We can disagree on the ‘why’, but the ‘what’ of leadership is something we all have in common
There are almost as many opinions on business as there are people who hold them. In the UK, the recent vote to leave the European Union was fuelled, much like Donald Trump’s campaign for US President, by a suspicion of globalisation. Commerce, so the argument goes, has impoverished the many while enriching (and consequently handing political power to) the few.
The more traditional positions of the major parties on both sides of the continent fall into two broad categories. Either the power of business needs to be released through deregulation, or otherwise the rampant greed of corporations must to be kept in check through directive and close supervision.
Those of us who see, to take a recent example from the UK, the prosecution of only three out of 700 firms found to have been paying below the national minimum wage view current regulation as unsatisfactory. The lives of working people and their families are being adversely affected both by poor corporate citizenship and the inability or unwillingness of those ultimately tasked with protecting them to do so.
On the other hand are those of us who believe, for example, that a few wayward traders and executives are culpable for the excesses of investment banks, or that the accumulation of capital in few hands is the natural result of the best allocation of resources, i.e. market capitalism.
Somewhere in the middle of these fundamental disagreements lies a patch of common ground rarely acknowledged: we all, on some level, often for differing reasons, want the same from corporate leaders. We all want their companies to behave well.
As a believer that companies are run by people and are therefore inherently in need of regulation in order to prevent exploitation, I would demand that leaders ensure that their employees, communities, and other stakeholders, including the environment, be treated with respect. This would help to guarantee the security of our people and the wellbeing of our societies.
As a believer that free markets drive innovation, create jobs, and enable growth and prosperity, I would demand that leaders ensure that their employees, communities, and other stakeholders, including the environment, be treated with respect. This would help to guarantee the security of our people and the wellbeing of our societies.
No, that’s not me poorly editing my own writing. Allow me to explain.
The recent groundswell of feeling against globalisation has been coming for a long time. Commerce and government have, in some quarters, behaved as if business as usual was a viable option.
Those in favour of regulation want firms to behave well so that negative externalities are minimised and people and our planet can thrive. Those who would free markets need to see good corporate citizenship as a risk management tool against regulation, because where companies and industries self-regulate in an effective way, the need for government intervention is reduced.
There is an immediate, pressing need for our companies to do the right thing, and to demonstrate the sort of leadership we know is possible. Whether we believe that primarily for its own sake or in order to protect market capitalism is another argument. The ‘why’ will be hashed out in elections; the ‘what’ is something on which we should all agree.
And given that, there is no further reason for poor corporate behaviour, because whatever we believe, companies playing an ethical, positive role in society supports our view.