Brett Tromp, Discovery Health: reporting on health should be compulsory
Besides financial, social and environmental data, integrated reports should include data on the health and wellness of staff, argues Brett Tromp, CFO of Discovery Health. We asked him what his ‘fourth bottom line’ means and why CFOs should care about health in the first place.
What is the fourth bottom line?
"Currently there are three reporting lines: financial, environmental and social. The fourth bottom line brings health and wellness into the reporting."
Why should companies worry about health and wellness?
"The Oxford Health Alliance in the UK has shown that five behaviours cause five chronic conditions that are responsible for 75 percent of deaths in the world. Smoking, an inactive lifestyle and poor nutrition all raise the risk of cancer, heart and lung diseases and diabetes. Communicative diseases are not the leading cause of deaths, but diseases of lifestyle are. You can choose to stop smoking, change your bad eating habits and walk around the block every day and dramatically enhance your life expectancy and health."
"We have lots of case studies linking health and wellness to productivity. Absenteeism costs the SA economy around R16 billion a year. So we need to ask ourselves: where do people spend a significant portion of their time? They spend most of their time at work. That means companies should have a real interest in addressing the health and wellbeing of their people, as an unhealthy workforce is not nearly as productive as a healthy workforce the studies show."
You introduced the concept and are its biggest ambassador. Why should other CFOs care?
"When people are healthier their productivity improves and absenteeism is reduced. It affects the financial bottom line. As CFOs we also need to be concerned about society. Having a healthier workforce takes the pressure of the state and improves the lives of all citizens. I believe investors will also be very interested in health as a measure of productivity as our studies show companies that have driven wellness initiatives in their business have better long term share price performance as it creates a competitive advantage through sustainability in their businesses."
What health measure should companies include in their integrated report?
"We have an institute in the United States called The Vitality Institute that has started a working group of business leaders, academics and health professionals to come up with comprehensive health metrics. They have made good progress and should be done before the end of this year. It really is starting to come together"
"In the meantime we can start with a generic approach. Is there a gym for the staff? Does the company offer healthy food? Does the company offer a wellness day experience for its staff. Later we'll aim to include harder measures such as the percentage of smokers and change in this etc , the key is that these metrics must compare across different companies and be non discriminatory"
Is anybody already reporting on health?
"No, I don't think so, currently mainstream health reporting has mostly been in the form of reporting on issues related to occupational health and safety. Currently integrated reporting does not include workforce health metrics. It is nice to be leading the pack from the southern tip of Africa. This is where the thought leadership is coming from, which is great for South Africa. There will some measures in Discovery's integrated report in September/October, which means we'll be the first."
What has the response been?
"The positive support from other CFOs has been overwhelming to say the least. The press has been very complimentary. Gibbs University has already asked us to do a course with them a few prominent CFOs. SAICA has been positive, the JSE has been positive and the Minister of Health is very positive." Everyone understands this is the right thing to do for our society and country. "Most inspiring is that the 15 Health ministers in the SADC region have all endorsed the 4th bottom line to be rolled out in their respective countries"
Should reporting on the fourth bottom line be compulsory?
"It would be great if there were some early adopters. Health minister Aaron Motsoaledi has already said that this is the right thing to do. He has created a taskforce to ensure the 4th bottom line reporting amongst his other objectives are rolled out in SA and wants the government to start reporting on health. Personally, I would like it to be legislated by the end of 2016."
If employers and employees benefit, how does Discovery benefit?
"We believe our corporate wellness program has significant impact on our members and our corporates we serve. If companies start to take the fourth bottom line seriously the demand for these programs will grow. Our world class wellness offering can do 15 tests in 12 minutes at the client's premise, so employees won't be away from their desks for very long. Besides these programs securing long term shareholder value for us, the fourth bottom line also links to our core purpose: of making people healthier."
What effect do you think the reporting will have on HR management?
"I expect a spring of fresh ideas. Traditionally we sell wellness to the CEO and HR, but now the CFO must get involved. HR departments will need to come up with creative ideas and companies start competing on their wellness offerings in their employee value proposition to attract talent to their workforce."
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