and friend, Paul Polman, Chief Executive at Unilever, who in 2009axed three-monthly corporate reports at the food and personal care group and announced a major focus on the company’s Sustainable Living Plan. Bolland said that delivery of M&S’ Plan A sustainability programme also made up a significant part of his personal bonus plan on the same level of accountability as his responsibility for the company’s cost control. He said this was essential to ensure organisational “buy-in”. The question of strategic corporate value, including sustainability, has become a discussion point among company executives and observers. The recent report on UK equity markets by Professor John Kay, the respected economist and FT columnist, said that quarterly reporting by companies was effectively meaningless and meant little in terms of the ways that companies actually created value. Instead, Kay said, quarterly reports often buried information and were carefully managed public relations documents with scant substantive information. Marks & Spencer launched Plan A in January 2007 with what it said were the aims of combating climate change, reducing waste, using sustainable raw materials, trading ethically and helping its customers lead healthier lifestyles. It initially set itself a target of 100 commitments to achieve in 5 years, of which Bolland said 94 had now been achieved. It has extended Plan A to 180 commitments to achieve by 2015, and has said it wants to become the world’s most sustainable retailer. Bolland is overseeing a major expansion of Marks & Spencer globally with an opening rate of 100 stores per year at present with notable expansion into India, the Middle East, Asia and Russia.