Stakeholders and shared value in MAG’s model

The corporate social responsibility system underpinning MAG’s entrepreneurial structure encompasses all the requirements to present and communicate the multi-dimensional nature of the business model.

MAG’s story has been called aspirational as, commensurate with its size, it has always been a factor central to its corporate identity.

It is undoubtedly unusual as companies or groups of MAG’s size seldom develop a system to communicate its values as well as its strategies on a voluntary basis.

In practical terms, we have told of how MAG drew inspiration from the various codes of conduct, pursuing consistency – also with the relevant historic context – in the selection of goals and initiatives and following a list of priorities set on an ongoing basis.

As regards the present period in time, it is worth keeping in mind that not all reporting periods have enabled initiatives to progress smoothly. A case in point is the project to align with the regulations contained in Law no. 262/2005, which continues to this day.

In terms of the priorities, there were times when the level of formalisation set the pace, sometimes in response to more pressing needs, such that some aspects of the implementation process are still incomplete.

The objectives achieved are those of an adequate level of corporate governance and a satisfactory level of integration between all the legislative and internal rules, relationships, processes and company systems through which it exercises business control, clearly outlining the structure of responsibilities that guides the achievement of objectives.

This system is primarily designed for the pursuit of excellence in business organisation as conceived of by Mintzberg¹, of an organisation designed to adhocratically respond to specific needs and objectives, including beyond the planned strategy with a component of negotiation which reveals an entity’s transversal expertise over the long term.

Therefore the goal of safeguarding the soundness of company assets relates not only to investment policy but also the assumptions of long-term recoverability via adequate profit levels and maintaining a balance between sources and applications. This is achieved through the internal control system but earlier still via robust company processes, transparency in the execution of functions, professionalism and ethical conduct.

The business strategy thus merges with a system of values that MAG interprets in shaping its

1. representation mechanisms,
2. guarantee institutions,
3. independence requirements,
4. reporting tools,
5. how the governance bodies work.

In this context MAG has over time made its choices and implemented measures designed to achieve the greatest possible level of effectiveness and transparency. The relevant sections of this report provide information on these aspects, which are independent of the governance model adopted.

The stakeholder paradigm expresses that each stakeholder contributes a competitive edge to MAG’s value system, because of and commensurate with their investment, be it tangible or intangible. The model for the pursuit of its performance objectives is a driver of the creation of shared value.

As regards integration – which has always been key in MAG’s business model both in its original technical/productive sense and in its later iteration expressing the transversality and interdependence of stakeholders and values – this year we will delve into the issue of diversity of gender, ethnicity and culture, which has always been a source of enrichment.

The model of shared value as conceived by Porter² is based on a value creation system in which each stakeholder is essential to the organisation reaching its full potential but also for the identification of risks to be mitigated by the management system.

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1. Henry Mintzberg, “La progettazione dell’organizzazione aziendale”, Il Mulino, Bologna, 1996. ↩

2. Michael E. Porter, Mark R. Kramer, “Creating Shared Value”, Harvard Business Review, January-February 2011 issue. ↩