Ahead of the G8, Paul Polman, CEO of Unilever spoke at London’s Tate Modern, an iconic modern art gallery, contributing to a series that aimed to “generate powerful new thinking on the most important issues of the day”.
Polman raised that when all was going so well economically, who was questioning how sustainable the “great times” were? Very few, in fact, and those who did (e.g the FT’s Gillian Tett who'd figured out those derivatives didn't add up. Her background? Anthropology) weren’t acknowledged.
Yet since trouble hit, well crashed, jeapordising our entire economic system, there remains the need to examine the sustainability of our so-called progress.
The extent of consumption and debt, and related self-interest, resulted in low trust in business, institutions and the system at large. For good reason. The crisis of 2008 was beyond a crisis of finance. It was also a crisis of morality. We must question the purpose of business and its impact in the long-term. As Ken raised in his blog earlier this month.
Unilever’s response was its highly ambitious Sustainable Living Plan. And, dramatically, a move away from quarterly reporting. Instead communication with stakeholders, shareholders and potential new investors now focuses on far more strategic messaging. At shareholder meetings over a quarter of their discussions are on issues of sustainability, no longer focusing on just the top and bottom line, and defining more clearly the social mission across their brands.
When first released in 2011 it was met with skepticism In fact the shares dropped. Polman was reported as stating at the time if you’re not with us don’t invest in us. I recommend you take a look at Unilever’s results since – both their profits and growth, but also their shareprice.
Last night a different CEO was on the platform, this time in a Cathedral alongside an Archbishop, as part of the ongoing series organized by St Pauls exploring the “purpose” of the financial sector. Antony Jenkins the CEO appointed last year to turnaround Barclays the disgraced British bank, spoke of how “Bankers were too focused on the short-term, too self-serving and too aggressive in their actions in the years leading up to the global credit crunch”. A large price was paid was by the public at large . He now acknowledges that “you can’t have long-term success [if you don't] behave responsibly”.
As I listened to Jenkins I couldn’t help but feel skeptical.
But as Polman argued earlier in the week, skepticism is the lowest form of responsibility. We get the society we deserve by our own action, or lack of it. For professional accountants who operate to a Code there is an important role to play in creating successful and purposeful enterprise for the long term.
See the recent CGMA report: Building world class business -which looks at the debate around the role of the company in society and considers the argument for a long-term approach.