Shared value of changing bank

Responsible behaviour - "not me, that the job of our CSR team"

Why is it so hard for companies to contribute to society?

I have been changing my bank connection, and why all the fuss about that? I have been a customer for 40 years in Danske Bank and started with a penguin account in Hedensted's Egnsparekasse. 40 years in the same bank. For me, that is a very long time, and why did it take so long time. It could be compared to as if I had been shopping in the same grocery store for 40 years. Why would I do that, and why is it so “difficult” to switch?

I have known about white-washing of money in Estonia, now for a while, but why did I not get a new bank? Was it just a lukewarm platform? A bank that does that and promotes the guilty guy to be the CEO, will they ever be the best at helping me? Well, I do not know, but I did not act.

However, just recently I wanted to create a business account, and Danske Bank wanted 2000 DKK to do that. I challenged them on that, but there was nothing to negotiate. Suddenly to me the platform started burning. I now felt in a tangible way that they were really about optimising their own wallet and not thinking about me as an investment, or an asset worth keeping.

Well, I concluded by starting the search for a new bank. But before jumping into that I developed one simple shared value criteria that I wanted to be fulfilled:

Listen to the bank, ensure that they were good at explaining what was in the deal for them, and related to that what they could do for me.

I want to have a socially responsible bank. Danske Bank states on their website that "their ambition is to create sustainable development and positive impact on the communities they are part of". That sounds great, but in the light of things, they appear as empty words.

When leaving Danske Bank, I was having a chat with the local bank director (sous chef). She was a very kind person, and we ended up discussing how companies (including them) could be proactive in managing their trust asset. When I challenged her that she too could be doing something locally on sustainability, she said, and I quote: “Let me wait until they have something from the HQ”. What she told me was that responsible business practice was not her responsibility, that is a central issue.

She basically said that acting in a responsible way was not her job, and that little statement may be the essence of the cultural problem that Danske Bank (and many other companies) have.

When employees are outsourcing responsible business practices to a central Corporate Social Responsibility department they will never be responsible.
Currently, Danske Bank is hosting a wide range of “1-2-1” dialogue meeting with customers. This to indicate that they are sorry about what has happened. I truly believe that 95% of all Danske Bank employees feel that, and that only a small fraction are just sorry that they were found out.

The question is, why does a company end up in this situation?

Many economists have tried to answer this question. Milton Friedman responded in the 1970s that "a company's responsibility is to earn money in an honest, open and competitive manner without cheating and deception." One may say it seems that Danske Bank heard the first half of Milton Friedman's sentence, only.

It is not hard to understand how a company can end up in a situation seen not only in Danske Bank but also Nordea. Corporate social responsibility leads a hard life. I think it is due to the fact that internal promotion often happens to those who are good at cutting costs and making money. “The winners have contributed to the financial bottom line” is the expectation. Often company executives make a career by focusing on the first part of Milton Friedman's sentence.

Few companies have in their strategy and implementation had had enough focus on the latter part of Milton's sentence “being honest, open and avoiding cheating and deception”.

But it is possible to create a successful business and being open and honest. A few days ago, Paul Polman retired in Unilever. While being at his post, Paul Polman changed Unilever to have a socially and environmentally responsible model, while returning investors money 3 times.




Paul Polman has restored pride in working in Unilever, and created a culture in which contributing to society lies in their DNA. He has shown that companies can be successful while contributing to society.

Back to my bank shift:

I have had a conversation with three other banks. Someone even at the other end of the country. These conversations have been eye-opening about who they are, how they view their long-term success and revealed their view on how to contribute to society.

The most progressive banks I've met have thought: “Wonderful, a new customer, it's good for us, let's do something good for our customer. We may not earn so much money now, because we have to hand over money to the National Bank to have money in our account, but in the long run, it's good for us, maybe we can win a loan transfer or sell some insurance”?

One bank stood out: they wanted us to save all our free funds in their retirement plan to give us a free business account. Their argument was that it was our advantage to save money on the tax.

There was at least one very big difference between the advice given. I felt that two of the banks advised me well, and created transparency on how this created value for them.

One bank clearly stood out in a negative way. They devised ways to avoid taxes, and told me that this was my upside, all paid for by taxpayers”. Only when asked directly, they shared that their upside of this deal was the additional administration fee for pension savings schemes.

Professionally I have worked for many years with the "Business Case of CSR". One part of my responsibilities was to create transparency on how business created value for itself and its customers.

We live in times where trust is scarce for companies. My experience is that if you do not tell why you act as you do, stakeholders find something that is much worse than your original intention.

When it came to choosing a new bank, I do not think it was a secret that I chose the bank that was good at explaining the connection between my benefits and theirs. The preferred bank was transparent and had clear metrics for how our relationship created shared value.

And back to the question of why a company ends up in this situation? As long as companies centralize acting positively for society in a CSR department on a fancy city address, and stick to reporting what good they do, they will keep on having trust issues.

So what could companies do?

1) Change culture. Acting responsibly is a job for every single employee

2) Integrate into strategy: Acting responsibly is a board and leadership issue, and the CEO should have this on his mind, always.