It’s been rare in my long tenure as an honorary diplomat that three of my principle interests: business ethics, Sweden and the welfare/positive future of young people have come together. The start of the new decade feels very different and is very different because that braiding has happened and seems set to gather pace and impact. This is in no small part due to Greta Thurnberg (I’m the Swedish honorary consul for the north east and Cumbria) who’s focused the public mind on safeguarding the planet for future generations, but also because the lions of British and American business are beginning to agree that ‘capitalism is dead’ long live capitalism, but NOT as its been since the 1970s. Business leaders are looking for a new economic model that looks after everyone, not just the few.
David Grayson, CBE, chair of the Institute of Business Ethics and emiritous professor for corporate responsibility at Cranfield, put his finger on it in his excellent blog: ‘Larry Fink, the FT and Prince Charles are right: it’s time for a re-set on capitalism.’ He quoted Mr Fink, founder and CEO of Blackrock, the world’s largest institutional investor with £7bn under management and I’ll do the same: ‘ To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all their stakeholders, including shareholders, employees, customers, and the communities in which they operate.’
This is a statement with which David, all the board members of NIBE (and thanks to the efforts of individuals like Larry Fink and Paul Polman, former CEO of Unilever) a growing number of business heavy hitters would agree wholeheartedly. At last influential business people from around the globe are coming to the ‘stakeholder’ table. The US Business Roundtable, America’s most influential business lobby group, announced this year that it would formally embrace stakeholder capitalism and the doughty World Economic Forum has produced a second ‘Davos Manifesto’ to emphasise the virtues of stakeholder business models with new metrics and reporting structures.
All this has to be good news, but from a small business perspective it might be tempting to think that business with a purpose as well as a profit motive applies merely to Corporations. I, like 93.3% of UK business owners, know just how hard it is, particularly in at time of BREXIT uncertainty, to focus on the job of wealth and worth creation, creating and safe-guarding jobs. What’s in it for us small company owners (in business terms) to be as clear about our values and purpose as we are about the need for a profit margin?
In our experience at FIRST there is no doubt that ‘doing the right thing for the right reason’, which includes focusing on staff welfare and development, paying suppliers on time and doing what we say we’ll do, is reaping tangible business benefits. Our job as directors at NIBE is to clarify what those benefits are more generally and come up with metrics that square the cost/reward/effort circle for businesses large and small throughout the north east region. If we can do that we will have the beginnings of a movement that will make the north east known as a place where good business is done, in every sense, and with the increasing focus on the importance of stakeholder business models globally perhaps even make a contribution to increasing the lowest business density region in England. You can get involved now by pledging a small contribution to join our £100 Club and show (through publicity on our website and through our social media channels) that you believe in a values-driven as well profit-focused business community in north east England.
This new decade really does promise a new business dimension, but we all need to take action if promise turns into reality to benefit our businesses, our customers, our communities, our children and our children’s children.