00:00So my name is Mark James Lumsden-Taylor and I'm from MHA Baker Tilly Lead UK member.
00:14Okay, so Mark we're here at Made in the UK. MHA are our sponsor for this whole event. Why
00:24is it so important for you to be involved in this? Well my role is in sustainability
00:29and environmental social governance and also to a certain extent an internal audit so that's
00:33looking at controls and processes and improving businesses in effect. Made in the UK is a fundamental
00:39component of bringing SME business and manufacturers together and we as MHA were built on auditing
00:48and working with SMEs. We've grown and grown and grown over the years to be recently listed
00:54but that doesn't change the fact that our roots and our core relationships are with businesses
00:59like this that you actually support. And I think Made in the UK is a fundamental component
01:04of bringing them together which means we can then talk to them and learn from their experiences
01:08and that then improves our services to business. And there's such a diversity of business isn't
01:12there? I mean there's heavy engineering, there's car companies, there's gin distilleries. I mean
01:17you know manufacturing is a very very broad church isn't it? But a lot of common struggles
01:23I would say. Absolutely. I mean manufacturing means different things to different people right? So when people think
01:27the food manufacturer they often think heavy components, heavy engineering, you know perhaps
01:32made me saw now like digital services is kind of linked in there as well. I'm actually spent a lot of time in the food space
01:38so food manufacture is a huge part of the manufacturing narrative if you like. And I think what's
01:45what's important is having the debate with those different businesses and there are common themes. Cash is common theme.
01:52The way in which they're dealing with supply chain demands. Common theme. The way they're dealing with the customers,
01:58customers, customers, demands. And with the rise of globalization, businesses expectation of businesses keeps going up.
02:08Irrespective of what the political statements and narrative around that is at the minute, businesses expect more from
02:13businesses which puts pressure on SMEs. And you can be a £20 million business with 200 staff, the pressures are broadly the same as a £5 million business with 50. It's broadly the same.
02:23And for the person running the business who we often speak to, you know it's nice to have that network of peers I suppose as well isn't it?
02:32Definitely. And I'm a bit unique as someone that works in professional services, professional practice. So I ran my own organization for 15 years and I built it from 75 staff to 1400.
02:44So I know what it's like on a Friday night about whether or not you're going to make payroll. I know what it's like when you get up on Saturday morning and you're actually thinking about all the things you need to do on Monday and actually then in those days you'd go back to the office and open up your computer.
02:58Your computer. You wouldn't have a laptop or only very recent in that world. You're thinking about it 24-7 and sharing those experiences and the narrative that we had with our round table was we talked very corporately around environmental social governance and what they do and everything else.
03:15And then it developed actually into the social construct of why they're doing it. Is it a family legacy? So there's the pressure around the family's family to maintain it.
03:23Is it a business that's been around for 50 years? Is it going to survive for another 50? Who is he or she going to hand it on to?
03:30Or right the way through to you know what I have no life because I'm spending 24-7 building my business. I've got five people in it and I'm going to make it a success.
03:38Yeah.
03:39But I have no life.
03:40No sharing and I think there's it actually took ironically we had almost like a bit of a therapy session towards the end I think.
03:45Just sharing those experiences and the fact that you're not alone in it and many of those struggles and issues whether it's something just simply going to that next level.
03:57There's growing spurts between a 5 million pound to a 10. 10 to a 20 less of it. The 20 to the 50 is game-changing and I've experienced it.
04:06And the way in which a business is run, its systems, its controls, its processes, more often than not they won't be experienced in that.
04:14And I suppose keeping the culture as you grow as well.
04:18Family was talked about a lot and a colleague on our table said you know when it was 100 I knew everybody's name.
04:25At 195 I probably doesn't anymore.
04:28It was the same for me. I knew every single person in the group when we had 120 staff.
04:33When we rose to 200, 300, 300, some people would leave the business, join and leave and I've never known them.
04:40Yeah.
04:40And that's quite a hard mental thing to deal with and we were saying you take every resignation in the early days personally.
04:48Why are you leaving us? What is wrong with my company?
04:51And then you almost get hardened to it to realise that it is churn, it is life and not everybody, like the entrepreneurs in this room,
04:59not everybody is prepared to put their heart, their soul and their life into doing something that ultimately will make a difference.
05:07And we talked about are you there for the money or are you there for making a difference?
05:10And actually the two almost become interchangeable because you do need to make money.
05:14But a lot of them, particularly the sustainability businesses, are very altruistic and actually they want to make a difference to society.
05:21That's very laudable.
05:22And I suppose the topic of your roundtable was ESG.
05:26And when you say ESG, people immediately start thinking about, oh, it's recycling, it's fuels, all of this kind of thing.
05:33But that social side is huge, isn't it?
05:37And also just the sustainability of your business, looking after and retaining your people.
05:42It is. And I think, unfortunately, people use the term sustainability, ESG, net zero, carbon neutral or carbon positive, all interchangeably.
05:54Ultimately, sustainability is defined very clearly.
05:571989, Brooklyn definition is whatever you take out of the world, you need to put back to ensure that the next generation of people are not disadvantaged.
06:05That's sustainability. Full stop. End of.
06:08ESG is a reporting framework by which your business should be developing towards.
06:12And I think more often than not, people deal with the E because it's easier.
06:17I know E for easy.
06:19You know, it's OK, let's look at our CO2 emissions.
06:23What can we do? Put green LEDs on, put solar panels on, blah, blah, blah, all of that stuff.
06:26Maybe look at electricity, which incidentally isn't sustainable long term.
06:29But the societal and the governance aspects of the way in which your business is run is becoming increasingly important.
06:36And the chap on our table said, you know, his retention rate, sorry, his loss rate of staff is 2%.
06:41I couldn't believe it. I said, you recalculate it.
06:45That's incredible.
06:47But they're very much a family, where their location is.
06:50They're very much a family orientated business.
06:52People are generationally there.
06:54They're invested in the company.
06:55Yeah, they're mentally invested in the company.
06:57But it's not the same in London.
06:59People turn over all the time.
07:01So your societal credentials are more important than ever.
07:04And I think that's also something that came out of today.
07:06And it's also just as important as the E.
07:08At MH, we split it.
07:11So I have a colleague that's involved that heads up E.
07:13I actually head up the societal piece.
07:15That's also part of my background in education.
07:17And then I've got another colleague, sets up G, which actually is the responsibility as the board.
07:22Right, OK.
07:23So we split R's.
07:24And we also have another E, economic.
07:27Of course, yeah.
07:27So we call it E squared because economic and environmental are mutually inclusive.
07:32You're not going to do something environmentally if it's going to materially impact your economic viability.
07:38No, of course not.
07:38You take a calculated risk, right?
07:41So saving the world comes at a price.
07:43It's getting that balance, isn't it?
07:46People, planet and profit.
07:48Well, yeah.
07:48Or the triple bottom line, if you want to call it, whatever you want to call it.
07:51And I think for sustainability and the role of sustainability within businesses, and I said this at the end of ours.
07:58I said, for goodness sake, be clear about your definition of what your interpretation of sustainability is, point one.
08:05And then point two is look at where you want to be on the ESG journey.
08:10Because some businesses who are miners or oil and gas, huge exploration or drilling or whatever, will never be environmentally sustainable.
08:22So you play that narrative out, but it could be investing in sustainable companies.
08:27And it's the transparency around what they do.
08:30And that's part of my big job.
08:32Not greenwashing.
08:33We are members of the UNGC, and we're quite a senior member in that.
08:39And we work closely with them about calling out some of those big majors.
08:42Go, well, you can't report that.
08:44That's not appropriate.
08:47And I think the role of advisors and accountants, we are custodians of truth and fairness, ultimately, aren't we?
08:54And we have to provide that independent challenge and independent narrative to companies, big or small, to make sure they do things properly.
09:03And if they're not doing it right, they should be called out.
