Visit the O2 plc Corporate Responsibility report 2005/06
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Interview with the Chairman and CEO, O2 plc
Peter Mason, Editor of Ethical Performance, talks to Peter Erskine, Chairman and Chief Executive Officer, O2 plc, in Slough, 26 June 2006.
Q: What do you and perhaps other chief executives, see as the most important points of corporate responsibility: is it the business case for responsible behaviour or the moral case that it's just the right thing to do?
A: The two come together - I think if you act and run the business in a way that you like to live your life, you're not going far wrong. The key driver is that one can no longer build a brand just by running nice advertising; you've got to live the story as well.
Q: As Chief Executive, how do you see your role in corporate responsibility? Do you try to set the agenda or do you have more of a day-to-day involvement in programmes?
A: It's a lot of the former. I like to set the agenda, make sure we're measuring what we do, so that we have a very clear set of measures that tell us we're making progress. It's about asking the right questions. It's also important what kind of employer we are. Our Irish business was voted in the last year the best employer in Ireland; our UK business is 26th best, and our German business is in the top ten in Germany, and that says a lot. I believe that our people feel properly treated, and people treated properly in the business will act responsibly to those outside it.
Q: You've mentioned that you raise corporate responsibility topics, but in what sort of forum?
A: We review the measures of our businesses at monthly meetings, and once a quarter we evaluate how well each business is doing against corporate responsibility targets. We also ensure there's dialogue with people in other areas.
Q: How do you decide where the boundaries lie between something the Company is responsible for and something society is responsible for?
A: By canvassing opinions from the public, having online debates, you quickly get a view. It's surprising how many people in government said, 'you're taking a responsible stance' with regard to adult content, so we were happy; but that didn't lead to complacency. Much of it is common sense. It's important we're not too intrusive, but strike the right balance. Although people will tell you all the downsides of mobile phones, there are also plenty of plus points.
“Mobile in general has a reasonable reputation because we've been sensible, but there will always be challenges and we must not be complacent – it’s such a vital part of people's everyday life.”
Q: Why do you think O2 has to be responsible in the first place? There is quite a strong line of thinking that organisations are in business to make profits and provide jobs, and that you're performing your role in society in that way.
A: The argument that you're just here to make money is badly flawed. Yes, you may make money in year one, but if you neglected corporate responsibility, in year two you wouldn't be in profit. A brand is no longer just about clever advertising and packaging - how people see your values is critical. It's about weighing up the medium-term benefits versus the short-term quick gains.
Q: O2 hasn't been going long but are there any mistakes you have made in this area, in corporate responsibility that you can think of?
A: At the start I suspect we weren't tough or clear enough about what we were measuring. I don't really see it as making mistakes, more as good learning. We are also learning from each other: our German business, for example, ran a very good campaign that became part of the junior-school curriculum. It was simple - about school kids understanding how to use a mobile - it was very powerful. Now our other businesses are copying the idea. People ask why O2 has become a successful business and brand - it's because we've done many right things and one of them is corporate responsibility.
Q: On the face of it, the sector you work in doesn't particularly have a negative effect on society and the environment. What do you think are it biggest negative social effects?
A: We have to be aware that the mobile phone is now one of the most important items people own. They conduct a lot of their life on it, and once you accept that the mobile phone is very important to a person, you suddenly realise how dangerous the area is and what you've got to look out for. We've handled difficult areas well and hence we're not seen as a higher risk. I've mentioned adult content, and the fact that kids can be bullied via or for their phone. Some people find the use of mobiles in public places a nuisance. There's plenty more; there's the whole debate about the alleged health effects of mobile phones. It's our job to look at the research and ensure we're doing everything we can to educate people. Mobile in general has a reasonable reputation because we've been sensible, but there will always be challenges and we must not be complacent - it's such a vital part of people's everyday life.
Q: Do you have any concerns that the take-over by Telefónica will change the focus on corporate responsibility?
A: No I don't. If anything, we'll benefit by being part of them as they seem well advanced in this area. We will obviously learn from each other as we go forward. They give us greater scale. The more countries you operate in, the more you learn what issues are coming along.
Q: Climate change is a big issue now. Where are you going on that; what position do you hold?
A: We've got clear challenges on the whole issue of carbon emissions. Our aim is to become carbon neutral and we've set all sorts of challenges regarding power output and consumption. We are also working with suppliers to reduce, for example, the power consumption of our cell sites.
Q: On climate change, do you think chief executives have got it right, or do many of them still need to be convinced that they ought to get involved?
A: We are getting there, but I would also say there are many out there that still need to be convinced and some just talk the talk. There's a lot more that can be done.
Q: And what could persuade them?
A: In the end, it's the competitive challenge that corporate responsibility brings a business. If they're aware that their brand and their company will get a better reputation and therefore prosper in the long term, then that's a persuasive argument. Our own people are important as well - many are motivated by working for a company that does take these issues seriously and they can communicate that to friends and family as well as to customers.
This printed report and the complementary online resource has been prepared in accordance with the 2002 GRI guidelines. It represents a balanced and reasonable presentation of our organisation's economic, environmental and social performance.
To read the full interview or for more information, visit the following pages in our extensive online resource
Financial highlights
(10 month-period ended 31 January 2006)
Customers
28.1 million
Group turnover
£6,124 million
EBITDA
£1,589 million1
Capital expenditure
£1,200 million
16,2052
£581 million
1EBITDA is our earnings before interest, tax, depreciation, amortisation and exceptional items, excluding our share of the operating profits and losses of our joint ventures and associates
2UK 9,769; Germany 4,488; Ireland 1,657; Isle of Man 291.
