These are difficult times for all of us. We are having to adapt rapidly to unprecedented situations. Many businesses – large and small – are on the brink. We will see now who take their responsibilities to employees and customers and communities seriously – and those whose commitment to “stakeholder capitalism” or “Purpose-led business” was superficial – or even worse.
Responsible businesses will do their utmost to keep paying their staff rather than making them redundant. Where staff are able to keep working but from home, there are duties of care around mental health. I know employers who are insisting on regular video conference calls where line- managers can check on how colleagues are coping and arranging “buddy” systems to call those known to be on their own and at a greater risk of loneliness and depression. CEOs, boards and Senior Management Teams can lead by example, and forego pay during the crisis. Even more importantly they can eschew future bonuses which are based on artificially skewing qualifying dates which take advantage of future share-price recovery from the recent dramatic falls on Stock Exchanges across the world.
Similarly, responsible businesses are doing their best, where they are still allowed to, to get goods and services to customers, to protect vulnerable customers and keep everyone informed. They are also trying to protect supply-lines: speeding up payment of suppliers – especially small businesses – where possible; and extending credit terms for small business customers.
There are encouraging news reports of perfume and alcohol companies switching production to the manufacture of hand-gels and sanitisers; luxury clothes manufacturers switching to the production of PPE: Personal Protection Equipment for health and social care workers; and technology companies helping national health services to fast-track new Apps to track the virus.
Beyond the immediate crisis phase, there are fundamental questions about the world after the pandemic. The Financial Times newspaper had a powerful editorial on April 10th titled “The burden of the coronavirus pandemic must be shared fairly.” The FT argued:
“A pandemic calls forth not just the obligation for human solidarity, but the need for it. We are all far stronger when tackling it together… Those with the means to do so must help everybody else cope with the virus and with the costs of coping with it, not only today, but in future.”
Already, multiple groups from business and Civil Society are debating the contents of new Social Contracts as part of how we build back better. Amongst those I am tracking carefully are Imperative21 – a consortium of B-Lab, The B-Team, CECP (Chief Executives for Corporate Purpose), Conscious Capitalism, JUST Capital and the Initiative for Inclusive Capitalism: www.Imperative21.co
There are many different ideas about what a new Social Contract might involve. Amongst other things, I suspect it involves in future, better pay and conditions for those now on Zero Hours contracts and in jobs which were previously under-valued but which the pandemic has revealed to be so important for the maintenance of vital services. These include the public transport workers, the hospital porters and other support staff, the supermarket shelf-stackers and delivery people and so on.
More broadly, business leaders need to give more attention to the purpose of business and their responsibilities to different stakeholders. Similarly, there needs to be far greater focus on organisational culture: “the way we do business around here.” Many of us will have heard the maxim that “culture eats strategy for breakfast.” I would add: Purpose, without positive supporting and enabling culture, goes hungry.
There are several dimensions of a positive, sustainable culture. These include making innovation and sustainability synonymous; being empowering and enabling; open, accountable and transparent; and being ethical and responsible.
A recent World Economic Forum blog (April 6th 2021) was headed: “Why we need social intrapreneurs more than ever during COVID-19.” The blog draws on a report from the Schwab Foundation for Social Entrepreneurship, Yunus Social Business and Porticus: “Business as Unusual” which presents best practices from social intrapreneurs: employees who are working to address environmental or social problems. It also shows how businesses can facilitate social intrapreneurism.
Apart from promoting social intrapreneurism, an effective culture can be encouraged by recruitment, induction and promotion in line with the values of the organisation. More broadly, who gets recognised and for what, within the organisation matters. Boards have a critical role to play in defining the desired culture of the organisation and for checking to see whether reality matches aspiration.
International media right now is full of speculation about the shape of the post-Coronavirus world. Some argue “everything will change – nothing will be the same again.” Others question whether, in the longer-term, much will really change. Personally, I subscribe to neither of these extremes. I suspect there will be many changes (for example, more flexible and remote working, more tele-conferencing, greater reliance on more local supply chains and faster adoption of Circular Economy models, more Schumpeterian Creative destruction as industries like aviation readjust to the post COVID-19 world).
What really interests me, are those positive changes towards more responsible, ethical business and sustainable development, that could be achieved after the pandemic, if men and women of goodwill show determination and collaboration to champion them. I hope we will be able to meet in Manila later in the year for the AFES conference and debate these issues face to face. Meantime, this blog platform is an opportunity to share ideas and issues from around the world and I congratulate the AFES team for taking this initiative.
David is Emeritus Professor of Corporate Responsibility at Cranfield School of Management in the UK, chairman of the Institute of Business Ethics, author of numerous books on Responsible Business and Corporate Sustainability and a regular speaker at AFES.
Keep in touch with David here | www.DavidGrayson.net | Twitter: @DavidGrayson_
Check out his sessions at AFES 2018 below!
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