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Case study: Leonardo transforms its corporate governance with integrated thinking

Posted 22 April, 2021

The <IR> Business Network’s Integrated Thinking & Strategy Group publishes its latest case study on integrated thinking in action from Leonardo.

Leonardo is a leading aerospace, defence and security technology company. Headquartered in Italy, the organisation has over 49,000 employees and a significant industrial presence in Italy, the United Kingdom, the United States and Poland.

Integrated thinking has supported Leonardo in realizing the interconnectivity of financial and non-financial aspects of the business to improve sustainability. It has been key to developing Leonardo’s holistic understanding of its business and delivering on its purpose: to ‘Contribute to the world’s progress and safety by delivering meaningful and innovative technological solutions.’

Given the importance of setting the right tone from the top, in 2016 Leonardo transformed its corporate governance model. The organisation placed a greater emphasis on sustainability issues, with specific tasks assigned to a board-level sustainability and innovation committee, and strengthened the dialogue at management level with the commitment of the Group Management Committee.

The initial tasks of the committees were to link business and sustainability strategies to how the organisation creates value, by establishing how each process fits into and impacts upon the broad range of capitals the organisation uses and affects.

Leonardo developed its Strategic Plan and its 2030 Vision with the help of integrated thinking, to enable the business to plan for the next ten years with clear guidelines, and aid its resilience in challenging times.

The Group Management Committee, made up of the CEO and high-level executives, ensures the strategy is embedded in all the departments and divisions to develop a well-rounded and shared corporate vision. The company has invested heavily in its data collection system to foster the integration of multiple capitals.

The commitment of the entire management team to the value creation model is also ensured by linking part of their short-term variable remuneration to the achievement of environmental, social and governance (ESG) targets and, specifically, to the company’s inclusion in the Dow Jones Sustainability Indices (DJSI). Leonardo was recognised as an industry leader in the Aerospace & Defence sector by the DJSI in both 2019 and 2020.

Read the case study in full and find out more about Leonardo’s motivations, approach and success in achieving its purpose.

The <IR> Business Network’s Integrated Thinking & Strategy Group series of case studies examine how integrated thinking has been embedded within international organisations from diverse sectors. The interviews conducted with key stakeholders identifies each organisation’s motivations, how integrated thinking has helped shape and deploy the organisation’s strategy, and what the benefits have been.