Two questions and a good answer: a simple proposal for an ethical renewal of business

By Mark Wakefield

Rodin's 'The Thinker'
Thinking about why as well as how.

You’d think that the more protracted the after-effects of the 2008 financial crisis become the more willing we would be to ask searching questions about its root causes. Sadly, this seems not to be so. In much public discourse, there is an often unspoken assumption that if only we could sort out the banks, fix the Euro and correct global trading imbalances we could all happily return to the days of uninterrupted growth.

It’s therefore welcome to find – in the shape of Will Morris, current chairman of the CBI’s taxation policy committee and Global Director of Tax Policy at GE – one senior business figure who acknowledges that things have gone wrong at a pretty fundamental level. And it’s even more welcome that he’s come up with a solution that is both simple and elegant. Sadly, his paper Not Just How but Why – which was published by Reform earlier this summer – has received precious little attention, which rather underlines my point.

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Assessing the social value of universities

By Mark Wakefield

Loughborough University Library
Loughborough University Library

Anyone interested in the future of higher education would do well to read the NCCPE’s recent report on the social value of universities. Paul Manners, the NCCPE’s Director, sets the context for the report when he quotes research for Universities UK in 2010 which suggested that less than one in five people in the UK recognise the wider impacts that universities have on society. This alarming statistic goes some way to explaining the relative ease with which the government has introduced its controversial reforms. Where the public has shown concern it has been focused almost exclusively on the level of fees rather than on the implications for the sector and its contribution to the life and health of the nation.

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No time for business to be cynical about social responsibility

By Mark Wakefield

red

It’s a curious thing that in the midst of seemingly intractable global economic difficulties, business leaders are starting to talk about the need for a different approach to business which is explicit about the value it creates for society as a whole. Within the last month or so, we’ve seen two books published by business leaders, Richard Branson’s Screw Business as Usual and David Jones’s Who Cares Wins. From a more bottom-up perspective, business schools are seeing an increasing demand for teaching on the importance of social responsibility. One business school head recently told us that this was one of the top half dozen priorities for companies coming to him for executive education.

These developments are clearly part of a wider response to the financial crisis that began in 2008. David Cameron has tried in part to address this with his Big Society agenda and, last October, Ed Miliband made an attack on “fast buck”, predatory capitalism the focus of his speech at the Labour Party conference.

However, just as our political and business elites are getting excited at the prospect of doing things differently with a move away from the shareholder model of capitalism along comes the recently published British Social Attitudes Survey which seems to suggest that self-interest is back in vogue amongst the population at large.

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Public value in a commercial space

By Mark Wakefield

Primrose Hill
The public valuing the public space at Primrose Hill

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.

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The corporate good life

By Mark Wakefield

Socrates
Socrates

Ever since the ancient Greeks, self-awareness has been a central theme of Western philosophy and literature and there’s now scientific evidence to show that it’s essential to human health and flourishing. Recent corporate reputational crises suggest that we should now apply this understanding to organisations as much as individuals.

It seems that no organisation’s reputation is safe these days, however highly regarded it may be. Recent reputational crises have come about under the watchful – and often judgemental – eye of the media which now seems embroiled in a crisis of its own with current allegations of ‘phone-hacking at News of the World.

The response to corporate reputation-shredding varies from heads rolling and internal inquiries to calls for structural and regulatory reform of whole industries, as with banking. Any and all of this may well have its place but in the end no reform, however radical, is likely to have impact unless organisations ask some fundamental questions about their values and core purpose and how these are expressed in practice. Whenever reputational damage occurs it’s usually because there’s been some critical break in the link between stated values and behaviour. And that can only be because either there is knowing hypocrisy being practised or – much more likely – because in some key sense the organisation has lost its way and lost its sense of its true self.

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