Talking – the first step to making business work for all
Our CEO Amanda Powell-Smith wonders – what would the world look like if the vast majority of businesses focused on being a force for good as well as generating profits?
We might soon find out if the current appetite and interest in mission-led business blossoms into something more substantial. With the many and various body blows to both society and economy that have racked up since the financial crisis in 2008, it is no surprise that employers are exploring – and employees increasingly expecting – a different way to do business.
After several months of being part of Steering Group discussion and debate, it was great to see the Centre for Social Justice report Everyone’s Business: Making Business Work for All being launched earlier this month.
It is the latest in a series of publications, including the recent government-sponsored mission-led business review and the Green Paper on Corporate Governance Reform, pushing the agenda for business purpose beyond profit.
The CSJ report makes 22 recommendations to help businesses to generate meaningful value for themselves, their stakeholders and broader society. These range from strengthening existing legislation (such as section 172 of the Companies Act to put shareholder and stakeholder interests on a par) to building transparency (such as creating a standardised reporting system for social and environment impacts) to incentivising behaviour (such as using taxing at different rates according to impacts made). But any legislation that results must be used to encourage and enable business participation, not create a new regulatory stick.
At the centre of the whole report is the critical need for every business owner, manager and employee to recognise, realise and ultimately feel proud of their ability to make a real, positive difference to society. What they do and how they do it will depend on a multiple of circumstances within their business and there are brilliant examples of action from organisations across the country. These stories need telling internally and externally.
Creating this culture of change is summed up by the first recommendation in the CSJ report, which simply says: “Government must make a purpose declaration a requirement of incorporation to signal its belief that the role of business extends beyond profit maximisation”.
Contrary to the often cynical view of the motives of private business held by many and expressed in the media, we believe most business leaders want their businesses to be a force for good, especially the younger generation. In our Business to Society Report from December last year, we found that business leaders who are aged under 35 years want to do more to help society, particularly around reducing obesity and tackling homelessness.
One of the brakes on them doing so is the cultural and financial imperative to place monetary profit above all other considerations. However, that ignores the growing evidence that mission-led businesses can make a positive difference and maintain or increase bottom line results. Anyone still advocating the one-eyed focus on profit at all costs looks more and more out of touch and lacking in business acumen as time passes. Smart business leaders, such as Paul Polman at Unilever, know the future prosperity of their companies lies in delivery of products and services with a clear social purpose.
Leadership is key for driving this change and the increasing endorsement and permission of government and financial investors for business leaders to adopt a mission-led business approach, should help to create action. But leadership alone is not enough; we need to aim for each employee to become an advocate and ambassador for what their employer is doing to help society.
Real change will happen when conversations move from corridors in Parliament to canteens and coffee points in the companies themselves. The easiest first step is for everyone to start talking about the role that they and their company are playing in their community. Words can and must drive action, and in 2017 the employee voice will count more than ever before.