David Bennett became chair of Virgin Money in 2020, having been deputy chair since 2015. He’s also chair of Allfunds, non-executive director of PayPal (Europe), and non-executive board member at the Department for Work and Pensions. David was previously chair of Ashmore as well as group finance director and then group chief executive of Alliance & Leicester, and executive director of Abbey National.
Here, David reflects on chairing a Think Tank roundtable and lays down a challenge to his peers.
My challenge to business leaders
I believe that there is a real desire amongst business leaders to create a fairer future. The risk however is that the scale of the task seems overwhelming, and we end up doing nothing and sticking to business as usual.
But as the 18th century MP, economist, and philosopher Edmund Burke said, “Nobody made a greater mistake than he who did nothing because he could do only a little.”
The challenge, then, is this: don’t do nothing because you can’t do everything. Take one small step. Do something, however modest, in your own businesses that you believe will make the world fairer. Individually, these small steps might not change the world, but if we all took one, then collectively we would end up in a much better place.
“Don’t do nothing because you can’t do everything.”
Take my industry, financial services, for example. Over the last 40 years or so, through lots of small steps, a sea change has taken place. Many people associate the financial sector with a focus on profit and shareholder returns, but since the financial crisis we’ve developed a much broader view of how the industry can contribute to society. People in our sector have been asking questions about wider goals beyond financial returns and embraced the idea of social purpose.
Of course, we have always had a responsibility to give good advice to our customers, but there is now a recognition that looking after our customers as best we can and putting them at the centre of our products and services makes long-term business sense. In addition, there is a clear acceptance of the need to invest in our service proposition for vulnerable customers, and to consider financial inclusion and social impact. Increasingly our colleagues and customers care about social issues and climate change, and they want us to do the same.
A healthy financial system is a force for good. It facilitates growth at a global, national and community level, as well as enabling positive societal change. However, we live in a world where many people feel unfairly excluded from the rewards of economic growth due to their situation, their gender, ethnicity, education, age, or other characteristics. There is a perception that society is divided into a minority who benefit from the system, and a majority who do not. That perception causes polarisation, which is a danger to both our society and to business. Many people feel the system doesn’t work for them but struggle to engage with how they can change it.
“A healthy financial system is a force for good.”
As business leaders, I think we all recognise the danger of polarisation and this misconception. So, what can we do about it? As an industry, finance is working much harder to challenge assumptions around unfairness — the “victims” and “beneficiaries” — and to engage more with younger people and those who feel that investment isn’t for people like them, or feel they don’t have a voice.
A key way the board can play a role in all of this is to bring in wider voices when making decisions. There is always pressure on management to deliver financial returns, and the board’s role is to challenge them around wider social considerations. If there is a choice between 10% growth with a negative impact on the environment, employees, or community; or 9% growth which will have a positive impact? That’s where the board has to consider a wider audience.
In banking, a great example of this is considering branch footprint. When assessing the optimum number of branches, and whether or not to close a branch in a local community, it cannot be a solely financial decision. We have to think about what’s best for all our customers, for colleagues and their well-being, and for the environment, as well as shareholders. A good board should consider all of these during their decision-making and do what’s right. Decisions about hybrid working, or investing in digital to reduce emissions, need the same approach, considering the needs of all stakeholders.
Wider ownership of shares and assets can also make a difference — to align people’s interests and give them a stake in the economy, as well as a say in how their businesses are run. Mutuals like John Lewis or the Co-Op, as well as firms that give their employees shares in the business, all recognise that having a stake is a powerful motivator that can unite management, employees, and customers alike. Perhaps having a stake is as important as having a voice.
Click here to read the full report on our roundtable findings.