Barrie Hensby column

Oct 3 2007 by Iain Laing, The Journal

WHEN I arrived in the North-East in 1991 to establish NEL as a venture capital company, we wouldn’t have got off the ground without the support of the region’s “great and the good” – both people and companies.

A sense of community brought together 22 investors into the First HSBC Enterprise Fund for the North-East, nearly all of which were from within the region.

These included the major companies in the region at the time, but also the local authority pension funds – and in comparison with other regions, the next largest fund (yes, the North-East was the largest fund despite being the smallest region) raised its capital from only five investors.

One of our investors was Northern Rock which went on to invest in two more of the funds we manage.

Their approach must be a prime example of effective corporate social responsibility policies in action. Northern Rock invests heavily in the local/regional community through its charitable foundation and sponsorship activity, and it’s therefore not surprising to see the community responding in turn with support for the Rock in its hour of need.

I’m sad to say that, in my 16 years here, this sense of community has diminished significantly, and unlike Northern Rock, a number of the major companies with regional roots have lost their ties to the North-East.

Companies such as Northern Electric and Vaux leap immediately to mind – and there are, perhaps more worryingly, others that appear to not appreciate the need for a sense of community at all. The attitude among the latter group seems to be that “we are an international company that just happens to have its head office in the North-East, and hence relatively few of our employees are in the region.”

From this perspective, there doesn’t seem to be any need to invest in the local community – but there are countless reasons why they should be doing so. For starters, such companies, like all others, need a good supply of local talent for its headquarters, both from within the local community and from outside, to remain competitive.

One way of attracting and retaining such talent is through the quality of life that this region offers.

Investment is needed to support the vibrant and enthusiastic local communities from which businesses draw both their employees and their customer base, so there is a clear rationale for these firms to be active members of the community.

The best companies give as much, if not more, to the communities in which they operate than they take from them.

Barrie Hensby is chief executive at fund management firm NEL.