Leadership isn't demonstrated only in financial terms. Who is ahead of the pack with regard to factors like innovation, compliance and human rights?
How do you determine today’s energy leaders in such a complex business environment? It requires a new view of companies, looking at them holistically across critical components of 21st century corporate operations.
Look at, as an example, corruption. It’s a business challenge to manage and protect against in such a global, highly regulated and technologically advanced world.
News headlines feature Saudi Arabia’s recent crackdown on corruption that resulted in the arrest of numerous Saudis, including Prince Alwaleed bin Talal, and the freezing of bank accounts of more than 1,200 individuals. The ultimate impact of the move by Saudi Crown Prince Mohammed bin Salman is still to be known but the potential ramifications are significant.
Another case in point is the bribery scandal that shook France’s energy giant, Alstom, before it was acquired by GE. The company was charged with international bribery under the Foreign Corrupt Practices Act and was sentenced to pay a $772.3 million criminal fine, the largest levied in a foreign bribery case at that time, as a result of executives paying more than $75 million in bribes to government officials via a network of third-party consultants.
The new face of leadership
These examples reflect the complexity facing today’s business leaders. Not only must they manage the financial and operational responsibilities of running a business, but they also must insulate their companies against supply chain risk, oversee a network of third-party partners oftentimes unbeknownst to them, adhere to government and tax regulations across numerous jurisdictions, and manage social and media sentiment, among many other responsibilities.
Defining and determining today’s industry leaders is a challenging, yet imperative, task. Leadership is not just reflected on a financial statement, it extends across and throughout the whole of an organization.
Answering the question with data
The Thomson Reuters Innovation Lab created a data-centric methodology to objectively determine companies at the forefront of their sector – in this case, energy.
Taking a holistic view of organizations through the lenses of financial, operational, regulatory and technological prowess, the Lab developed an algorithm that measures leadership across eight pillars of performance: Financial, Management and Investor Confidence, Risk and Resilience, Legal Compliance, Innovation, People and Social Responsibility, Environmental Impact, and Reputation. This data-driven approach scores companies across each area such that those with the highest cumulative scores are the leaders.
“We took an approach that analyzes a company based on financials, legal actions, resilience, innovative capability and environmental impact,” said Amit Shavit, a data scientist at the Boston Lab. “It captures all integral parts of what it means to be successful and a leader in an industry.”
View the list of the Thomson Reuters 2017 Top 100 Global Energy Leaders.
Gain greater insights into energy industry leadership and the performance of the Thomson Reuters Top 100 Global Energy Leaders by downloading the thought leadership report.