The Company Citizen

Good for Business, Planet, Nation and Community

Tom Levitt

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351672924
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Business doing good is doing good business; this book learns from the era where governments ruled the world, pre-globalisation, and where business looked after itself, where issues like climate change, resource depletion and even poverty and hunger were not thought to be the responsibility of business.

The Company Citizen concludes that not only are these key issues for business today but that the world will not be able to manage these issues without the active participation - even leadership - of business. Aware of the shortcomings of both government and civil society the author argues that environmental sustainability, economic and social inclusion and the better management of resources are all key issues for business and that it makes good business sense to manage them better. This book examines the case for the company citizen on a global, national and community level working alongside other. Never has the conscientious company citizen, as envisaged by 19th century Quaker philanthropists, been more needed; and never has that business case, one that justifies a long-term commitment to practical corporate behaviour for good, been more clear.

Drawing attention both to the businesses that are taking the lead and those who are holding us back, the author concludes that only by involving business can we tackle the great issues of the day - and survive, as communities, nation and planet.

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1 The case for company citizenship

In 1948 my parents got engaged to be married.

In other news, Land Rover and Alcoholics Anonymous were born and Mahatma Gandhi was killed, the Windrush arrived at Tilbury and Bradman was out for a duck in his final test innings. Steps were taken to create NATO and introduce the Marshall Plan whilst the British Parliament passed a Bill to establish the National Health Service.

Work started to construct the headquarters of the fledgling United Nations on a patch of Manhattan real estate donated by John D. Rockefeller Junior. That year the 58 members of the UN were busy: they approved its Convention on the Prevention and Punishment of Genocide, set up the World Health Organisation and adopted the Universal Declaration of Human Rights.

The optimistic era of world government had begun.

Despite vivid memories of world war this was an age of innocence. Of course governments and democracy were the way forward, legitimately elected powers should rule their nations, international co-operation between governments – who else? – was the way to tackle conflict, global injustice and hunger. In 1951 the UN adopted a convention on refugee status, still an issue six years after the war. Those who gathered that year, at that new, permanent UN Headquarters, were truly the powers that be, the wise, the diplomatic, the champions of peace, harmony and mutual success, the embodiment of universal citizenship.

How the world has changed in 70 years. If we were convening the United Nations today, who would sit around that table? Suppose we all agreed that climate change, hunger, poverty and the depletion of natural resources – and their consequences – were the issues that most threatened humanity globally, who should we call upon to address them? Would we believe, as they did in 1948, that governments alone could solve these issues?

Climate change and the depletion of natural resources weren’t on the agenda back then because they weren’t yet in crisis. That came later, as industrialisation gathered momentum, forests were laid to waste, fossil fuels were burned like there was no tomorrow: if you ran out of stuff, you just dug up more, at home or in the former colonies. And then came globalisation . . .

The downside of all of these issues, changes for the worse, are traditionally associated with (some might say ‘blamed on’) the activities of business. Business is accused, with some justification, of wasting our resources, exploiting our labour, poisoning our environments, never mind that they also produce the wealth we share, homes, jobs and purpose for countless millions.

p.2

If the UN were starting today global business would have to be at the table. Natural justice says so – ‘you helped get us into this, you help get us out’ – but so does the realpolitik of power. In 1948 those 58 nations were the powerhouse, the brokers, the world’s wheelers and dealers; perhaps only the Rockefellers, whose family embodies both the extravagance of oil and all that’s best in philanthropy, would have understood back then. Today, as we shall see, the world’s biggest businesses are on a par in size and power with nations but without their democratic constraints. They must be at the table, in the game, as trustworthy partners in a common cause.

For our planet, as for our nation. The huge and barely accountable monoliths that government created back in the 1940s, the nationalised coal, steel, transport and utility companies, are today in private hands: few would turn all of those clocks back to exactly where they were then. A third of our public spending is now outsourced, for good or ill, largely to private companies. The National Health Service itself (where the proportion of private provision is, counterintuitively, far lower than elsewhere), is struggling to survive as a centralised, nationwide, bureaucratic ‘sickness service’. Our government, which collects half of its tax revenue from businesses and their employees, has still not recovered from the world’s showdown with those global banks that were ‘too big to fail’ a decade ago.

As economic inequality grows even within Britain, fatuously blamed on some inevitability of capitalism, the communities that suffer most are those that lack the services, skills and spirit that bring reality to words like ‘cohesion’ and such slogans as ‘we’re all in this together’. The cohort of ‘just about managing’ is one of only a few groups in society experiencing growth – but of the wrong sort.

At every level – planet, nation, community – we need the resources of business to be deployed positively to support our common causes of justice, sustainability and dignity; our tools must be carrots because sticks don’t work. We also need business to keep doing what it does best, but better: providing us with the wealth we need whilst helping us to steward our resources, promote the purpose that sustains our mental health and supply the structures by which we regulate our days.

In this book I will argue that such positive and engaged behaviour is not only good for us, the people, it’s good for business too. A business case can be built: business for good is good for business. I’ll advocate a mindset which I call ‘Company Citizenship’; it’s not a badge, accreditation, sect or club but rather a way of thinking which applies to the multinational conglomerate, the independent hairdresser and every business in between, should they choose it. And they should.

This is the case for the Company Citizen.

***

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A Company Citizen is a body corporate, owned and run by people.

Companies have purposes and, whilst they vary immensely, ‘staying in business’ is certainly amongst them. Alongside a task-orientated purpose – writing the best programmes, being able to retire in comfort, cleaning floors to the highest standard or developing the missing link – they have missions, visions and values, though not always explicit or well-defined: the owner may not even be aware of them. But if owners don’t adopt values then others will define those values and labels for them, confer and incorporate them into the company’s reputation – including those perceived as negative.

A Company Citizen respects and engages with others and plans for the long term. Aware of its environment, fiscal, market and physical, it responds to changing circumstances as guided by its judgment and values and as allowed by its resources.

It respects laws, rules and conventions but reserves the right to challenge and even work to change them, transparently, either alone or collectively with others.

It speaks out as the need arises.

A Company Citizen is accountable to . . . now, there’s a question. To its owners, certainly, to its regulators, where appropriate, to the law. To its customers. And to the court of public opinion.

Good Company Citizens are ‘responsible’ in their actions; although they can be passionate, they’re guided by rationality and those stated purposes and missions. A common (but not universal) value, often implicit, recalls the Hippocratic Oath: ‘to do no [net] harm’.

Yet public confidence in business continues to fall; only half of the populations of 28 countries in 2017 trust business to ‘do the right thing’, says Edelman.¹ At 52 per cent that figure mirrors that for the voluntary sector (53) and is significantly higher than for government (42) and media (43), though faith in all four is falling. For the first time, ‘peers’ are ranked more trustworthy than ‘experts’. There’s a crisis of confidence in leadership generally, with only one in six believing that ‘the system’ is working. Job security is a major issue in the face of globalisation and technological change, so half the population favour protectionist trade policies. Edelman rightly regards this as an opportunity for business, not just a challenge. In a world where the public trust employees’ views more than those of CEOs, the three greatest opportunities for building trust and restoring a ‘licence to operate’ are treating employees well, offering high quality products and listening to customers, all favoured by those whose confidence in ‘the system’ has been shaken. Every element of social responsibility is key to restoring trust: from paying taxes properly to ethical behaviour, transparency, honesty and environmental stewardship.

Edelman reports both massive public support for better regulation of business and that greater regulation is what business fears the most. The way to head off this ‘threat’ is to render it unnecessary, by getting ahead of any bow-wave push for laws on more responsible practices.

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In short, every company should be a Company Citizen. But why should they? The herd mentality mitigates against boldness, breaking tradition or the sticking out of corporate necks. Business will only become more ‘human’, citizen-focused and environmentally positive through incentives. Each of these qualities can be justified by a business case but cultural change is a real challenge –especially amongst those with the largest workforces, where communication is most difficult and cynicism most deeply entrenched. Ultimately only conventional business drivers will drive large scale change: existing businesses need conventional business motives to make the idea of Company Citizenship sustainable.

At the clothing company Patagonia, their hearts told them to utilise only organic cotton but insecticides and pesticides were so ingrained in that industry that there was insufficient organic supply available for them to use. They decided to shrink the business for three years whilst they educated their supply chain. They came back with a strong USP and a niche market (plus great products, appreciated by the mainstream) and today they can claim both the ethical and commercial high ground. That principled stand couldn’t have succeeded without turning it into a business case.

Citizens are decent people; they care about others and value the idea of working together in common cause. Company Citizens are little different from human citizens in those respects. Lord Victor Adebowale, a leading thinker in social business and public service reform, says: ‘If you’re not producing social value you’re not a business, you’re a gang.’²

Larger Company Citizens adopt a hierarchy of leadership, the managers may or may not be the owners, the owners may be individual or multiple, engaged or laissez faire, identified or anonymous. They may even be other Company Citizens. They employ people, assigning them responsibilities. They may be geographically concentrated or disparate, the business may have an established and explicit mission and values – or not. The smallest Company Citizens are companies in name only, legal entities with company status, barely distinguishable from the human sole trader behind the label.

The status of ‘Company Citizen’ is a state of mind, one that we might wish would inspire more in the humans that we unquestioningly describe as citizens. Nor does the mindset relate only to business leaders: two thirds of British workers think that their work makes ‘no meaningful contribution to the world’ but wish that it were otherwise.³

Some tell me that citizenship is too precious a quality to bestow on a mere corporate legal entity; if it doesn’t breathe or defecate it can’t be a citizen. Conventionally, we believe that citizens care, vote and interact through cooperating, volunteering, creating and maintaining communit...