Was Bain & Co a Better Company After Romney Left?

It's no secret that the relationship between presidential candidate Mitt Romney and his former company Bain Capital has been the focus of controversy over the past couple of weeks. Though known for achieving "stratospheric" returns for its investors, by the time Mr. Romney left Bain Capital the firm was also becoming notorious for management decisions resulting in mass layoffs at some of the companies it acquired.

With all the back-and-forth over Bain Capital it's easy to forget that before forming that company back in 1984, Mr. Romney was a well-regarded VP at a company called Bain & Company. It's true that 1984 was quite a long time ago, but the direction each company has taken - one with Romney at the helm and one without - showcase a striking difference in awareness about the importance of sustainability to business operations.

Bain Capital and sustainability

Judging from its website (remember, this is a "quick look"), sustainability has not been a high priority for Bain Capital. If the company has recently undertaken any significant initiatives, it has chosen not to highlight them for the general public, at least not on its website.

Underscoring this apparent lack of interest is the mission statement that introduces the company's Bain Private Equity group:

"Our mission at Bain Capital is to produce superior investment returns for our investors. To accomplish this, Bain Capital follows three fundamental principles that have driven the firm for more than 28 years: a high-performance culture, value-added approach to investing, and leveraging our institutional advantages."

If Bain Capital's website really is a good measure of the importance it places on sustainability, at least the company deserves a bit of credit for not bothering to greenwash itself. It also deserves a shout-out for its 28-year record of consistency on its fundamental principles.

Bain & Company and sustainability

Bain & Company is a different story altogether. The company currently highlights its sustainability initiatives as the third in a seven-item slide show that takes up most of the home page, and one click gets you to its mission statement:

"Corporate social responsibility is entwined in Bain's DNA because our people believe deeply in making the world a better place. And because we share our experiences with our clients around the world, the benefits of our efforts — like our work with community organizations or our certification as a CarbonNeutral® company — are magnified far beyond Bain itself."

Bain & Company achieved its carbon neutral status just last month by offsetting its travel-heavy business model with six targeted investments around the globe in geothermal, biomass, methane capture, old growth forests and wind power.

As Bain partner and head of of global operations Steven Tallman explained in a prepared statement:

“We feel strongly that Bain needs to be a role model on issues affecting our communities and the world at large. Achieving net zero emission is an important priority for our employees and recruits, and we are increasingly hearing that it is important to our clients as well.”

Bain Consulting and sustainability

Things really start to get interesting when you take a look at Bain & Company's consulting branch, where the page outlining its strategy is titled "Sustainability."

The page makes it clear that Bain views sustainability as an "increasingly important strategic area" that can help companies "gain a competitive advantage over the long term."

Bain also recognizes that companies need to address sustainability aggressively, and on multiple levels:

"'Sustainability' encompasses all aspects of ethical business practices, addressing relevant social, environmental, regulatory and human-welfare issues responsibly and profitably. Suppliers, employees, customers, shareholders, governments and communities all have specific agendas that need to be understood and managed. Companies need to take control of their sustainability agenda before others do it for them."

Sustainability, profit and collectivism

Bain & Company's sustainability strategy was articulated in depth back in 2008, through an article in the company's Bain Brief newsletter.

The whole piece is worth a read but one thing really stands out, and that is a line that writer Darrell Rigby throws out near the beginning of the article, to the effect that individual companies can achieve some significant progress in a limited number of areas, but "wider solutions require collective solutions."

Returning to that thought later, he explains:

"Eventually, every company begins to realize that the biggest environmental challenges require cross-industry collaboration and work with governmental and NGO [non-government organization] entities."

Rigby cites the World Economic Forum, which can "help create an international network of environmentally sensitive businesspeople who can work together on broad-scale or sector-specific initiatives."

Bain & Company and Mitt Romney

What emerges from Bain & Company's website is a company that recognizes the fundamental changes driving today's economy. Rather than treating sustainability as an abstract goal, Bain & Company articulates sustainability as a historic trend that entwines success in the commercial sphere with stewardship in the social and environmental spheres.

That might not necessarily make Bain & Company "better" than it was in 1984, but it certainly demonstrates a corporate culture that has evolved to recognize and embrace the kinds of emerging global challenges that the next president of the United States will have to confront in collaboration with leaders across the globe (yes, that includes British leaders, too).

This is the company that Mr. Romney left behind for Bain Capital, which appears to be forging ahead on precisely the same path it carved out 28 years ago.

Though Mr. Romney would like to sell his fitness as a presidential candidate on the strength of his business background, his background appears to be more than a little out of step with the times.

Image: Some rights reserved by cometstarmoon.

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