O
ON TOPIC
Q&A:
Inclusive capitalism at Legal & General
We spoke to Legal & General’s corporate affairs director John Godfrey and group HR director
Emma Hardaker-Jones about the practicalities of pursuing profit and purpose.
HOW WOULD YOU DEFINE YOUR
CORPORATE PURPOSE?
JG: To improve the lives of our
customers, build a better society for
the long term and generate value
for our shareholders. We operate
through a lens we call ‘inclusive
capitalism’. There’s no zero-sum
game between commercial success
and being socially useful; especially
over the long term — and we’re a very
long-term business, looking after
people’s pensions and investments.
Yes, we have to make the returns
for our shareholders, but we also
have to be inclusive and socially
useful. We invest the large amount
of money we look after, not only
where it will make a good return,
but where there are social
benefits; for example, in urban
regeneration, social housing
and infrastructure.
EHJ: This isn’t a response to a fad; it
has been at the heart of what our
CEO has been driving since he took
over eight years ago. It impacts
everything we do and it’s how we
describe the company to employees,
prospective employees and to
investors and other stakeholders. We
have three values: straightforward,
collaborative and purposeful.
COULD YOU GIVE AN EXAMPLE
OF YOUR PURPOSE IN ACTION?
JG: In Croydon, south London, we
invested £45m in housing for
homeless people, alongside the
borough. We bought 170-plus
homes, leasing them to the council,
which was then able to supply
housing to homeless people for less
than their housing allowances. It
meant a financial gain for the council,
a commercial return for us and the
principle beneficiaries were the
homeless people who had roofs over
their heads.
28 // Future Talent
EHJ: We also have a fantastic story
about an adult with severe learning
disabilities living in a property that he
was about to have to sell. Our team
and his community got involved to
help him and he was able to get a
lifetime mortgage that allowed him
to renovate what was a very
dilapidated property.
HOW DO YOU COMMUNICATE WHAT
YOU STAND FOR TO YOUR PEOPLE?
EHJ: We see strong scores in our
engagement surveys against things
connected to purpose and
communication, but we continue to
work on it, because purpose can
become very intellectual as a
concept. Our purpose should have
as much meaning for someone
sitting in a call centre as someone in
strategy in our head office.
The mistake organisations often
make is thinking “we’ve talked to
people about this once, so everyone
must understand it”. We’re making
this a part of our drum-beat
of communication, relevant to all
our audiences.
JG: People also tend to read what is
written about us externally. They like
to see evidence that we are really
doing things. I think people are smart
enough to see through it if it’s just
people talking the talk.
AND HOW DO YOU BRING YOUR
PURPOSE TO LIFE FOR STAFF?
EHJ: We tell stories about what our
purpose means in reality and are
doing a lot of work on our
employment brand, around our own
story. We’re asking people across
the organisation to tell their own
stories of why they joined and what
they contribute.
We also empower our staff to
deliver purpose. For example, an
initiative among our call centres
allows people to make a small
gesture if a customer is going
through a tough time. They don’t
need to justify that spend; they could
choose to send them flowers or
a hamper.
ARE YOUR PEOPLE MEASURED
AROUND PURPOSE?
EHJ: Very explicitly. For our
executives, 10% of their bonus is
measured on culture, with another
10% linked to strategic objectives. So,
over and above delivering the
business, about a fifth of senior
people’s bonuses is connected
to not just what they do but how they
do it.
DOES YOUR SOCIAL PURPOSE
SUPPORT RECRUITMENT?
EHJ: When I interview people, almost
without exception, they talk about
our social purpose.
There’s often a debate about
‘purpose versus profit’ – we think it’s
both. We have almost a decade of
double-digit growth. Having a strong
purpose gives us clarity in what we
do and how we do it and that comes
through strongly to candidates.
JG: We’ve recruited a lot of smart
people out of the banking world who
decided they would earn a bit less
money here, but that what they did
felt more meaningful.
WHY ISN’T EVERYBODY WORKING IN
THIS WAY IN YOUR SECTOR?
JG: In part, because we have a
company structure facilitating it that
I think is unique. It’s about the way
different bits of the business work
together and about the long-term
investment at the hear t of
the business.
But the world is kind of moving
in our direction — which is
very satisfying!