Who is the Primary Non-Social Stockholder?

Image: Grupo Anchieta

Hi, everyone! It is my first blog about sustainability and other green stuff. Hopefully, you will enjoy it. Because it is important!

I managed to cover the topic Corporate Social Responsibility (CSR) during the last week. Although it was intensive, I realised how it is essential to prioritise substantial solutions before seeking personal economic benefits. To start with, we must at least equalise the demand of both environmental and financial aspects.

Out of my work experience, the primary motivators for an employee to work hard and reach individual goals are the salary, its growth and self-development. Even if there is a person that currently works without any wage, it means that he managed to sacrifice his current possible prosperity for his future benefits. It is reasonable as there are a lot of possibilities and goods might be open as soon as possessions are big enough. Accordingly, to make the employees responsible for the environment, their salary needs to be related to the growth of natural capital. In that case, the willingness of enrichment and desire to be sustainable will equalise.

To make it possible, I want to propose two ideas that might be applicable in real life. First, the recognition of the company’s natural capital similarly to working capital for accountability. Working Capital identifies as a difference between Current Assets and Current Liabilities. Accordingly, Natural Capital has to be a difference of Current Assets, introduced by Nature, and Current Liabilities, described as repayments for the holding, provision and usage of Natural Inventory, services and the leased land.  In that case, the principal lender, Nature, will be recognised as a stockholder and will finally start to gain related interest fee; any ownership will transform into the flexible life-long lease; any current owner and lessor will be recognised as a lessee and intermediate lessor respectively. Any missing repayment and differences between the previous carrying value and current fair value will be identified as a liability at the moment of the sale/leaseback.

The second idea is the establishment of a generalised system of salaries and bonuses for all employees and management. Every member of the company is vital to a certain degree and needs to be motivated and engaged in the working process. Depending on the level of responsibility and the importance of the work done, the employee will gain bigger bonuses and lower fixed wage. For example, if we assume that the 100% is the desired salary and bonuses are sufficiently related to the person’s contribution and company’s marginality, an employee on a bottom of the corporate pyramid will gain 90% as fixed salary and might win another 30% as a bonus. In comparison, the CFO will get 50% as fixed salary and might get 150% as bonuses, reaching 200% at the highest level of contribution and marginality, doubling the value of his desired salary. As a result, everyone engages in working progress and interested in company’s bilateral growth.

Finally, after implementation of those practices and revaluation of the relative ratios, the sustainability of the business will be accounted and efficiently used for changes in strategic planning and, furthermore, the promising realisation of the sustainable practices on the market.

In the end, are we owners of Nature or we are owned by it?

See you soon!

Dmytro – April 2018

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s