Can business be profitable and responsible? A great question considered by a panel rich in experience including the Chairman of Sky, the CEO of Waitrose and the CEO of the RSA. The discussion was convened by Sky as part of the CBI Great Business Debate driven by polling which discovered that 53% of people do not think business has a positive contribution to make to society.
The majority of the panel felt deeply disappointed by the polling results, not surprising considering Sky and Waitrose are two of the poster stars for responsible business. Mark Price from Waitrose rattled off a series of highly impressive statistics demonstrating that being responsible is not just good for society but is great for the bottom line. Currently over half of UK employees feel that the companies they work for don't make a positive benefit to society, resulting in lower levels of engagement, poorer productivity and reduced profits. Mark argued that responsible businesses can shift this dynamic and be profitable and responsible.
It took Mathew Taylor from the RSA to burst the optimism bubble and expose some of the deeper structural flaws that may explain why the public is sceptical about how business helps society. Top of the list is the increasing proportion of turnover allocated to dividends and executive pay - shifting away from labour costs. Even in cities as large as London, people can see the negative societal impact of the creation of a new mega rich partly generated by this trend. The feeling of public disquiet is further heightened by how some businesses - particularly the technology giants - are perceived to be avoiding tax and by doing so are not paying society wages.
The underlying negativity of these two trends is sufficiently strong in the public's mind to overwhelm the many fantastic examples of responsible companies such as Sky and Waitrose. The question is how might this change?
There are things that business leaders can do themselves. Mathew Taylor brilliantly summarised the role of a great leader as being to bring 'The Future into the Present'. If this can be achieved the negative impact of short-term thinking can be overcome and business can demonstrate it is investing in the well-being of future generations and not just short-term profit.
Businesses can also collaborate for the greater good. The current climate negotiations in Paris are a fantastic example where companies have set aside commercial competition and united to present a compelling case for faster global action to cut carbon emissions.
Enlightened consumers also have a role. The rise of social media has significantly increased corporate reputational risk. Bad news spreads fast and quickly gains traction - just ask VW. Consumers can scrutinize companies more closely and vote with their pockets forcing business to act more responsibly.
But more responsible business leaders and enlightened consumers are not enough on their own to shift public perception. There is too much wriggle room allowing those businesses that wish to make profit at the expense of society a license to operate.
Tightening the rules of engagement is a necessity, particularly with the emergence of a whole new generation of technology companies leading the charge for 'the shared economy'. These companies operate in a new world where owning our day-to-day data is key to their success and profit. It is a fine line between using this private data for the wider benefit of society or in a more damaging way for corporate profit. When businesses get so close to our daily routines their motives will be even more closely scrutinised by the public and it will be interesting to see how this changes the public's perception of the role of business in society.
The full debate can be seen here
CEO/Founder Hubbub UKSuggest a correction