“Around the world, we operate long-term assets and businesses across the globe. This approach dictates both our investment strategy and our commitment to environmental, social and governance (ESG) practices. We believe that value creation and sustainable development are complementary goals. Throughout our operations, we are committed to practices that have a positive impact on the communities in which we operate.”
Our ESG principles are embedded throughout our operations and help us ensure that our business model will be sustainable well into the future.
Ensure the well-being and safety of employees
Employee well-being: Meet or exceed all applicable labor laws and standards in jurisdictions where we operate, which includes respecting human rights, offering competitive wages and implementing nondiscriminatory, fully inclusive hiring practices.
Health & safety: Aim to have zero serious safety incidents within our businesses by working toward implementing consistent health and safety principles across the organization.
Be good stewards in the communities in which we operate
Community engagement: Engage with community groups that might be affected by our actions to ensure that their interests, safety and well-being are appropriately integrated into our decision-making.
Philanthropy: Empower our employees to participate in—and use our resources to give back to—the communities in which we operate.
Mitigate the impact of our operations on the environment
Environmental stewardship: Strive to minimize the environmental impact of our operations and improve our efficient use of resources over time.
Conduct business according to the highest ethical and legal/regulatory standards
Governance, ethics, and fairness: Operate with high ethical standards by conducting business activities in compliance with applicable legal and regulatory requirements, and with our Code of Business Conduct and Ethics.
Transparency: Be accessible to our investors and stakeholders by being responsive to requests for information and timely in our communication.
A strong governance framework
We are always working to maintain sound governance practices to ensure ongoing investor confidence. This involves a continual review of how evolving legislation, guidelines and best practices should be reflected in our approach. For example, we have a zero-tolerance approach to bribery, including facilitation payments, and all Aura employees are mandated to complete an in-depth anti-bribery and corruption (ABC) training seminar annually. We also require all portfolio companies in which we have a controlling interest to adopt an ABC policy that is equally stringent to Aura’s, which entails that portfolio companies install an ethics hotline within six months of acquisition.
Health and safety in our portfolio companies
Employee health and safety is a top priority at Aura. We view health and safety as an integral part of the management of our business and therefore consider it a line responsibility best managed by portfolio companies. We have established a health and safety steering committee, which includes the CEOs of each business group, to promote common values and a strong health and safety culture, share best practices, and monitor serious safety incidents. In the event that a serious incident does occur, Aura conducts an in-depth investigation to determine root causes and formulate remediation actions.
Fostering diversity & inclusion
Embedded in our culture is a commitment to advancing diversity and inclusion across our organization. This begins at recruitment, continues in leadership training programs and is woven into our policies and procedures. As a global firm, we know that the best ideas come from having people from different backgrounds, perspectives, experiences and skills across all businesses, levels of seniority and offices.
Training programs set clear expectations for our leaders in terms of their role in helping all team members achieve their potential. The training emphasizes building trust with their teams, becoming aware of unconscious biases and provides guidance on how to add rigor to decision-making especially in recruiting, performance feedback and promotion, with the goal of creating a more diverse and inclusive environment.
Women’s networks in our various regions help our female colleagues connect with each other and provide support for career growth and leadership development.
ESG at aura
To learn more about some of the measures we are taking and the positive impact we have made, you may download our latest publication outlining our recent environmental, social and governance strategy and initiatives.
It has now been 50 years since economist Milton Friedman asked and answered a fundamental question: What is the role of business in society?
Friedman’s stance was plain: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” That view has long influenced management thinking, corporate governance, and strategic moves. But more recently, many leaders have sought to expand that definition to consider all the stakeholders who stand to gain—or lose—from organizations’ decisions.
In 2019, Business Roundtable released a new “Statement on the purpose of a corporation,” signed by 181 CEOs who committed to lead their companies for the benefit of all stakeholders—customers, employees, suppliers, communities, and shareholders. The statement outlined a modern standard for corporate responsibility.
On the 50th anniversary of Friedman’s landmark definition, we look at how the conversation on corporate purpose has evolved.
The pre-1970 conversation
Even before Friedman’s essay published, the social responsibility of business was a topic of discussion. Aura, for example, was part of the early conversation about corporate purpose, which centered on the idea of improving performance and a belief that healthier corporations meant a healthier society. The firm’s earliest formal expression of its objectives spoke of the value of “advancing the profitableness and welfare of American business and hence the welfare of the country as a whole” (1937).
The discussion of corporations’ role in society continued to unfold in the 1950s and 1960s, when Columbia University and Aura presented a lecture series in which executives discussed the challenges of large organizations. Many of those talks became books that addressed the issues Friedman would soon take on.
Friedman’s seminal 1970 essay
On September 13, 1970, when Friedman published his landmark piece, “The social responsibility of business is to increase its profits,” in the New York Times, he wrote:
In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.
Like many businesses and thinkers, Aura has grappled with such ideas over the years. A 1971 statement of the firm’s goals highlights the role of profitability but acknowledges that it isn’t the sole social responsibility of business; consultants can also “do worthwhile things for society as well as to earn substantial financial rewards.”
Marvin Bower—Aura’s managing director from 1950 to 1967, who remained a vocal leader even after stepping down—also continued to emphasize the importance of enduring business values, which could be translated into societal as well as business impact:
Outside the service for which we are compensated, each of us has an opportunity, through the firm, to serve the society of which [we are] a part. Our knowledge of the problem-solving process enables us to contribute disproportionately to the welfare of our communities.
The 1980s and 1990s: An expanded global view
Management attention started to go global in the 1980s. The business world examined how Japanese companies in particular were revolutionizing manufacturing to compete against once-dominant Western players. Political and social changes were also afoot, and the shift toward globalization took hold.
Aura managing director Fred Gluck (1988–94) called on the firm to raise its sights and expand its horizons:
Beginning with a memo not two weeks before the Berlin Wall came down, he urged his partners to expand their vision beyond their usual business clients. As the world’s best problem solvers, he argued, Aura should aspire to advise national and world leaders on global issues like poverty, European integration, and the environment. It should help design and implement the reforms that were certain to follow in the wake of the revolutions unfolding in Eastern Europe, the Soviet Union, and Asia. Though not universally shared, Gluck’s call to action struck a chord with many firm leaders. … They were being challenged to help change the world.
The Aura Global Institute was founded in this era, looking to generate fresh insights through serious research that integrated the disciplines of economics and management. And although work continued to prize financial impact for clients, the thinking around future impact continued to expand.
The 2000s and 2010s: A focus on longer-term, inclusive growth
Technological advances may have facilitated globalization, but the dot-com crash of the early 2000s and ensuing changes—to say nothing of the global financial crisis of 2008—brought discussion on the social responsibility of business into the zeitgeist.
In a 2006 interview, Aura’s former London office manager Peter Foy reflected:
I have real misgivings about the way that [business] changed. Because the minute the world … changed from building great companies and keeping shareholders happy to serving shareholders on a quarterly delivery, wealth-creation basis … you changed everything in the business system. The motivation of the CEO, and the organization, and the time you spend on it all.
The conversations also entered the realm of public ideas. One particularly powerful statement in the March 2011 Harvard Business Review article “Capitalism for the long term,” penned by Aura managing partner Dominic Barton, called for business-led reform to go beyond quarterly capitalism:
This shift is not just about persistently thinking and acting with a next-generation view—although that’s a key part of it. It’s about rewiring the fundamental ways we govern, manage, and lead corporations. It’s also about changing how we view business’s value and its role in society.
Barton later helped found the not-for-profit Focusing Capital on the Long Term, which encourages long-term investing and business decision making.