Peter Erskine, who became chief executive of mobile phone company O2 in 2001, talks to EP about corporate responsibility as seen from a CEO’s perspective
In
many ways, O2’s Peter Erskine is the typical private sector chief
executive – confident, dynamic, articulate, and committed to making his
business a runaway success. But his active commitment to corporate
responsibility marks him out from the herd.
Speak to the man
himself, however, and he will leave you with the impression that most
chief executives have now ‘got’ CSR. Erskine mixes regularly with the
heads of Europe’s largest companies and is in no doubt that any
cynicism at the highest level of business about the need for corporate
responsibility has largely been dispelled.
‘Of course chief
executives have come at corporate responsibility from a sceptical
stance; I think they’re sceptical of all things,’ he says. ‘But I’ve
not met any CEOs of FTSE 100 companies who now don’t realize it’s very
important to get things correct in that space, and that if you don’t
get the brand right as a result, then you’re dead meat.’
While
he concedes that not all CEOs have moved at the same pace, Erskine says
it would be wrong to argue that a lack of commitment from the most
senior executives remains a significant sticking point.
With
14 CEOs last month publicly urging UK prime minister Tony Blair to set
tougher targets on greenhouse gases, Erskine points out that company
leaders are even beginning to get to grips with climate change,
although he concedes that this is one area where more commitment is
needed from the most senior executives. ‘Chief execs are getting there
on climate change, but I would say that many still need to be
convinced, and some just pay lip service,’ he says. ‘There’s a lot more
that can be done. More CEOs need to become more aware that climate
change is a competitive challenge to their brand – that they will
perform better if they tackle it. Climate change is the litmus test of
just how serious any business really is about being responsible.’
Erskine
was not one of the chief executives who signed the letter to Blair, and
he concedes that it is easier for the head of a mobile phone company,
which has a relatively small impact on climate change, to take a strong
position on the need to cut emissions. He has however gone much further
than most signatories by publicly committing O2 to the long-term goal
of being entirely ‘carbon neutral’, although the company has yet to
state when this goal, which is highly unusual for a FTSE100 company,
will be met.
‘We certainly get a big push on climate change
and other business responsibility issues from the public at O2, and in
particular from our employees. The staff are challenging us all the
time, and they represent their customers,’ he said.
Erskine, who
is 55, has a background in the telecoms industry. Before joining O2, he
held senior posts at BT from 1993 and is now on the board of
Telefónica, O2’s new owner. Will the takeover by the Spanish telecoms
provider, which was completed earlier this year, be detrimental to O2’s
CSR strategy? Erskine thinks not, saying the two companies are in many
ways kindred spirits on CSR.
He makes no claims to being a
proponent of corporate responsibility in the mould of Sir Mark
Moody-Stuart or Lord John Browne. But the roots of his enthusiasm for
CSR go back to 2001, when O2 was spun off from the former state-owned
BT. ‘I don’t think I could ever have been classed as a CSR sceptic, but
undoubtedly what crystallized things in my mind was when we became a
new and separate business from BT,’ he says. ‘I realized then the
importance of getting these things right. When you’re launching a new
brand you can very soon kill it if you don’t get across the feeling
that you’re a company which acts responsibly.
‘The push to
behave responsibly also came very powerfully from within, that is to
say, from our staff. It mattered to them that we were seen to be
responsible, and, as we met lots of potential new shareholders when
separating from BT, we had a lot of the big institutions asking us
questions in that area.’
CEOs, it seems, are no less immune to
peer pressure than lesser mortals. David Varney, the former O2 chairman
and leading light in Business in the Community, was a ‘great challenger
and mentor’ for Erskine, who believes that CEOs also need to be talked
to in a language that they understand.
‘It would be a shame if
some sceptics were not “converted” just for the want of a better chosen
word here and there,’ he says. ‘Some people in CSR have to be more
aware of that, and to move towards commercial reality – to move an inch
further towards the business agenda. It’s an important balance to
strike.’
When chief executives do show interest, Erskine
believes that the expectations placed on them should be realistic. ‘I
haven’t got the time to manage detailed programmes, so it’s about
knowing what’s going on, setting the agenda, making sure you have clear
measures to track progress, and asking the right questions,’ he says.
‘But it’s also about how you do the job. If you can run the business in
the way you would like to live your life, you’re not going to go too
far wrong.’
