Not so many years ago,the business world mostly held that the sole purpose of a company was to generate profits — within the law, of course, often quickly added. If shareholders wanted to do good with the dividends their company paid them, that was their business. I was once vigorously “corrected” by the CEO of an iconic Australian company for asking about the social impact of business; such questions were a waste of time, he said.
In Darwin, in May 2012, the Australian Institute of Company Directors national conference showed the tide running quite the other way. In forum after forum, the feeling was that:
- (a) leadership of our society was too big a matter to leave to government, and
- (b) business has a responsibility, and would step up to it.
Many speakers noted an expectation, and most accepted it as legitimate, that business would be an agent for good in the world, beyond its basic job of creating wealth. Companies are too important to too many people, and too powerful in their flow-on effects, to be so narrow in their aspirations.
People from Australian and multi-national companies talked about their programs for social inclusion, indigenous engagement, philanthropy, and the broader impact of their work. We discussed gender equity, “no bribes” rules and other ethical questions. A consensus emerged, quickly and plainly, that these subjects were not only proper, but necessary to company directors. Companies must earn a licence to operate from the societies that host them, and a risk to that licence is a risk to sustainable business success.
Over lunch one day, I talked about this change of mood with a member of the organising committee. He told me the conference agenda was designed to explore exactly this, with other aims as well of course. Interesting, isn’t it, that the committee had picked this change as an important one to explore?
Why does it matter to directors? Shareholder activism, Facebook campaigns, politics, sure. But what I heard and saw was people (actual human people) really wanting their companies to step up to this broader agenda. Because we are social beings, because maximising return on shareholder funds doesn’t really get anyone going in the morning, because we actually need a meaning or purpose.
That’s what I think. You?