Sir Kenneth is a technology business leader and philanthropist, whose current roles include chair of Restoration Partners, Interswitch Group and Proxymity, as well as chair of social enterprise The Positive Transformation Group, welfare to work charity Shaw Trust, and the Aleto Foundation, a charity focused on helping talented youngsters from tough reality backgrounds to fulfil their potential. He is a former board member of the Independent Parliamentary Standards Authority and a former deputy chair of the Institute of Directors. He is also Lord-Lieutenant of Greater London and High Bailiff of Westminster Abbey.
Here, Ken shares his thoughts on how business can build a fairer future, and on the experience of chairing a roundtable for BI’s Think Tank.
My challenge to business leaders
Rather like a spell of extreme weather which exposes the cracks in the paintwork and leaks in the roof, the covid pandemic exposed a lot of social imperfections which hitherto had been ignored — and chief amongst them is unfairness. From vaccine availability between rich and poor nations, through to how many citizens of one of the world’s richest countries have been all-too-dependent on £20-per-week additional Universal Credit, inequality has suddenly become obvious to all.
And so, my challenge to my peers is this: do not waste the unvarnished look at our society that this crisis has given us. Instead, recognise that your businesses can and should play an active role in forging the societies they operate in, and that today’s issues of fairness can’t just be left to policymakers to sort out.
“Do not waste the unvarnished look at our society that this crisis has given us.”
Many have long contended that social justice isn’t “business’s business”, and that, as long as you pay your fair share of taxes, it’s up to the government to make good use of that money and to address these issues. I still remember the chair of a board I sat on objecting to the suggestion that we gave some of our profits to charity, on account that this was our shareholders’ money and that they knew better than us what to do with it.
But I’d argue that there is a solid capitalist, commercial case for pursuing fairness — one that goes beyond social justice being its own reward. Fairness is good for business, while the opposite — unfairness — has serious negative impacts on everything, including the balance sheet, and therefore this should matter to even dyed-in-the-wool believers in shareholder primacy.
The fact is: systemic inequality creates constrained markets where businesses cannot achieve their potential because customers cannot achieve theirs either. Just take a look a China, where companies were only able to generate the enormous profits they’ve been making there once that country became economically fairer and more middle-class.
“Systemic inequality creates constrained markets where businesses cannot achieve their potential because customers cannot achieve theirs either.”
More than that, systemic inequality breeds disruption, which, again, jeopardises success. Whether it’s France’s Gilets Jaunes, Occupy Wall Street, or Extinction Rebellion, the past few years have seen an explosion of anti-capitalistic sentiment — and I hope we can all agree that generalised and, at times, radical anti-business attitudes aren’t good for business.
If unfairness destroys value, what about the positive impact of fairness? At the company level, it can be a powerful driver of competitive advantage. For the coming generations of employees (and, ultimately, leaders) fairness is a touchstone issue — one they’ve been feeling viscerally as they piled on student debt, watched affordable houses become a distant dream, and saw their planet damaged by a generation who won’t have to deal with the consequences. In the midst of today’s “Great Resignation”, fair-minded employers are able to recruit better and more diverse talent, which in turn lets them better serve the needs of disparate cohorts of customers.
Just as a football manager can’t build a winning team out of 11 goalkeepers, it is axiomatic that a business leader can’t build a winning company without hiring a wide range of employees with distinct but complementary skills and expertise. A reputation for fairness can help them do so.
In other words, unfairness has substantial costs attached, while fairness creates a dividend for all — shareholders included. And that’s why businesses that want to continue to thrive tomorrow must play their part in building a fairer future, today.
What we learnt by adding a seat to the table
Every Board Intelligence Think Tank roundtable features an unexpected guest, invited to bring a different viewpoint to the conversation. On this occasion, we heard from Lizzie Beale, a youth ambassador.
Lizzie’s point about the impact that businesses can have when they get involved with their community strengthened my belief that fairness is a source of competitive advantage. Organisations that don’t understand (i.e. truly empathise) and treat fairly, their customers, supply chains, staff, recruits, regulators, and the communities in which they operate are at a competitive disadvantage to those that do. QED!
Click here to read the full report on our roundtable findings.