Refreshing the business contract with society
By Adam Woodhall
“Can business refresh its contract with society before it’s too late?” was the stimulating question with which the CEO of The Crowd, Jim Woods, opened the recent “Broken Society” event. This provocation was followed up by the chair for the event, Michael Skapinker, a columnist for the FT, who suggested that today, people mainly talk to like-minded people on social media. His question was how to get past the divide and start to listen to each other?
We started the event by listening to the keynote, Helena Morrissey, who burst some stereotypes. She is gentle speaking and measured, daughter of teachers, comprehensive educated, married to an artist and a Buddhist, mother of nine children, who in addition to running a global investment management firm for 15 years, is striving for equality in the boardroom and is chairperson of the corporate board of the Royal Academy of Arts. At the start of her talk she took David Cameron to task for focusing on law and order in response to the 2011 English riots and not considering the complex and wide ranging factors.
The assembled crowd therefore probably wasn't expecting her to be an enthusiastic Brexiteer. But she is.
The intake of breath amongst the attendees was almost audible when Morrissey revealed this in her speech; when polled pre-referendum, 86% of The Crowd were pro-Remain. Reflecting on the explanations for the anger that contributed to the vote to leave the EU, Morrissey offered that group think which contributed to “exclusion of different views around the EU” is the same as that which caused the financial crises. This has led to huge anger that those accountable for financial crisis were still in charge afterward the crash, and it is her view that they are also those that are supporting the EU.
However much of a bombshell her Brexit stance was, Morrissey’s address was much broader than her views on Europe. She advocated that our leaders must stop being incremental and consider radical and nuanced solutions, and think consciously of new possibilities. The event was held on the eve of the US election—appropriate timing for her advocacy of engagement with populist movements rather than pushing them away, and for leaders to move from force to empathy.
Celebrating and encouraging gender diversity was the main tangible guidance on how business can refresh its contract with society and help bridge the divide. Morrissey observed that: “Duality is deeply engraved in each of us” which leads to a desire to see the ‘other’. She put the case that if we see one half as inferior, then there will be inevitable confrontation. Building understanding through diversity was key, as represented by her chairing the 30% Club and BITC Gender campaigns. She suggested this would also lead to better outcomes, as on average women are more empathetic and systematic.
True disagreement is not often heard at The Crowd, as reported by this correspondent in previous coverage. Morrissey’s support of Leave bucked that trend, leading to less than warm words when the panel discussed the subject. Stephen Kinnock, a Labour MP and an ex-director at the World Economic Forum and sustainability consultancy Xynteo, observed that Morrissey’s suggestion “that the EU is a ‘poverty machine’ is absurd”.
‘The economy’ vs ‘my economy’
Kinnock’s synopsis of a key driver behind the Leave vote and other indicators of a broken society was inequality. “There is a massive difference between ‘the economy’ and ‘my economy’. My economy hasn't improved… with U.K. wages having stagnated since 2007, the longest period since the industrial revolution” he commented. This inequality was highlighted by the third panelist, Dr. Wanda Wyporska of The Equality Trust, who observed that the lowest paid in a business earn one-third of 1% of salary of a CEO on £6M a year.
Business could refresh its contract with society by building companies of purpose rather than focusing on quarterly capitalism suggested Kinnock—this is something the government should help with. Furthermore, he opined that the OECD average spend on R&D is 3% of GDP, but the UK’s is 1.7%. This needs to increase, he demanded, with a focus on clean tech and green economy.
Attendee Sue Riddlestone, CEO of Bioregional, summarised neatly on Twitter the three key positive proposals that Kinnock offered as being: 1. reform of the Companies Act to require a corporate purpose of people, planet and profit; 2. proportional representation so that all votes count; and 3. trade unions to be more empowered by collective bargaining, as the UK only has 30% of its workers covered by this practice, as compared to the EU average of 60%.
On a pro-active forward looking note, the fourth panellist, Antoni Ballabriga, the Global Head Responsible Business at the Spanish bank BBVA, gave encouragement on how to refresh our contract with society: by listening better and asking ourselves, “As a CSR practitioner, how can we engage better” to refresh businesses contract with society?
Listening to these speakers certainly gave everybody a lot to consider as we went out into the refreshing London evening.