In the post-financial crisis business environment companies are under pressure to demonstrate their social purpose as never before. The concept of “public value” can be of real help in clarifying and communicating that purpose and enhancing corporate reputation.
Last week we learnt that, despite “Project Merlin”, bank lending to small and medium sized enterprises fell short of expectations by some £2bn in the first quarter of this year, only adding to fears that we are set for a sluggish recovery. This together with the news that the Chief Executives of both Barclays and HSBC have been awarded £9m in pay apiece will have done little to assuage public anger over bankers’ behaviour. What is so strange in all this is that the banks are apparently oblivious both to the public mood and to what seems to be the makings of an emerging consensus amongst politicians and policy makers that business must urgently rediscover its social purpose. Suffice it to say that when as luminous a business luminary as Harvard Business School’s Michael Porter argues that capitalism is facing a crisis of legitimacy you know that something is up.