Clare Swindell is Co-Chief Executive at National Lottery operator, Camelot, and was previously CFO at dunnhumby. Here, she shares her thoughts on why CFOs need to think beyond traditional value, how businesses can engage local communities to have a positive social impact, and how measures of success are changing.
How has the role of the CFO changed and what challenges are you facing?
Most CFOs will agree that the role is focused around value creation. But to me, this goes beyond traditional value like cash flow or profit. It's value across a balanced scorecard, which also includes the broader impacts of our business on society, on the planet, and on our communities around us.
That means looking at value differently. If the business wants to invest in something that isn't necessarily going to directly drive top-line revenue or profit but is the right thing to do, I look at that as an investment opportunity and still make sure I’m asking if it’s the best value choice to support that broader value agenda.
Twenty years ago, social value wasn’t such a big driver of strategy and decision-making. But I’ve definitely noticed a step change, and the CFO’s role now is much more about balancing those priorities. One of the challenges is how you embed this in the business as a whole, and how you measure the impact. One of the ways in which a CFO can do this is to make sure social value features on the risk agenda. However, social value is less defined and not as easy to track as, for example, EBITDA or share price. There are some external frameworks out there which have been developed to help with this, but measurement remains a challenge.
Thinking about social value means you also have to ask different questions. Questions like: what's behind the investment? Who are the beneficiaries? What will the impact be? What's the sustainability of the investment that we might make? Is this a token gesture, or is it something that we can deliver well as it’s part of our DNA?
All of this can present challenges, but it’s easier than it might have been 15-20 years ago – as social value is now much more well-accepted as a priority for businesses today. In the social value space, you could have been a real pioneer and still not found it very easy to make progress in the past. But there's much more of a sea change in this space, and much more awareness of the influence businesses can have in driving this forward for the benefit of society and the communities around us, as well as the planet.
What social and economic issues keep you up at night?
Climate change. The extremes of weather we see globally point towards how fragile the environment is, and we seem to struggle to work well enough with other countries on a global scale to make a difference. Shorter-term demands tend to take priority, and there isn’t enough of a long-term global plan for how we are going to fix it.
I also worry about the impact of an aging population on our social care and health systems and whether we can find appropriate solutions to manage this in the longer term. And it also feels like inequality in our society is not improving as much as it should.
What can businesses do about these?
For climate change, there are some real tangible things, like using energy more carefully and reducing our carbon footprint and emissions in our own activities and those of our suppliers. So, taking a more responsible approach to supply chain management and looking at our own operating models is a starting point.
“Taking a more responsible approach to supply chain management and looking at our own operating models is a starting point.”
Addressing social care and inequality is more challenging for businesses to directly impact (because so much hinges on government policy and spending). However, there are opportunities to contribute. Businesses can provide extra support to employees — carers or caregivers — facing social care challenges with loved ones, by providing flexibility, compassion, and understanding to help them through the challenges they are facing.
When it comes to inequality, there’s quite a bit that businesses can do – particularly working with our local communities. Our community investment programme, 'Living Life Changing’, connects Camelot employees with Good Causes through volunteering with National Lottery-funded projects, and maximises their charitable donations through match funding and payroll giving. We also have longstanding partnerships in that respect with three Watford-based charities: Watford Mencap, The Conservation Volunteers, and The Watford Peace Hospice – to which Camelot employees give hours of volunteering time each year.
Some of the other things we’ve done at Camelot, for example, is to take teams into local schools to speak with sixth formers, help them write CVs, and give them interview practice. When we have a Finance team away-day, we typically invite a local charity to come along. And, at Christmas, we’ve made hampers for a local homeless charity. Activities like this are helpful in embedding our purpose and, of course, they contribute to the positive social footprint we are trying to leave.
What makes it easier for business to be a force for good?
The infrastructure and incentives around driving social value have improved over time. For example, ESG considerations in corporate finance decision-making are driving real change, with businesses increasingly needing to show ESG credentials alongside cash flow forecasts to secure funding. Of course, having a powerful incentive such as that – whereby businesses not only need to think about ESG considerations but having them form a key part of their financing activities – drives real change in this area.
Key thought leadership forums that focus on social value – and what it means – enable business leaders to tap into what others are doing, so we’re not all trying to find our way by ourselves. We need to learn from each other’s experiences, and help create the opportunities to make these connections.
“We need to learn from each other’s experiences, and help create the opportunities to make these connections.”
That works within a business, too: setting up employee networks, for example, to connect people and give them a place to collaborate with each other on important topics and come up with brilliant plans. At Camelot, we do that at a grassroots level — with specific networks that focus on different social value areas and are led by employees who are passionate about key social value topics. For example, our Environment Network was established by people from around the business to raise awareness and reduce the environmental impact of Camelot as a business and as the operator of The National Lottery.
How do you go about measuring success?
Many years ago when I was working at Tesco, we came up with our balanced scorecard which we used across the business to maintain focus on customers, our people, operations, and finance. Success was determined by progress in all four quadrants, and I’ve taken that mindset with me throughout my career.
When I joined Camelot, although each part of the business had its own set of metrics, these weren’t ‘joined up’ in a particularly meaningful way. Today, we have a dashboard of around 40 to 50 Key Performance Indicators (KPIs) that give us a holistic view of performance. A minority of these are ‘pure’ financial metrics, and the rest cover brand, operational, integrity, people, regulation as well as other metrics to give us a sense of the organisational heartbeat.
A challenge we’re facing — like lots of companies — is how to measure the impact of activities aimed at delivering social value. We’ve been looking into how we could establish an infrastructure for measuring social value, looking at frameworks like B-Corp, and thinking about how to embed social values considerations into our employee and supplier programmes, including how we measure the success of this.
“We’ve been looking into how we could establish an infrastructure for measuring social value.”
What challenge would you give to your peers?
I’d offer two challenges to my peers. First, as CFOs, try to take a broad strategic view of your business beyond the typical CFO agenda and take the lead on embedding social value metrics into their KPI suite. And, second, spend as much time as possible talking to younger members of your team and use that as a reverse mentoring opportunity. The world is changing so fast, and what people want out of the organisation they work for is changing too, so it’s good to keep really close to that.
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