A Meaningful Profession: ICRS

On 15th September 2016 Tom was a platform participant at the first major debate sponsored by ICRS (Institute of Corporate Responsibility and Sustainability), hosted by the RSA and chaired by the RSA’s director Matthew Taylor, in the presence of over 100 CRS/CSR professionals.


L-R: Claudine Blamey (ICRS), Lee Elliott Major (Sutton Trust), Beth Knight (EY), Matthew Taylor (RSA), Tom, Mariano Maratino (Indeed)

The debate was on the future of the CRS profession; at present the vast majority of people who work in CRS and CSR are graduates based in London and the South East. In Tom’s comments he pointed out that (at 62 years old) he was one of only 6 per cent of his generation to go to University whereas today the goal is for half of all 30-year olds to have a university standard (NVQ4) education. The panel agreed that there was a need for more apprenticeships and non-graduate opportunities, too.

Below are the thoughts that Tom put together when considering his remarks.

In an age of austerity, society and business have to engage better together. Why? As statutory government services are cut and charity incomes flatline a gap in community capacity has emerged, threatening the way we help the most vulnerable people, promote good health, celebrate cultures and support community cohesion. Businesses that take a broader view of how to protect the interests of their employees reap the benefits: greater employee engagement, more opportunities for innovation and partnership working and genuinely earned reputational gains are on offer.

At the same time a switch in business from shorter term to longer term thinking and planning can, for example, turn environmental challenges into opportunities. This then, is the business case: there is growing evidence that the Company Citizen is better placed to achieve sustainability in the triple bottom line – yes, including profit – than is the more predatory model so often but unhelpfully defined as the archetypal business.

160915-icrs-rsaIf an engagement programme can include using the surplus skills of business to, say, increase the capacity of the voluntary sector, better equipping them for survival and growth under their own terms, then a double whammy is achieved. No more will senior corporate executives have to admit that they have ‘no idea’ what life is like for people living within a mile of their plush HQ.

To deliver these goals and values, especially around employee engagement, a company needs a mission, a values-led philosophy, a sense of purpose broader than filling spreadsheets or making widgets. The spark to ignite this may come from Corporate Responsibility professionals, often found in the Human Resources department, a growing band of natural partnership workers, capacity builders and outward lookers. Promoting graduate qualifications is, of course, welcome; but it isn’t the only way forward.

Every manager should be a corporate responsibility worker, every company decision subjected to social impact assessment, every worker a champion for their community, fostered by the family of the Company Citizen. No more will ‘green teams’ of dedicated employee volunteers, encouraged by managers to use their voice for the environment, conclude ‘But we’re changing nothing’. We should boast not of hours volunteered but of change made.

Something is missing here. 99 per cent of businesses and half of private sector employees are excluded from this scenario: the SME sector. Whilst we define SMEs as having fewer than 250 employees in truth the median is in the 6-10 category. They have no HR departments and as for Corporate Responsibility their response is often ‘We’re not Corporates, this isn’t for us’. Yet they’re the closest to those voluntary services on the ground, the lifeblood of the community in which Company Citizens live.

By bringing SMEs together in local networks to share resources, perhaps alongside their larger cousins, capacity issues can be addressed and meaningful engagement generated to the advantage of all: society, employees and companies themselves. It can be done; the barrier to it happening is the wrong sort of thinking, hiding the path to win:win opportunities.

Brexit means MORE need for Responsible Business

(This article appears on the CBI Great Business Debate web site)

EU BrexitOver coming years, at least until Britain has established a new global role following the ‘Brexit’ referendum, the spotlight of public scrutiny will fall on business more than ever before. Its ‘licence to operate’ will have to be more obviously earned, whilst thoughts that business was somehow above the tawdry world of (small ‘p’) politics will have to be reassessed. Brexit is changing everything.

Big business was clear about where it stood on Europe: international trade requires maximum market access with minimum trade barriers so access to the single market was the obvious compromise. Smaller companies were more equivocal and less loud but not overwhelmingly pro-Brexit.

Yet business failed to convince enough people that their profits and voters’ jobs shared a common cause in ‘Remain’; polls show that business leaders’ opinions have no more credibility than those of politicians or red top journalists. Overseas investors in the North East wrote to employees, begging them to back ‘Remain’ in areas which subsequently returned large Brexit majorities.

And whilst the City, the FTSE community and big business generally were seen as pro-Europe the leafy home counties – where the captains of those very industries live – voted ‘out’. Did they not believe their own rhetoric?

There’s more.

Two groups emerged as pariahs during the referendum campaign: immigrants and, less predictably, ‘experts’. Anyone who knew what they were talking about was, bizarrely, not to be trusted. Leaders of multinational corporations suffered three-fold: they associated with Johnny Foreigner, they were experts and their interests were perceived as alien because of their size, distance and lack of a uniquely British focus.

Business was blamed for recruiting foreign labour at the expense of native British, with some employers cynically only advertising vacancies abroad or in another language, such as Polish. Since the referendum Muslims have borne the brunt of an unleashed tide of racism; Eastern Europeans, even families who arrived as refugees before the EU existed, have found themselves abused for the first time. Employers must work hard to prevent such neanderthal attitudes poisoning the workplace.

A sense of powerlessness, alienation from the establishment, contributed to the Brexit vote: inflated top salaries, growing levels of working poverty and multinationals’ optional approach to taxation all represent just that. Business must address these issues.

Our country must rebuild. Most intellectual leaders are still stunned by the unexpected and irrational nature of the June 23rd decision. Leading politicians have jumped ship rather than take responsibility for the decision they advocated: business must not do the same. Business has to find a new identity, less distant, a more human approach to the bottom line, one that promotes inclusivity not just in the workforce but alongside others in local communities.

This story is not over: social and economic conditions could get worse before they get better. Certainty and stability are gone, for how long?

The phrase ‘better together’ has never been more true; even if together we are to turn our backs on the biggest single market in the world and on 40 years of social and environmental progress. Business must be part of ‘together’ without being arrogant or lofty; our future depends on the Company Citizen stepping up to the mark.

(Picture from FreeDigitalPhotos.net Stuart Miles)

An Engagement Matrix: The CSR to Mission Continuum

On 1 July 2016 the Cabinet Office, in association with Legal & General, hosted an all-day open conversation on the future of ‘mission-led business’ in which Tom participated.  Tom facilitated a discussion on What can ‘Mission-Led Business’ learn from the world of CSR? and this is the second of two notes on the issue which he wrote as a result and submitted to the review.


As part of our discussion on Mission Led Businesses for the Cabinet Office, at Legal & General on 1 July, I spoke of a matrix of CSR activity. ‘Traditional CSR’ is towards the left and bottom of the matrix and ‘mission-led business’ towards the upper right.

1606 CSR matrixThis chart shows that CSR activity is divided into three qualitative categories and takes place at three different tiers of organisation; the chart is populated with examples of CSR activities though many others exist. (You could argue for more than three levels but three makes my point).

Traditional CSR activity tends to start on the shop floor (bottom left on the chart), with ad hoc fundraising such as Red Nose Day activity, recruiting sponsors for a charity walk or a cake bake. In its simplest form this activity may not involve management at all, unless permission is needed. Successful activity may lead to a broadening of engagement, perhaps into employees organising some voluntary activity between them in their own time, or a slight deepening. That would be perhaps when the employer matches the first number of pounds employees raise voluntarily or, as in the example given, makes payroll giving available. At this stage payroll giving would be independent of any other community engagement strategy.

The three boxes at top left, centre and bottom right all represent a further deepening of the company’s commitment to community engagement, so the CSR activity becomes more meaningful. For example, payroll giving might be actively promoted by management as part of a broader communications and engagement strategy, perhaps favouring a charity with which it shares a common mission or interest (such as construction with Shelter). In the category of Time & Talent employees are given paid time off to volunteer with ‘good causes’, typically up to three days per year, with various levels of organisation and promotion in operation. And Head & Heart comes into play with, at its most basic, a message of care and inclusion through the procurement of fair trade tea, coffee and sugar in the workplace.

At a yet more sophisticated level we see employers nominating key employees to carry out specific good work in the community using their professional skills. This has the effect of both creating capacity in the recipient charity and broadening the skills experience of the employee and the activity is clearly integrated into the mainstream of company operation. Cynics may argue that volunteering in paid time is not volunteering at all: but think of it as the company volunteering its time and skills to the good cause, not the individual.

Often such exercises can have the additional benefit of helping employees develop soft, interpersonal skills where that would be helpful in their work. ‘Sustainable purchases’ would mean that not only were tea and coffee bought with reducing negative impact in mind but cleaning materials and raw materials too, with a view to minimising pollution and environmental damage and maximising sustainability.

The top right hand corner is the pinnacle: all of this social and environmental activity is included in the company’s mainstream operations, and the values and mission of the company are reflected not only in its shop floor and boardroom but also in HR, procurement, transport and supply chain policies. For example, Boots has recently adopted the ‘Drop the Box’ approach to ensure that people with criminal records are not arbitrarily removed from consideration for recruitment – and they insist that companies in their supply chain do likewise. Adoption of Social Value Act criteria across a broad spectrum of activity would be in this box, too.

Finally, the activity that starts in the bottom left of the matrix cannot happen unless a ‘spark’ ignites the idea within the workforce. But the real value to the company comes in the move up the arrow, towards the top right – and this migration cannot happen in a sustainable way without the active and involved leadership of the company’s leaders, informed and guided in turn by their company mission.

This process only works when the company has both a workforce ready to engage and an leadership that is informed and enlightened.

There’s more about this in Chapter 6 of my book ‘Welcome to GoodCo’.

What can ‘Mission-Led Business’ learn from CSR?

On 1 July 2016 the Cabinet Office, in association with Legal & General, hosted an all-day open conversation on the future of ‘mission-led business’ in which Tom participated.  Tom facilitated a discussion on What can ‘Mission-Led Business’ learn from the world of CSR? and this is the first of two notes on the issue which he wrote as a result and submitted to the review.


In 1955 the phrase ‘Corporate Social Responsibility’ first appeared in academic literature and the mid 1970s saw the first despairing claim that the acronym ‘CSR’ had lost its meaning and authenticity.

It’s true, as the CEO of Dollar UK wrote for the CBI’s ‘Great Business Debate’ blog in June 2016  that ‘some cynics still insist that CSR is at best an act of empty corporate philanthropy, and at worst a smokescreen used to hide a multitude of corporate sins’. Mr Howard says that Dollar ‘see CSR as a central function that underpins the ethos of the whole company’ — but surely that should be much more than just encouraging employees to undertake ‘bake sales and sponsored runs’ and allowing them half a day per year of paid volunteering time, as he does? It’s also about being a responsible trader. Dollar is a finance company whose major subsidiary, Money Shop, was last year ordered to return to low income customers £15M which it had not been entitled to take from them. That’s not responsible lending or responsible business. But I know a ‘smokescreen’ when I see one.

Whilst the idea of mission-led business may be relatively new, the concept of designing a business around a social purpose in a way that complements, rather than undermines, conventional ideas of business success is not. The Quaker giants of the 19th century did it and Unilever is doing it now. Society needs the power of responsible business to complement the public and third sectors in their work. But whilst a host of social enterprises, B Corps and others are being created the real challenge is to learn from 60 years of CSR in mainstream business and distil what is good about it; in order to inform the process of retrofitting mainstream business with broad social and environmental missions.

A company’s mission can be wide ranging, encompassing both strict business terms such as ’to provide supportive, non-exploitative personal loans at affordable prices’ (Dollar UK please note); to the eradication of collateral damage, like ’to operate in a carbon-neutral way’. Such a company will come to have ‘responsibility’ running through it like Blackpool Rock in respect of engagement with its employees, customers, environment, neighbours, supply chain and the law. The benefit that accrues from this is ‘purpose’.

When a company has mission and purpose it can create value in qualitative as well as monetary terms. A sense of purpose from engagement with the company mission is known to be linked to greater employee productivity, loyalty and length of service; to reduced sickness time lost and greater informal ambassadorial activity; and to enhancing the company’s reputation.

The person with conscience should not ‘give up’ on business being a force for good, led by its mission. It has to become such, for we will struggle to survive if it isn’t. But the business person should not decline a broader degree of responsibility either: there is a very good, even conventional case which argues that being a business for good makes good business, whilst there is little long term reason to stick with the superficial and optional conventions of rudderless CSR activity alone.

10 Years of Buxton Dome

As the University of Derby celebrates ten years since it moved in to that wonderful building, the Buxton Dome, Tom reflects with the Buxton Advertiser on his contribution to securing it.

160705 ten years of DomeBuxton’s long term economic future was secured by the University’s rescue of the Devonshire Dome, said former MP Tom Levitt, who was instrumental in bringing the project to fruition.

But twice it hung in the balance and he was forced to tour cabinet ministers’ offices and Parliament in late-night lobbying to win support for the ground-breaking idea.

Speaking as the University plans to celebrate ten years since the Buxton campus opened in 2006 Mr Levitt recounted the behind-the-scenes drama which included fighting Whitehall’s ‘kiss of death’ – a referral to the Treasury just two weeks before the deadline.

‘Something had to be done for the local economy’, said Mr Levitt, who was awarded an honorary doctorate by the University in 2011 partly for his role in the project.

‘You can’t just rely on tourism and the Buxton Festival to power the local economy. The University, first of all, is a wonderful use of the building asset but it is also a year-round injection into the local economy. I do this it was absolutely crucial to the economic sustainability of the town.

‘As it is a University it brings prestige with it as well. The Dome was not just saved, it was saved for the people. Anyone can just walk in and there are things going on for the public. It’s not just the architecture and the money but the culture as well.’

But originally the idea was just about a merger between the University and the former High Peak College at Harpur Hill – which nearly didn’t happen.

‘It was one of the first mergers of its kind and was quite ground-breaking,’ said Mr Levitt, who now works as a consultant bringing charities and businesses together.

‘The main reason for the merger was that the Hospitality and Catering courses at High Peak College were world class but weren’t getting access to world markets because it was only a Further Education college.’

The Higher Education minister of the day, Baroness Blackstone, originally turned the merger down but Mr Levitt and the institutions’ two principals at the time spent two hours in her office arguing the case.

‘Tessa Blackstone eventually sighed and said: ‘All right – it’s up to you’.’

‘At that point it wasn’t about using the merger to save the Dome but that soon came up,’ said Mr Levitt.

At first the NHS agreed to sell the building for a peppercorn amount, but for moths there was silence – until the bombshell dropped that the building was going onto the open market.

Mr Levitt led another delegation to Whitehall, asking the the Health Minister Yvette Cooper to slap a public interest condition on the sale – ‘I didn’t even know if that was possible,’ said the ex-MP.

Another reprieve was granted but with a deadline to make the financial package work only weeks away the news came that it would go ahead – if the Treasury agreed.

‘The kiss of death is ending something to the Treasury,’ said Mr Levitt, who cornered the Chief Secretary to the Treasury during a late-night vote in Parliament, spending an hour and a half to convince him to give the green light.

‘Thirty-six hours later he rang to say we’d got it,’ he said.


The Only Way is Ethics

In this article, written as a former Member of Parliament, Tom examines the role of the Parliamentary Contributory Pension Fund, urging it to adopt a more proactive approach to ethical and responsible investing – without the need to sacrifice financial efficiency, and in line with the ongoing campaign of ShareAction and their ‘AGM Army’. The article, together with a reply from PCPF, was published in the summer 2016 issue of Order Order, the magazine of the Association of Former MPs.   

Here is the relevant page: 160610 Order Order PCPF and here is the article:

In the year to June 2015 the American stock market rose by over 7 per cent. That’s good – if you invested in the right stocks. An American teachers’ pension fund recently discovered that, over that year, it had lost $135 million on investments in a basket of oil and gas shares (1). The market has finally discovered climate change – and it’s punishing those who contribute most to it.

The Parliamentary Contributory Pension Fund (PCPF) invests the money that we put aside for our retirement when we were Members of Parliament. Its members know that it’s not an insignificant sum and we trust PCPF trustees, mostly former colleagues, to look after our investments.

One of those is in Shell, the oil giant, whose normally stable share price has fallen by over a third in two years and is now at its lowest since 2010. This raises the question ‘is this a good long term investment?’ But also, in light of the COP21 consensus on global warming, are we happy to invest in hydrocarbons?

‘Ethical’ and ‘responsible’ investing are growing and the UN’s ‘Principles of Responsible Investment’ agency operates out of London. Encouraging guidelines abound too, though implementation by pension funds generally has been slow – despite strong evidence that ethical investment funds can actually produce higher returns than the mainstream (2).

The bulk of institutional investment continues to focus on short term gains, suggesting that the interests of ‘independent’ fund managers are at least as important as the long term benefit of members (you and me).

The Church of England’s pension fund has an ethical perspective. It doesn’t invest its £8 billion assets in companies where more than 10 per cent of activity is military, or more than 25 per cent relates to tobacco, alcohol, high cost lending or human embryonic cloning; or more than 3 per cent is pornography. Other funds rule out companies with child labour in their supply chain and low carbon investment is increasingly favoured.

In 2015 I asked PCPF what ethical guidelines govern investments made on our behalf. Their reply was slightly reassuring: fund managers are instructed to act ‘consistent with [environment, social, governance] principles and in compliance with the [Financial Reporting Council] Stewardship Code’. Although the FRC code is notoriously weak it does require funds to report on the extent of compliance.

When I asked about PCPF policy on investment in carbon, arms and child labour I was told that ‘the Trustees do not currently exclude on ethical grounds any particular companies or sectors which their managers are permitted to invest in’. Why not? Because it would be ‘extremely difficult’ to achieve consensus on moral issues (3). Is this still their position?

Investors are increasingly demonstrating that they can be morally sound whilst maintaining, even enhancing, their fiduciary duty to those whose funds are being invested. Institutional investors are particularly powerful. I would hope that by choosing to demonstrate both social and fiscal responsibility PCPF can optimise both our funds and our futures.

  1. http://www.advisorpartners.com/uploads/4/8/5/3/48535043/350.org_statement.pdf?&utm_medium=email&utm_source=sactionlive&utm_content=3+-+httpwwwadvisorpartnerscomuploads48534853&utm_campaign=ClientEarthLowCarbon&source=ClientEarthLowCarbon

(2) Mercer (June 2015), Investing in a Time of Climate Change.

(3) Personal correspondence, Jan/June 2015

The Case for Mission-Led Business

Here is Tom’s response to the Cabinet Office’s call for evidence for their Mission-Led Business Review:

  1. What do you know about the number and profile of MLBs operating in the UK?

I have no evidence about the number of Mission Led Businesses (MLB); such evidence would be almost impossible to compile accurately as the phrase has no defined meaning and because the degree to which ‘mission’ complements ‘making a profit’ as a business purpose probably varies between 0 and 100% in different companies. What priority does a company have to give its non-pecuniary mission for it to be ‘mission-led’? A company’s non-financial mission may (and probably does) change both in quality and priority as the company matures; and there will always be a financial element to the mission – even if it is simply to remain in business.

A few years ago I conducted research (funded by Joseph Rowntree Foundation) on the way in which SMEs engaged with the local community; about 60 per cent thought that it was legitimate to expect businesses to engage with their communities (i.e. to undertake some degree of social obligation or mission) and only 20 per cent said that business had no obligation to engage with the community (http://sector4focus.co.uk/the-social-sme/). It is interesting to note that when BITC asked these same questions a decade earlier, in 2004, they reached exactly the same conclusion: that most SMEs believed that they could or should be more engaged than they actually were. When I asked why they did not engage more they said it was lack of leadership and advocacy, good practice examples and resources. I would add to this the lack of popular advocacy of a business case and low expectations of charities seeking community partners.

This does not mean that 60% of SMEs are ‘mission-led’ – they are not. But there is a grey area between being led by a mission and acknowledging social responsibilities towards the community and the environment. The profile of MLBs in terms of publicising their social mission is not high enough.

2. What do you know about the impact of being a MLB on business performance and social impact?

There is considerable evidence that socially responsible companies can command brand loyalty and boost sales through an ‘ethical’ or ‘fair trade’ label or a link with a charity (see my book, Welcome to GoodCo). However, the practice of double standards (a ‘green-washed’ appearance masking less than ethical behaviour) can be very damaging. But there are also various pieces of evidence to suggest that responsible businesses are more commercially successful than others:

  • ethical investment funds produce higher long term returns than others
  • the number of investors complying with the UN Principles of Responsible Investment has been growing steadily since its inception in the early years of the millennium – growth which was unaffected by the ‘crash’
  • FTSE companies with active CSR policies consistently show a greater TSR (Total Shareholder Return) than others; those companies showed more resilience to and faster recovery from the post-crash recession
  • companies with a significant element (more than 3%) of employee shareholding (sometimes regarded as an indication of being ‘in touch’ with communities) show a TSR considerably higher than the FTSE index as a whole
  • many newer companies with a specific non-financial mission – those that were created to further the green economy stand out – exhibit greater resilience; new social enterprises have a lower failure rate than new mainstream SMEs.

It is difficult to assess social impact as businesses do not routinely measure it and (under the 2006 Companies Act) only a few companies have an obligation to report on it. It has been observed that there is a link between the level of community engagement (mission) and employee engagement and many companies do measure employee engagement routinely. However, there are other factors affecting employee engagement, so measuring it can only be a proxy for measuring social impact. It has been reported that employees who acknowledge a ‘purpose’ to coming to work over and above earning a wage or creating a service or product are more loyal, productive and reliable than others and act as better informal ambassadors for their companies. That ‘purpose’ need not be associated with the product or service directly but can equate to the company fulfilling an active and positive role in the community.

3. What are the ways that quantitative data on MLBs could be better captured over time?

Why do we need to capture quantitative data on MLBs? ‘MLB’ is very much a self-selecting label: even the title ‘social enterprise’ has a grey area around it… and any definition will need to define what ‘led’ means. Some companies objectively recognised as mission-led do not recognise the definition and some which may claim to be mission-led may not objectively be so…

A case in point would be Natura, the Brazilian cosmetic and toiletries company. It is a for-profit company owned 60% by its founder and 40% by general shareholders and its direct employees are in a profit-sharing scheme. But its mission is defined as ‘well being well’ (Bem estar bem) and as the world’s largest Benefit Corporation it has an employee engagement and environmental record, not east in sourcing products sustainably from the environmentally sensitive Amazon basin, that would match the best. But is it led by profit (which it probably was when it started in 1969), backed up by a fine USP, or is it now genuinely mission-led?

In Britain uptake of the Social Value Act could be regarded as quantitative data. According to Social Enterprise UK one third of local authorities now ‘routinely consider social value in their procurement or commissioning’ (http://www.socialenterprise.org.uk/uploads/files/2016/05/procuringforgood1.pdf) which clearly puts an obligation on some businesses – actual and potential suppliers to those councils – to develop or exhibit a degree of social mission over and above any required by contract. It is doubtful that many of these companies, with the exception of social enterprises, would regard themselves as led by their missions.

4. Why would a business set up as or become an MLB?

To deliver goals associated with a non-financial mission about which they are sufficiently passionate to make a public commitment.

Although there is evidence that MLBs can be more successful than mainstream, profit-motivated but otherwise comparable businesses, I’d hope that the possibility of making bigger profits did not become a motive for choosing a MLB path; the passion and conviction generated by the qualitative mission is the basis of what makes an MLB successful. However, a business that adopts a social mission in order to generate an appropriate marketing angle should be encouraged – but only if that campaign is meaningful, sincere and sustained.

5. How do you see MLBs developing over the next decade?

I will answer this in terms of social enterprises, B Corps, the Social Value Act and other ways.

There is ample evidence that the world of social enterprise will grow, especially where delivery of a social service (either in collaboration with a public service or parallel to it) or an environmental goal is concerned. Amongst social enterprises only a minority have assumed CIC status to date and I don’t expect this proportion to change, though the number of CICs will grow. The labelling of social enterprises as ‘not for profit’ is incorrect: they allow surplus revenue (‘profit’) to be fully utilised or recycled in support of their mission rather than being removed from the company as dividend.

B Corps status was recently relaunched in UK, having been established in USA some 10 years ago. There are still fewer than 100 B Corps in this country but this massively understates the number of ‘for-profit’ companies which have a degree of social mission. There is an element of ‘cult’ status to the B Corp movement but it has a valuable role to play and I suspect that over a decade this community will become a thriving ‘B2B’ operation, a sort of ‘business for good’ club. On the other hand, I don’t expect to see a massive increase in their numbers. (In the USA there exists a complementary legal status of Benefit Corporation but there is no need to develop this legal form in UK as there is no legal obligation here to prioritise the needs of shareholders).

In mainstream business I suspect that the operation of MLBs will grow (even without regulatory or legislative change) but there will be no rush to adopt the MLB label. It will grow because:

  • Examples of good practice in mission-led business practices will grow in number and status (such as the Unilever 10-year sustainability programme) leading to a desire to learn and copy
  • Opportunities to deliver either formerly public services or services complementary to public services will grow but commissioners will (should) be more discerning when awarding contracts, emphasising that providers of such services should exhibit values and missions compatible with the long term delivery of such services
  • The commercial benefits of being associated with a charity or a good cause will continue to attract companies (despite some recent examples of where this may not have worked to best effect, such as E.On/Age UK)
  • In a world of social media and ever closer public scrutiny, the damage to a company’s reputation caused by corporate behaviour that is not socially, environmentally or financially responsible will force changes in behaviour which may then be interpreted as being mission-led
  • SEUK reports that one third of local authorities now utilise the Social Value Act to some extent in moderating and promoting responsible behaviour and community engagement.

Currently the Social Value Act is being actively implemented only in a minority of councils and in different ways. Only in places like Manchester and Birmingham can it now be said that if a  business wishes to do business with the Council it will need to demonstrate a social mission over and above the detailed confines of the tender which they are seeking to win and implement. A recent SEUK report (op.cit.) made four sensible recommendations that would have the effect of encouraging more councils to opt in to using the legislation and make it easier for them to implement it and I support that call.

But why stop there? Some companies already make social value-type demands of businesses in their supply chains and whilst some of these are backed by legislation (action against modern slavery and corruption, for example) others are designed to support brand values – such as no testing of ingredients on animals – yet others are simply exercising a social conscience on behalf of the commissioning company. An example of this would be Boots’ support of the BITC ‘Ban the Box’ campaign, whereby a condition of being a supplier to the corporate is that a business does not arbitrarily discriminate against ex-offenders in its employment practices.

The Social Value Act, as it sits on the statute book, represents an option, in many respects, for local authorities and their private sector suppliers to follow. Social enterprises, which come ready-equipped with a social mission, are well placed to exploit opportunities provided by the Act but its purpose was never intended to exclude the mainstream private sector. Rather, it provides an example which any commissioner of services from a third party could follow and companies should be encouraged to adopt social value principles voluntarily in their own commissioning and supply chains. To complement this, there should be no legislative barrier to any company adopting these principles and practices.

6. What are the practical steps that a business can take to make a commitment to deliver on its intention to have a positive social impact?

Where to start?

  • Adopt a mission, purpose and values which can include and involve the company and its stakeholders and by which the company can be judged
  • Ensure that the above can be justified by a business case (or at least will not be deleterious to the interests of the company)
  • Explore how to engage the workforce better with the mission of the company: convince them that they are there not just to deliver excellent products and services but to be create a responsible corporate citizen, too, a company for which they are proud to work
  • The above may involve becoming a Living Wage Employer and giving greater opportunities for the workforce to influence the management of the company
  • Have a meticulous sourcing and procurement policy in the supply chain, especially when sourcing from countries and environments which are vulnerable or at risk
  • Adopt the principles of the Social Value Act voluntarily (even if the Act does not apply directly to a particular business)
  • Work with local community organisations within the immediate neighbourhood of the company’s base(s) to establish which of their needs the company could help them meet and how
  • Engage the workforce in creating an agenda of how the company could behave more positively towards the environment and community
  • Whilst acknowledging the need to ‘make the books balance’ in the short term, nevertheless adopt longer term perspectives and goals alongside this
  • Where necessary, persuade shareholders of the business case to justify the strategy.

Tomorrow’s Company (http://tomorrowscompany.com) has published a number of reports on aspects of mission, purpose and values in business.

7. Do you think these steps could be better communicated to entrepreneurs and businesses?


Many small entrepreneurs arise spontaneously, which means that discussion of the social purposes of business in either school curricula or business schools may not reach them in their formative years. However, it should be included in both. Business support networks and organisations need to be aware (convinced?) of the business case for including social impact within business purposes.

8. The loss of focus on social and environmental aims has been identified as a potential problem for MLBs (‘mission drift’). When do you think this is most likely to happen? What could be done to prevent this?

Many charities have learned how to protect their missions against the crosswinds of pressures from donors, commissioners and governments – though some have not, and some have thereby suffered damage, not least to their reputations. Businesses, however, are under no such pressure; in fact, the ability to adapt to changing market conditions is seen as a positive virtue. In that sense, ‘mission drift’ is not such a problem for the private sector as it is for the third. It is important for businesses led by a social mission to preserve their mission’s values, to stay in control of their mission, rather than preserve every single activity in aspic. The way a start-up company demonstrates its mission will be different from that adopted by the same company ten years later as it achieves scale; though the arguments in favour of a social mission also dictate that as a company’s business ambitions rise its social impact should, too.

9. Have you identified barriers to new entrepreneurs or well established businesses who want to easily convert their intent to make social impact into a long-term or binding commitment? Please provide details in particular those that may be caused by regulation

There are no insurmountable barriers to developing mission-led SMEs. Although my research shows that time and cost – always major issues for the owner/manager – are perceived as barriers to community engagement by SMEs these are false barriers. Those that have passed through the barrier say that, in retrospect, it is the way one thinks about community engagement which is critical, rather than the time spent thinking about it. And, handled carefully, the costs of such initiatives can be seen as an investment which pays for itself in due course through the business gains from better engaged (and thus more productive) employees, enhanced brand reputation, access to innovation and collaborative working.

The true barriers to MLB in the SME community are attitudinal, caused by lack of information, advocacy and leadership on the issue.

10. What are the barriers to a large corporate becoming a MLB or owning a MLB within its group structure?

There are no insurmountable barriers to developing mission-led corporates, as Unilever has shown. For example, a few years ago Unilever replaced quarterly financial reporting to its shareholders with an annual return. The impact of this was to reduce the influence of short term investors (hedge funds) over the company resulting in a more stable share price. This, in turn, allowed investment and other business decisions to be made for the longer term, a position which is conducive to better environmental policy implementation and the downgrading of the pursuit of shareholder value as the be all and end all of business purpose.

Whilst Unilever was making this decision government ministers were actively considering changing the law to allow companies to abandon quarterly reporting. Yet Unilever had clearly demonstrated that no such change in the law was necessary to achieve this outcome. Again, the real barrier to the development of corporate MLBs is one of leadership both within the business community and within government.

Another attitudinal barrier is risk aversion, which is ironic – as some behaviours associated with being a MLB can actually reduce risk.

11. Do you think MLBs have or should have a different culture / values system to traditional business? Please provide examples.

By definition a MLB will have a different culture from its traditional counterpart. The tools it uses – investment, employment, technology, innovation, production, marketing and the rest – will be the same. Yet because it is led by its mission (rather than led by the need to maximise profits) its culture will balance collaboration with competition, promote inclusion and not subservience, recreate the culture of the family rather than that of the parade ground and take a longer term view of the business environment rather than maximise short term returns at all costs.

12. What challenges do MLBs face when engaging with potential customers, employers and investors about social impact?

I think it is a myth that concern in business is regarded as a sign of weakness, as popular depiction of corporate life might have one believe. People who care for their families, neighbours and communities need not switch those values off between nine and five; however, business people too often behave like Hans Anderson’s Emperor, with few daring to suggest that the new clothes of machismo don’t actually need to be there…

If becoming an MLB involves a complete culture change then issues of credibility will have to be tackled, partly because of the ‘oil tanker’ analogy (it takes a long time to turn round and to do so too fast may sink the ship) and partly because any Damascene conversion is only as good as its marketing!

13. What do you think of the role of certification systems or frameworks in helping MLBs engage with external stakeholders?

Business would prefer a framework to a certification system: frameworks allow ‘wriggle room’, acknowledge indefinite evolutionary change and discourages a pass/fail mentality. Certification also carries the risk of a ‘minimum compliance’ approach (to change so as to comply with regulations but no more).

Although fair trade is a widely recognised system of certification it took many years to become established. Once it took off it was clear that it had shortcomings including, ironically, failure to recognise behaviour that was more advanced than fair trade criteria required – whilst changing the criteria makes it difficult to make longitudinal comparisons. Certification systems like FSC (ethical timber) are now thought to be weaker than they should be. Successes like the Ethical Tea Partnership originated within a specific industry and may have little cross-over potential.

B Corps offer a comprehensive approach to certification but the length and complexity of the process, combined with the fact that certification needs to be reaffirmed every two years, is seen as a disincentive, especially for larger companies (http://bcorporation.uk/b-corps-in-the-uk). Responsible 100 is an alternative emerging system which is much simpler and perhaps better acknowledges business priorities (http://responsible100.com).

The foremost UK framework is Blueprint for Better Business which proposes five principles for business to adopt. It has some high profile mainstream supporters (Grant Thornton, Boots, BT, Unilever) and few detractors (http://www.blueprintforbusiness.org). Worldwide programmes like the Global Compact have suffered from constant revision and have lost some supporters as a result although recently they have commendably decided to align the programme with the Sustainable Development Goals (https://www.unglobalcompact.org). Programmes aimed at narrower audience bases, like the FTSE 4 Good family (http://www.ftse.com/products/indices/FTSE4Good), clearly don’t have universal application and whilst the Sustainable Development Goals (https://sustainabledevelopment.un.org/?menu=1300) aren’t associated with a specific framework or certification system they do lend themselves to approaches like Blueprint.

Trading for Good is neither a framework nor a certification system but is a tool that encourages small businesses to engage with communities and to talk about it (http://www.tradingforgood.co.uk). It is therefore not onerous and because it has no pass/fail criteria there is no downside if a business simply updates their profile regularly.

14. What are best practice examples of social impact measurement and how are they being applied by MLBs?

A number of tools are available to business for measuring their social impact. However, none are widely used or well established – which is not surprising, given that so few companies are obliged to report on their social impact, according to current legislation. Charities, which have had to focus more on social impact measuring and reporting in recent years than in the past, have not evolved any widespread common approach and this is not surprising, either! Small and large organisations have different priorities and no one has yet created a common measure because of the intellectual difficulty in comparing an hour’s volunteering with a gift in kind, an increase in capacity with a carbon saving. There is even a dispute as to whether an hour of employee volunteering should be costed at a commercial rate, at cost or at a standard rate such as the National Living Wage. The London Benchmarking Group has worked commendably to achieve common reporting standards amongst its 100+ commercial members (http://www.lbg-online.net) and these clearly have wider potential application.

Smaller companies could measure their social impact using free tools like Measuring the Good (http://volunteeringmatters.org.uk/employee-volunteering/measuring-the-good-project/).

15. Have you identified specific barriers to the growth of MLBs? Please provide details in particular those that may be caused by regulation

I do not believe that there are any barriers to growth to corporate MLBs which do not exist for other corporates.

16. What do existing MLBs need in terms of support and what do you think can be done to incentivise the creation of more MLBs over the next decade? Who is best placed to do this?

Other than perhaps extending the ambit of the 2006 Companies Act on reporting of social impact I do not see the need for legislative change to support MLBs. Indeed, poor legislation can encourage both an attitude of minimum compliance and resentment of ‘red tape’.

What has been lacking from Government over many years has been a positive adoption of the business case for ‘responsible’ or mission-led business. It has adopted a vaguely pro-CSR position, where CSR is seen as an ‘optional extra’ to business life, coupled with a general encouragement for business to engage more but without a clear idea of with whom and for what purpose. Indeed, a specific Coalition government campaign associated with the Big Society was ‘Every Business Commits’, though it was never clear what businesses were supposed to commit to! It has to be said that the business case for community engagement has never been at the forefront of 30 years of campaigning by Business in the Community, either; they appear to have assumed that it was just a good thing to do.

What MLBs need is encouragement, exhortation, facilitation and the right ‘mood music’. This is not consistent with a ‘predator’ view of big companies and it is not helped by international businesses behaving in ways which are, whilst legal, close to unethical in the public mind (taxation and executive pay levels are cases in point).

If and when the Government does introduce its promised right for employees of larger companies to ask for up to 3 days of annual volunteering leave it is important that this is not a wasted opportunity. If it is used on fundraising, low-skilled activity or team building exercises then it will have been wasted; if it can be focused on raising the capacity of charities, exchanging knowledge and skills between companies and community organisations and delivering a measurable social impact then it will be a step in the right direction and support the goals of mission-led businesses.

ShareAction and refugees at the Astra Zeneca AGM

Here’s Tom’s report of the Astra Zeneca AGM on 29 April 2016, which he attended on behalf of ShareAction. 

‘Companies work and live in the societies they serve’ is a good maxim for corporate giants to remember. It was, word for word, part of the Chair of Astra Zeneca’s board, Leif Johansson’s, response to my question on helping refugees at the company’s AGM in April, 2016.

Representing ShareAction, I asked how the company could best help communities across Europe respond to the current crisis. Could they provide medicines and kit to help organisations serve destitute refugees with nowhere else to turn? Could they recruit appropriately skilled and properly settled refugees into their talent pool? Specifically, would they engage positively with a UNHCR initiative to coordinate corporate responses to the challenge that those fleeing Syria now present?

‘Yes’ was, in short, their answer. The Swedish Chairman stated that Sweden had accepted more refugees per head of population than any other European country to date, and that Astra Zeneca was already involved in initiatives both there and in France. After the meeting I touched base with a couple of senior people before handing over to ShareAction to take the relationship forward – and make sure that the UNHCR invitation gets sent.

Earlier, I’d congratulated the company on adopting the UK Living Wage. Whilst possibly few of their UK workforce needed that boost it was good to see a company make such a commitment just as Government is demanding a lower standard of pay, dignity and engagement than the ‘official’ Living Wage campaign advocates.

Another questioner raised executive pay; later, I voted on ShareAction’s behalf against the doubling of senior executive salaries (which had been endorsed by a previous AGM). The final 5 of the 13 largely technical questions opposed a new research centre in Cambridge where drugs could be tested on animals, also the subject of a two-person demonstration outside the west end hotel where we were meeting.

Astra Zeneca makes a commercial success out of developing a wide range of medicines which modern society needs. That commitment links to a wider appreciation of corporate responsibility which they can afford to discharge positively, not least in helping those who are arriving in Europe in such numbers, fearing for their lives.


A fair society needs fair business

This is the text of Tom’s keynote speech to the ‘Fairness, Sustainability and Wellbeing’ event at Portsmouth Business School, 21 April 2016. Tom was their keynote speaker as part of BITC’s Responsible Business Week.

A fairer society needs fairer business because business is so big, so influential in everything we do – whether we like it or not – so damn powerful that we can’t have a fairer society without business being on board.

If by a fairer society we mean one that rejects self serving behaviour in favour of the common good; one which promotes both the physical and mental health of individuals and the health of communities as political and moral goals; and one which wants to be around in 50 years time,

– then, unless the values of that society and its businesses are aligned, we will fail.

To those who see business as a barrier to achieving such goals, I say: ‘don’t let the Devil have all the best tunes!’

Those tunes, the tools of business, are values-neutral.

They can be used for good or ill: so let’s make sure, as we work for a fairer and more sustainable world, that we use those tools to create public good – and encourage businesses to do the same.

It will be worth their while.

So, does business need a fairer society?

My family all worked in the public sector.

My father was a university lecturer: his passions were theatre, Jane Austen, Beowulf.

My sister’s a serial museum administrator.

And my mother was a social entrepreneur who set up six voluntary organisations.

As a 21-year old poet with a science degree I followed in my mother’s footsteps – as a school teacher and councillor – then I became a Member of Parliament.

In Government in 1997 I believed that the state had the answer to everything.

The relief of poverty required Government to shift wealth and power from those who could live on less towards those who needed more, through taxation and public services.

A safe and sustainable environment needed proper regulation, forcing those that abused people and planet to desist.

And personal fulfilment, democracy and human rights relied on people being free from exploitation by an economic system which saw them as mere pawns.

So business, especially big business, needed to be kept in check by Big Government.

I now believe that fairness, wellbeing and sustainability in society and the environment can – maybe can ONLY – be achieved by business being a force for good.

And that there’s a business case for being a force for good.

Four swords of Damocles hang over mankind:

SLIDE 2 Global issues1604 Social Business Portsmouth2

  • poverty and hunger, essentially issues of fairness and wellbeing;
  • climate change and the depletion of the planet’s natural resources, issues of sustainability.

These great existential challenges have arisen because of the way we managed the earth’s resources over centuries – carbon-based energy, the exploitation of empire, failure to plan the world’s food and water economies – and an increasingly short-termist approach by both business and government.

But allocating blame for these crises is a waste of energy.

Let’s agree: that the world’s 100 biggest economies have had a huge impact on our planet; and that the solutions to these global issues lie in the hands of those same 100 biggest economies.

It’s they who determine the planet’s direction of travel.

In the 1940s those economies were countries, brought together in the United Nations to tackle these problems.

1604 Social Business Portsmouth3But things have changed over 70 years

SLIDE 3 40:60 split

Of the world’s 100 biggest economies today 60 are not countries – but companies.

With globalisation, which is neither inherently bad nor inherently good, those 60 corporates have taken upon themselves, wittingly or not, some responsibility for tackling those four great evils:

  • poverty and hunger, because poverty is the enemy of the market which needs people who can afford to consume goods and services;
  • climate change, because the years of cheap, carbon-based energy are over;
  • and resource depletion, because the inefficient use of valuable resources – from the rare metals demanded by new technology to water itself – can no longer be tolerated.

The world demands a new, circular economy approach to resource management.

SLIDE 4 Development Goals

1604 Social Business Portsmouth4Indeed, the eight Millennium Development Goals, launched in 2000, were very much an agenda for global governments; so much of the content of the 17 Sustainable Development Goals, launched last year to replace the MDGs, is business-focused, reflecting this new balance of power.

There are solutions to all of these issues which the toolbox of business must be used to address.

Such solutions demand coordination and collaboration, qualities in which business lacks experience; thankfully, some international business people are now prepared to take these responsibilities seriously.

Returning to that Levitt family philosophy of the 20th century: responsibility for individual and community wellbeing lay, at least partly, with the public sector.

That’s government, national and local, supplemented by the voluntary sector – people who, freely donating their time and money, allow communities to function:

  • who give support to individuals facing particular disadvantage;
  • and who help salve the conscience of the nation.

Individual responsibility and enterprise were welcome, but those people and communities with the biggest disadvantage needed most help from the state.

Working together, public and voluntary sector provided essential safety nets and talked about ‘hand ups, not handouts’ – but did that work?

Did those facing the greatest disadvantage get the help they needed?

Did their communities become more coherent?

Lifestyles less chaotic?

Approach to risk more realistic?

Was reliance on outside help reduced?

By and large, especially in the most deprived areas, ‘no’.

For example, one adult in six in Britain is too poor to be granted access to conventional banking services.

Let’s consider power.

SLID1604 Social Business Portsmouth5E 5 – Charities

There are about 165,000 registered charities in this country, that’s fewer than 300 per Parliamentary constituency, on average; three quarters have an income under £100,000/year and HALF are run on under £10,000/year.1604 Social Business Portsmouth6

SLIDE 6 – Businesses

There are about 5 million businesses in this country, 7,000 per Parliamentary constituency, of which three million are employers.

Their average turnover is £500,000.

1604 Social Business Portsmouth7SLIDE 7 – £1m per day

Think of one million pounds per day.

It’s the turnover of the world’s fourth largest football club.

It’s the 15th biggest charity (of 165,000), Oxfam.

It’s one large supermarket – not one supermarket company; one large store.

Tesco alone has over 3,000 stores.

Turnover is not a measure of an organisation’s impact on the community.

Turnover tells you very little about an organisation.

But it’s one way to compare charities and companies.

If just one per cent of the turnover of companies was acting as a ‘force for good’, then the collective positive social impact of the private sector would make a real difference…

If we make a business case for ‘doing good’, convincing shareholders, owners, bosses, that doing good would make their company more efficient, create more profit and sales or improve its reputation –

  • then we’d make good itself sustainable and could build it into business models – as 70,000 social enterprises have found.

Then we could make doing good sustainable from a business perspective.

And then, by collaborating with others such as charities, businesses could provide leverage to multiply the ‘good’ they create…

Let me say three things about charities – I’m a trustee of four, including my third role as a national chair.

First: if you ask smaller charities what they most need they’ll probably say ‘money’.

They’re wrong.

They need skills, capacity, social capital – the ability to make money go further, grow sustainably, do more good.

These are skills that business has – and can help charities create.

Secondly, this misunderstanding means that charities approach businesses in the wrong way: they beg for donations when they should be selling a relationship based on mutual benefit.

And thirdly, governments don’t get this, either.

When David Cameron introduces his promised 3 days of volunteering leave for every employee in companies employing over 250 there’s a great danger that opportunities to create capacity through skills transfer will be missed.

This is because employee volunteering infrastructure is weak – there aren’t the opportunities for a massive influx of ‘volunteers’ to do good, so they’ll do what they’ve always done – paint walls, bake cakes or cycle in lycra.

These do not build relationships, deliver new capacity or help charities become financially sustainable.

An Australian bank recently decided to end ‘team volunteering days’.

These were great team building exercises for the company; but the bank concluded that they were ‘damaging their reputation’.

Such days started well, with productive morning exercises, but after long lunch times with the traditional consumption of Aussie ‘amber nectar’ those who did return for the afternoon were, let’s say, not operating at maximum efficiency…

What does doing good in business look like?

Fairness, Wellbeing and Sustainability

The most quoted recent example of the fairness agenda is corporate taxation.

I simply say: ‘Google’.

And ‘well done’ to Facebook for anticipating a change in the law that’ll  stop the arbitrary offshoring of profit centres within the EU – in their case routing UK trade through Dublin where corporation tax is lower.

Multinationals do this because they can – when their values are inadequate to stop them.

I heard a swingeing attack on such international corporates:

‘We pay our UK tax on what we earn here,’ he said, ‘why don’t you?’

This was the then chairman of BT, putting the case for fairness because unfair practice makes all businesses look bad in the public eye.

It sows division between the conscientious and those so fickle as to divorce themselves from the culture in which they grew – by going wherever short term gain takes them.

The average salary of a FTSE100 CEO in Britain in 2016 is £4.96 million – 400 times that of their average employee – yet studies suggest that this multiple is many times greater than what’s needed to incentivise business leaders to improve performance: it’s a waste of money.

The optimum ratio to promote efficiency, motivation and team ethos is thought to be between 15 and 20.

The 400 multiple is both obscene and counter-productive, alienating stakeholders and customers and leading to unforeseen consequences.

It’s hardly ‘we’re all in this together’.

Here’s another example of lack of fairness:

Slide 9 – BrightHouse and Fair For You

1604 Social Business Portsmouth9BrightHouse is a company that allows people on very low incomes to purchase washing machines when they have no access to mainstream credit – cash, overdraft, loan finance or credit card.

Such a machine might cost £10 per week, which is cheaper than a launderette (if you have three children).

But do you really want to pay £10 per week for three years?

£1,500 for a washing machine that costs £250 in Curry’s?

Hundreds of thousands of people have no choice… trapped by ‘the poverty premium’.

That’s why some of us set up Fair For You, a social enterprise owned by a charity: to lend to people to whom others will not lend fairly.

In this example we charge £7 per week for one year, saving the customer over £1,000 on that BrightHouse washing machine.

Fairness is sustainable.

Fairness wins friends.

Fairness is at the heart of ‘shared value’, the business philosophy coined by Michael Porter in 2011, the idea that business works best when it’s based on ‘win:win’.


Fairness, Wellbeing and Sustainability

Staying with indebtedness, the average employee misses work for three days a year for debt-related reasons.

Some of that’s time spent sorting out debts, paying bills.

But largely it’s a smaller number of employees taking significant amounts of leave through stress-related illness caused by indebtedness: victims of exploitation, personal catastrophe, negative equity.

Unplanned ‘time off’ is a huge burden to employers: zero productivity, disruption to routine and often extra costs.

Should employers make financial advice – even responsible, low cost loans – available to employees?

It would reduce unplanned time off and make employees feel more wanted, and that’s good for the business.

Over the years we’ve raised productivity through improving work-related health and reducing days lost through industrial unrest.

Now’s the time to invest in wellbeing – to generate sustainable productivity gains for employers, better life quality for employees and lower demands on public services.

Poverty pay damages wellbeing: working long hours in multiple part time jobs creates stress and low self worth as people fail, in their own eyes, to provide for their families.

Paying a Living Wage – a proper Living Wage, not a Government smoke screen – is not just a financial decision.

It reduces employee stress.

It enhances the esteem in which employees hold their employers.

Volunteering does the same: we know that people who volunteer suffer less from stress and loneliness; we know that the chemicals produced in the brains of volunteers are the same as those we create when having sex – or eating chocolate.

A young woman in Manchester found herself running her ailing father’s steel stockholder company with six middle aged, male employees.

Come Christmas the charities came with their hands out: ‘No,’ she said, ‘Go away – anyway, how can a steel stockholder help?’

Then one person asked her for material to repair a storm-damaged fence at a children’s nursery.

‘Take this lot,’ she said, ‘I could do with the space.’

An employee overheard and said ‘Me and my mate aren’t doing anything on Saturday, we’ll come and mend it for you.’

On the Monday he said ‘Boss, that was great – what can we do next?’

I met the woman when she addressed 60 small businesses, speaking in public for the first time in her life.

She said:

‘That weekend changed my company for the better. It made it a better place to be, gave people another reason for coming to work.

‘Since then we go looking for things we can do to help in the community.’

So employee wellbeing is not just about health or money, it’s about purpose; it’s about employee engagement.

Engagement – created more effectively, by the way, by utilising work-related skills in a good cause than by any number of cake bakes – is linked to greater motivation at work, greater productivity (again!), less time off sick and greater informal ambassadorial activity by employees.

There’s therefore a business case for promoting employee wellbeing – and those employers who go further, making canteen food more healthy, creating communities around payroll giving and encouraging fitness through subsidised gym membership – also reap what they sow.

Fairness, Wellbeing and Sustainability

Finally, sustainability.

A hundred years ago the owners of family firms had a common goal: to hand on to their children a company in at least as good condition as that which they’d inherited from their forefathers.

We’ve lost that generational perspective.

Families no longer run bigger companies as they used to.

Share ownership has become a transaction and not a commitment.

Most shares are now owned by institutions, not individuals.

The typical time a share is owned before being sold has fallen from years to months.

Now it is often not minutes but seconds.

And the average tenure of a FTSE chief executive has fallen from 7 years to five in the last decade alone.

There are exceptions: look at Wates, the construction company – promoting social enterprise, basic skills, community cohesion and prisoner rehabilitation.

It’s owned by a family trust which sets a generational perspective for the company.

Take climate change: companies spend millions combating, adapting to and mitigating climate change.

Yes, if you invest in green technology it will cost your company money – in the short term.

In the long term that investment could more than pay for itself, but if you can’t see beyond the year-end you’re never going to make the changes necessary to help save the planet, let alone save your business.

If a year is a long time in business: three months is too short.

Why on earth do companies and investors insist on quarterly reporting?

Since Unilever abandoned the practice, in favour of annual, the proportion of its shares owned by short termist hedge funds has halved and its share price has become more stable, allowing the company to better plan its investments for the future.

Unilever is one of the world’s biggest companies, delivering a ten-year Sustainability programme for zero waste going to landfill and zero carbon footprint, champion of the Sustainable Development Goals and a lot more – creating a circular, shared value economy.

Embodying the business case for sustainability.

I think that business has three duties, made up of six responsibilities.

SLIDE 12 Duties and responsibilities1604 Social Business Portsmouth12

The first two responsibilities make up the ‘internal duty’, the duty to the company itself.

You can’t survive without making money, said Milton Friedman, nor without creating something that the market wants, said Adam Smith.

Every business would agree with them.

The ‘external duty’ is a duty to stakeholders; it’s about fairness and wellbeing – addressing the legitimate needs of employees, customers, the supply chain – and contributing to the workings of the state.

Business provides almost half of government revenue directly and much of the rest indirectly.

We know that a responsible approach to taxation is a hallmark of a responsible company.

There are global duties too: to future sustainability, which is more than just environmental, though climate change is at the heart of it – and to your neighbours.

A ‘company citizen’ is concerned about the physical and community environment in which it dwells and it behaves collaboratively, supporting its neighbours in need, collectively and as individuals.

Most companies have moved on from the bare bones of Friedman and Smith; most have taken on board those external duties – to some extent.

But few have really seen the business opportunities that committing to the global values of future and community can bring – not just ticking CSR boxes or pursuing a green fad – but making money out of investment in the future and the greater productivity that, as we’ve seen, having a fully engaged and purposeful workforce brings.

That’s the business case for being a force for good.

The Government recently announced an enquiry into the role of mission-led business.

It must be wide ranging, not simply confined to the wrongly-named ‘not for profit’ sector.

I commend to the enquiry the work of Tomorrow’s Company.

They’ve concluded that purpose, missions and values, supported by appropriate structures, are vital to any business seeking to be both a good business and a business doing good.

We’ve seen these values espoused –

  • by George Cadbury, over 100 years ago – ‘I would not want my workers to live where a rose cannot grow’
  • by the inspirational leadership of Paul Polman and Unilever today, helping to eradicate waterborne disease in children
  • by Wates, Boots, Jaguar Land Rover, Ben & Jerry’s, Adnams Brewery, McQuarie Bank, Timpsons, Andrews the estate agents and many more…

I hope the study isn’t confined to corporates but includes the vast majority of business, SMEs, which I’ve studied at length – but about which there’s no time to speak today!

Committing a business to being a force for good isn’t an easy option.

It involves strategies, actions, leadership and cooperation, not just words – but it makes business sense.

Above all Government, charities and communities alone cannot construct the wholesome, dignified, stable society that we need to collectively fight those four evils – poverty, hunger, climate change and resource depletion.

It’s not choice that leads me to conclude that we must work with businesses and encourage them to become forces for good: we have no choice.

Although my parents weren’t around to read my book, Welcome to GoodCo, I think they would’ve been convinced by my stories.

Certainly my daughter is trying to live those values both inside her workplace and outside it.

And if she, as a banker, can do that – we all can!


Getting to know you!

Tom will be featured in the May edition of the newsletter of the Association of Chairs, the body representing people who chair charity trustee boards. Here’s a sneak preview of what the bio piece will say…


I chair the charity Fair For You (www.fairforyou.org.uk). We’re just a few months old: if you don’t live in a deprived community, where poor people pay through the nose for credit, you might not have heard of us. But if you care about defeating poverty then you ought to!

Ffy Stock Tom SMALLESTFair For You charity owns Fair For You Enterprise, a community interest company and registered lender. We help those who can’t get finance from banks, credit cards or even credit unions to buy life’s necessities – washing machine, bed, fridge – to live with dignity. Typically on a single £250 High Street-branded washing machine we’ll save that family £1,000 – yes, £1,000 – compared to some of the bigger rent-to-own merchants. Take a look – www.fairforyou.co.uk.

I spent much of 2015 working with our founder/CEO, Angela Clements, a former banker and credit union boss with a passion for lending, creating the twin organisations. We raised £1 million of start-up funds from social investors. Now we’re up and running and it’s so exciting! Our first social impact report, after just two months, shows we’ve already saved our customers a quarter of a million pounds and brought respect to their lives through high customer service values.

That’s why I do it. But why as Chair?

Fair For You is my fourth major charity trustee position, my third as chair. It started by being headhunted for RNID’s board (1998-2003) when I was a rookie Member of Parliament. Then I was appointed to chair the late, lamented Community Development Foundation (2004-10). I must’ve got the knack, because after leaving Parliament in 2010 I was headhunted again, to chair Concern Worldwide (UK) (2011-14); and today I’ve got a couple of lower profile trusteeships also.

During 13 years as an MP I was Parliament’s ‘go to’ person for charities on charity issues: not about their missions, as each had their own champions, but about what being a charity meant. I chaired the All Party Group on Civil Society (formerly ‘Volunteering and Charities’) for over ten years and was a member of the Neuberger Commission on the Future of Volunteering (2007-08).

I like having influence and seeing good done. I like representing organisations that work well. I’ve always taken pride, as Chair, in the quality of my relationship with my CEO, which has always been about respect and support for each other’s roles – though no two charities feel the same.

Today my day job is consultancy, ‘using the tools of business to create public good’. I work with big corporates, SMEs, charities, public sector and others. I’m a non-exec director of three companies, too. I’ve written two books about my work and later this year another chair will come my way: of an Ella Forum (www.ella-forums.org). There are over 20 such groups which each bring together a dozen leaders of smaller charities in self-help, professional development caucuses devoted to mutual support. Watch out!