20th Century Shareholder Capitalism versus 21st Century Stakeholder Capitalism
This Blog argues that the business sector must move urgently from the current 20th Century shareholder focus on making a profit to a more progressive 21st Century stakeholder focus on all stakeholders including shareholders.
in view of the huge challenges facing our society and the world (poverty, inequality and climate change to mention just three (Click here to find out more), we argue that this move is essential and urgent. Shareholder capitalism is no longer fit for purpose.
Shareholder capitalism is busted and has no place in the modern world. While it has achieved many good things, its impact has, unfortunately, also had a profound, pernicious and adverse effect on people and the planet contributing to high levels of poverty, slow growth, stagnant wages for many (but not for those at the top!), rising inequality, an inadequate investment in R&D and, most critically, climate change.
This can continue no longer.
Businesses as Global Citizens have a responsibility to people and planet
The business sector has immense influence and power. As Global Citizens, the business sector, actually all those people who work in the business sector, have a responsibility to use this substantial influence and power to help, alongside governments, to find sustainable and profitable solutions to some of massive problems facing society and the world.
Governments have an essential role to play too, and this is why we support the UK’s Better Business Act. https://betterbusinessact.org/.
Personal responsibility is now essential
When we talk about “responsible business,” we really mean the individuals that work within them. In other words, all of us working in the business sector.
In our private lives, most of us believe in the concept of responsible behaviour. Most of us behave responsibly towards each other, our families and friends and stick to the rules set by society. We call it out when we see others behaving irresponsibly. After all the whole stability of our society relies on this.
So why should we behave differently in our working lives? Why do we accept irresponsible, unethical, sometimes, illegal behaviour within our companies? Why do we accept that “it’s the way we do things around here.” There are many diverse explanations ranging from “it’s not my problem” to a fear of speaking up. Click here for a list of unethical situations.
It is much easier for business leaders to create change, if of course, they wish to. They have great influence and power to make a difference. But the rest of us can and must play a part, however small a part it may seem. In order to make the world a better place, we all need to behave more responsibly with regards to the actions we take, and the decisions we make.
We argue that this is a responsibility and not a choice.
Climate Change
Most of us now accept that climate change is real and that it is man-made and caused by the business sector’s exploitation of planetary resources.
Despite the overwhelming evidence of global warming, some people still disagree that it is man-made. We ask them to think carefully about their reasons for their disagreement or denial and whether a lack of action on their part is really worth the risk.
People and society have been exploited too through profit-motivated decision-making.
There is limited progress towards responsible business
Although progress is being made by some visionary companies, this responsibility, for people and planet issues as well as making an ethical profit is, unfortunately, not yet being acted on or even acknowledged by enough business leaders. This is despite the strong moral and business case for doing so.
Maintaining the status quo does benefit some
Some business leaders still sacrifice the needs of people and planet to the altar of profit. These people might know they are behaving irresponsibly by exploiting people and the planet but simply do not care. They have share prices to meet, profit targets to achieve, and bonuses to win. These irresponsible people have a vested financial interest in maintaining the status quo. Unfortunately, they also have a disproportionate influence on decision-making through their connections, lobbying, and public relations campaigns sometimes distorting the truth in their own interest i.e., BIg Oil versus the World Click here to find out more.
Others recognise the scale of the challenge but do not appreciate the urgency for action and “park-it” as something to be tackled tomorrow.
Too many recognise the scale of the challenge but do not know how and where to begin with others not even understanding the scale of the problem.
Many others do not recognise there are profitable solutions to the problems of the world.
So, what is to be done?
The Responsible Business Project 2030
It is because we believe that businesses, actually those people working in the business sector, need to take more responsibility for their people and planet decisions that we have formed the Responsible Business Project 2030 with a mission to make responsible business commonplace by 2030.
The Responsible Business Project 2030 aims to support the growing army of responsible activists by encouraging businesses to find purposeful, sustainable and profitable solutions to the global problems discussed above.
2030 demonstrates the need for urgent action – the time is now for action.
We are focussed on making the abundance of expertise on the benefits of responsible business more accessible, and more widely utilised so that their application is commonplace by 2030.
The Responsible Business Project is far from anti-profit.
We are not arguing that “profit” is not important. It is clearly essential for any business, at least in the long-term. The tax revenue from income and corporation tax both contribute massively to our National Health Service, our education, security, and many other services. Profitable companies are also likely to employ more people, pay them more and invest. However, profit should not be made at a cost to people (such as unfair wages) and the planet (such as CO2 emissions).
We just believe in ethical profit.
The Responsible Business Website
Through our website, we want to build a community of like-minded people, sharing resources and ideas and making connections. Essentially, starting a ripple effect of responsible business activism.
We hope that those who are looking for a purpose in their work, will join the Project. If you feel you can make a difference and are prepared to take action, however small, to help make the world a better place to live and work, then this mission is for you and this is the place for you to be.
Wherever you sit in your organisation’s hierarchy, there has never been a better time or opportunity to speak up and take action: to be a responsible business advocate and activist.
We are looking forward to working alongside the many other excellent organisations who are driving progress towards “stakeholder capitalism” and will promote their services whenever we can through the Resources section of our website.
You can support the Responsible Business Project 2030 either
As an individual either as a Member or a Responsible Business Activist See here
or
As an organisation either as an Ally (a company providing relevant resources) or as a Business Supporter. See here
For more information get in touch.
Jim Bignal Responsible Business Project 2030 September 2022
