Business doing good is doing good business

Tom spoke to a gathering of London Futurists at Birkbeck College, London, in September 2017. His theme – Why Business Doing Good is Doing Good Business – very much pre-empts The Company Citizen which will be published late in 2017.

This half hour video includes a 20-minute presentation followed by a Q&A. (Scroll down to the third presentation).

The talk complements a chapter Tom wrote for Derek Bates’ book ‘Agenda for the Future’, also published in September. Here’s that chapter:

The Case for the Company Citizen

Society needs ‘company citizens’ to be better engaged in our communities: fortunately, it’s in business’ interests to pursue the same agenda. However ‘better’ shouldn’t mean ‘more of the same’: rather business needs to rethink its role in society, at local and national levels.

There are moral, political and business cases for this change and pioneers from whom aspiring businesses can learn. There’s also a global framework for such activity – the United Nations’ Sustainable Development Goals – and ample evidence in localities across the world that engagement works in the interests of the companies, beneficiaries and nations.

The moral case

The moral case is that those who exercise power should do so responsibly, not simply to mitigate any negative impact of their activity on society or the environment but in a socially positive way. This collaborative spirit drove the formation of the United Nations, bringing together the world’s economic and political powers – 20 nations in 1939, over 50 by 1945 and 193 today. An early associate, from 1946, was the International Labor Organisation – whose mission to promote a human dimension to business practices dates from 1919.

That the UN is the principal voice of moral authority on a global scale is beyond question even if its impact may have underwhelmed on occasion. In 2000 it established 8 global Millennium Development Goals, based on ideas of community, fairness, dignity and basic rights, and surprising no one.

The MDGs set 15-year targets but their successor programme, the Sustainable Development Goals, are subtly different in that they challenge not just governments and communities but also businesses to ‘walk the walk’. By adding Goals on energy use, clean environments and the better management of (industrial) raw materials business has been irretrievably implicated in their implementation.

That moral charge on business, to accept some responsibility for achieving these UN goals, based on universal values, is supported by a stark statistic: 60 of the world’s 100 largest economies are no longer countries but businesses. How different is the 21st century from the mid-20th!

Whatever the countries of the world decide to do together, through UN conventions, the Paris Climate Change Agreement or other accords, they will not achieve their goals unless business is on board. Where once it was enough for business to co-exist with global society, not standing in its way, today the SDGs, the embodiment of decency, sustainability and fairness, absolutely rely on the active involvement of the corporate sector. This is a challenge that global company citizen pioneers like Unilever have taken up with relish.

People regard paying fair levels of tax as a moral duty and they do not understand why, on their modest incomes, they’re contributing more tax than some major multinationals which pay none, despite trading here. Nor do they accept that even top business leaders need to be paid so much more than the most accountable person in the country, the Prime Minister: shareholder revolts on top pay packages are becoming commonplace. For the first time in half a century business spending on dividends is growing at the expense of employee pay and people are naturally suspicious that companies who arbitrarily headquarter themselves offshore are ‘up to no good’. That the cost of a business’ ‘licence to operate’ is partly measured in moral terms has never been more true.

There’s an old saying ‘if you’re not with us, you’re against us’. As we explore the (small ‘p’) politics and the practicality of the case for greater business engagement with society, that case for engagement will be seen to apply as much in local communities – if not more – as on the global stage.

The political case

Britain is one of the world’s most generous countries. Charitable giving, volunteering and corporate philanthropy are all at a high, if static, level. Over the last 60 years a growing and increasingly professional voluntary sector, in particular, has shared with government and public sector the responsibility for delivering services which meet people’s basic and other needs. Recently a number of trends have challenged the dynamics of cross-sector relationships: ‘outsourcing’ of services has proved controversial; commissioning practices may have perverted charity missions and encouraged dependency on government funding; poor privatisation practice has allowed questionable profits to be made whilst reducing the accountability (and sometimes the quality) of such services.

On the other hand, there’s no doubt that cross sector partnerships can increase the qualitative value of services and that business efficiency can make them more effective (and even cost effective). Although these positive virtues are not guaranteed, cross sector working is here to stay. Indeed, we have seen businesses and charities voluntarily come together to work collaboratively without the need for fine print in a government contract.

A decision to outsource to a ‘for profit’, or an inaccurately labelled ‘not for profit’, company is a question not of economics but of values. Southern Cross was a private equity-owned company which grew to be Britain’s largest private provider of care home beds before its spectacular collapse in 2011, when it lost 98 per cent of its share value. The oft-quoted example is a case in point. How, it is asked, can a company whose mission is the maximisation of short term profit be trusted with the care of frail and vulnerable people? That is not to say that a ‘for-profit’ company with a different ethos and more nuanced values cannot be trusted with such a duty; is that really so different from a body with overtly social values which employs business tools to attain them?

This blurring of historic sector boundaries is permanent. So, it appears, are government austerity and its consequences, public spending cuts, the dependency of the third sector on government funds and the flatlining of charity income in the face of growing demand on their services. So are rising levels of inequality and the ‘poverty premium’, the phenomenon whereby elements of the cost of living are actually higher for the poor than for the rich. Official figures show more people in working poverty than ever before, despite legislation on low pay, and they’re employed disproportionately in the private sector.

It’s no surprise, therefore, that the poorest communities are often becoming, literally, more hopeless. Those least able to afford it have borne the brunt of spending cuts. This is a political reality in which it’s not for business to take sides, as all politicians are committed to helping the country achieve stability in a sustainable way, according to their vision of what is fair and possible, following that global financial crash. Aren’t they?

But neither can business stand idly by. The economic case for being involved in the relief of poverty is that poor people are poor consumers, a challenge central to the ‘shared value’ philosophy of Michael Porter. So too are sick people, and those who are isolated – geographically, digitally and socially. Those who lack dignity often lack capacity. Employees who are sick, stressed and unfulfilled are suboptimal performers – factors which will be influenced by the world outside the workplace. There’s also a business case for engaging with the community, to which we will return, but the political case is summed up by the concept of the ‘Company Citizen’.

A Company Citizen, like any other, cares for the welfare of fellow citizens; works with them to address common issues in the community; is generous with their time, skills and other resources. The Company Citizen is actively engaged, not in Party politics but in lobbying for what is right and helping mitigate what is wrong.

And yet in the most deprived areas there are fewer employers, even SMEs, compared to slightly more affluent areas. Ironically, research shows that those communities have fewer successful voluntary sector organisations too: they lack the social capital necessary to cope with poverty and social exclusion, withstand ongoing economic shock, even to organise at a basic level. Where business is absent, how can the Company Citizen help?

Community organisations are the key. Ask them what they most need and they will probably say money, but it’s not true. They need skills: skills to plan their operations, to strategise, to lobby, to even provide for themselves through sharing. These are essentially business skills that can be given away by a company at no cost, in the course of an ongoing and committed relationship with a community. Get these skills right and whilst the money won’t necessarily look after itself at least it will go further. Better still, skills transfer is a two way street and workers will become better employees, better people, through their involvement.

According to a 2016 report by Social Enterprise UK, one third of local authorities have chosen to implement the 2012 Social Value Act. This says that in commissioning the supply of services over a certain value a council may insist that bidders demonstrate positive values towards the community and the environment: reducing carbon footprint, increasing apprenticeship levels, encouraging employee volunteering and more. In Manchester and Birmingham the councils apply these values to all of their tendering for goods and services and can demonstrate benefits for the community as a result. In those cities a business that wants to trade with the council has to be a Company Citizen.

The business case

The business case for philanthropy per se is minimal. Philanthropy is too often regarded as donor-focused and paying little heed to the long term impact of the funded project. Many businesses give big sums from corporate coffers to charity as a matter of course, boast about it then forget it: currently £6 billion per year. This not insignificant sum is, of course, welcome but could be utilised better, as more sophisticated corporate donors are discovering. Philanthropy can undoubtedly enhance reputations but this falls apart when a company acts in ways which undermine the values associated with their philanthropic gestures. This is called ’greenwashing’.

Many community engagement activities are more sustainable than simply writing cheques:

  • employer supported volunteering can transfer, boost and extend employee skills
  • a business with value-led purposes better engages its employees
  • a values-led, ethical and sustainable supply chain creates a broader community and enhances reputation
  • employee-generated ideas can reduce carbon footprint and promote innovation and effectiveness.

An engaged employee is more productive and loyal than others; stays in post longer, reducing recruitment costs; and is a better informal ambassador. A company with CSR or ESG values integrated into its mainstream activity recruits a higher calibre of graduates, especially amongst millennials; and let’s not forget the marketing benefits of the best charity partnerships, too, like Boots with Macmillan Cancer Care.

SME start-ups with a social primary purpose, so-called social enterprises, have a lower failure rate than others. On a global scale investments in ‘ethical’ or ‘responsible’ causes produce higher long term returns than do mainstream FTSE indices.

A conventional business case in a new environment.


In the 18th century Adam Smith argued that a business could only sell what someone would buy and in the 1930s Milton Friedman argued that making a profit was the primary purpose of business. Essentially, both are correct: without a return on investment any business will fail and a company trying to sell a product that no-one wants is also doomed. But these are inward-looking values which don’t completely reflect today’s complex business world which, while not perfect, is in a state of flux.

That’s because over recent generations an appreciation has emerged of the external responsibilities that business has to all of its stakeholders – employees, customers, suppliers – and not just to its owners. Citizens accept that paying tax is both a moral obligation we all have to help those worse off than ourselves and the price tag of that ‘licence to operate’, so tax avoidance and evasion are increasingly frowned upon. Clearly not all companies agree; but contributing fairly through taxation is surely a hallmark of citizenship.

Most companies accept the stakeholder argument and would not dream of bending regulations to suit their own gains or, even worse, risk being discovered doing so – but the ‘external duty’ of company citizenship is not yet universally adopted.

Still fewer are the companies that adopt a philosophically global approach to citizenship. One of the two responsibilities enshrined in this duty is from history: it’s to the future. In the era of family-owned firms companies were driven by the desire to hand a thriving business over to the owner’s children. That generational perspective has been lost and short term thinking has come to dominate business practice: witness the shrinking time spans of share ownership and CEO tenure, the growth of impatient venture capital, the use of quarterly reporting and aspects of the bonus culture.

Let’s return to the positions of business and charity relative to each other. Britain has 5 million companies, 99% of which employ fewer than 250 workers and 2 million employ no one at all (witness the veritable army of self employed). The average company has an annual turnover of £500,000 whilst the biggest are mind-bogglingly large: a single supermarket superstore can turn over a million pounds each day, the same as the charity, Oxfam.

Of 180,000 registered charities in Britain only 14 have a bigger turnover than Oxfam. 80% turn over less than £100,000 per year and half have an income of under £10,000. So big are the biggest charities that charities’ combined turnover is £70Bn and average income is £400,000.

The American company Salesforce employs an ‘integrated philanthropy’ model, giving to charities roughly 1% of their turnover and time. If every company did the same this could generate £25Bn of value in Britain for charities (some of which is, of course, already available).

If we assume that each charity is not 1% but 75% effective, interpreting 75% of turnover as social impact – which may be generous – we find that they create £53Bn-worth of impact. In other words, 100% of charity effort at 75% efficiency delivers only twice the social impact that 1% of business effort could, if it was pointed in their direction.

Salesforce targets charities which are supported by either the company or its employees, to create new capacity. Now, if all of that 1% of business turnover, across Britain, representing the creativity, impact and passion of businesses were focused on increasing the impact, efficiency and effectiveness of charities and the good that they can do…

Our poorest communities are in crisis. They feel ignored, excluded, exploited. They lack the social capital that a vibrant voluntary sector creates – which is why the otherwise worthy concept of David Cameron’s Big Society was always doomed to fail where it really mattered. Business can make the difference, partnering with others in the voluntary and public sectors, but only if it adopts the garb and practices of Company Citizenship. In doing so they will find they become better places to work, better at what they do – and better citizens.


We need to invest in active citizens

Tom’s post – If we want active citizens we need to invest in the skills of citizenship – appeared on the blog page of Civil Society Futures in September 2017.


Citizenship’s a wonderful thing. The very word empowers; it places identity on a plane above being a mere consumer of goods and services, a statistic or a ‘subject’ whose will is subjugated to that of some higher rank. It’s also a collective concept – citizens together – which, being inclusive, confers dignity.

But it’s also too often an abstract concept, along with the rights and responsibilities which attend it, absent from the vocabulary of those ‘just about managing’ or downright struggling. In those communities where qualifications, opportunities and confidence are low ‘citizenship values’ are too often not even of academic interest.

As a Member of Parliament I used to represent over 20 local authority wards, of which one was in the 5 per cent most deprived in the land and two more in the bottom ten per cent. In that most deprived ward disability and other benefits were the largest source of household income. Other deprivation-linked metrics – obesity, smoking, failure to breast feed, low educational attainment – were the worst in the county. The social housing estate at the heart of the ward was purpose-built; that purpose being (in the early 60s) to complement inner city slum clearance by hiding the community on a greenfield site away from established centres of population.

When a colleague from a solid working class seat said that there was ‘no tradition’ of advice surgeries in his patch, and his office received far fewer letters than mine, I plotted on a map the addresses of constituents who’d approached me for advice. Those from communities in most need, I saw, were least likely to contact their MP. My first thought was that the ability to describe difficult concepts in written English, a great tool of engaged citizenship, is often lacking in deprived areas.

To this day this isn’t an issue of native language. This community was (and is) mostly white and English-speaking; many of whom, on rare forays into writing paragraphs, would be embarrassed, shamed or let down by their inability to communicate – and they knew it. Needless to say, their understanding of democracy was, let’s say, ‘incomplete’. Their analysis of their community’s problems was perceptive but their ambitions for putting things right were limited. They had little faith in the ‘powers that be’; they weren’t active citizens – other than occasionally collaborating with neighbours where need or common interest and capacity allowed.

On that estate of 1,600 homes public services did exist: a doctor, a community centre, a nursery, primary school and library. The private sector consisted of four small shops and two pubs (one of which has since closed) and many of those employed there lived elsewhere; there was no local employment to speak of, nowhere to build skills, create useful experience, develop team working or create a sense of achievement. Business is largely absent from deprived areas – so too (as IPPR North has pointed out) is voluntary sector infrastructure.

In short, it’s as though citizenship had been designed out of the estate.

After generations of status quo classes C2DE, who live on such estates, are stirring – but not in a good way. Low electoral turnout, reflecting a genuine lack of engagement, is commonplace in such wards. When they do vote they tend to vote Labour. Or do they? The 2017 general election saw a massive 12 per cent swing to the Conservatives amongst C2DEs even though it was they who’d borne the brunt of seven years of austerity, falling buying power, benefit and service cuts. It was an ‘against’ vote, against the party which purported to represent their own interests – and (being in Opposition) had failed to improve them. In 2016 a bare majority of Britain voted for Brexit. Even Brexit supporters acknowledge that many of them voted not for ‘a new role in the world’ but against the establishment generally, officialdom, ‘them’ or just to protest the lot they had been cast in life. ‘Europe’ was a bogeyman. It’s no coincidence that the strongest correlation with voting in the referendum was with educational background: those with fewer qualifications were much more likely to vote ‘leave’.

When we talk of citizens collaborating to complement, extend or even replace public sector provision or private utilities – perhaps as an energy-purchasing consortium or simply for their own fulfilment and enjoyment – we’re generally talking of communities led by the middle class. In such places organisational skills are commonplace and resources are bestowed upon resourceful people. The language spoken has a different cultural context than on the deprived estate: it’s richer, more expressive, a more useful tool. Rational concepts like risk or consequences of actions are freely employed in planning and decision-making, fields in which the middle class have more experience. In short, whilst both working and middle class areas might appear to be dormitories their skills, capacities, confidence and ambitions are poles apart.

Citizenship isn’t just a matter of one’s relationship to a community or a social hierarchy, nor simply a measure of participation – but also of values. It reflects access to social capital, communication skills and the wherewithal, physically and intellectually, to work both collectively and with outsiders to achieve change. Culture and values cannot be imposed from without but do need feeding, nurturing, promoting. Empowerment and engagement cannot be created overnight.

Many today believe that our society must change in a way which is more devolved, more locally provided for than at present, and so it must; the era of ‘big is beautiful’ in public services is over. However, simply passing responsibility down the line assumes levels of citizenship capacity at the grass roots which the most needy communities simply cannot deliver. Three things are needed to create community confidence in such places:

  • Basic skills, especially literacy, need to be prioritised as never before, in both children and adults.
  • Brave decisions from Government and local authorities to share power – even give it away – to local communities; a long term, phased, organic process not driven by some arbitrary timetable.
  • Investment in early intervention in education, health and welfare (when programmes such as Sure Start are cancelled progress is not just ended but reversed).

Even Britons who share a common language are today far from equal in what they are able to achieve. For stability, security and shared prosperity this must be addressed; otherwise those who struggle today will be left even further behind.

Britain’s ‘voluntary’ overtime crisis

Far from being overpaid, public sector employees are showing their commitment to their cause, voluntarily, to a level which borders on exploitation, writes Tom Levitt (for Progress Online, 25 July 2017)

When Sally Plummer stayed on after the end of her shift to aid a patient suffering a cardiac arrest she thought little of it, knowing that this was the normal reaction of a conscientious nurse. When her good deed generated an £80 fine for overstaying in the hospital car park, which the authorities refused to waive, she saw red – and quit her job.

Perhaps Plummer’s was an extreme reaction but to two million public sector employees who contribute 8 hours a week of ‘voluntary’ (i.e. unpaid) overtime the dilemma is a recurring one. If your contract doesn’t stipulate the terms of any overtime or your extra contribution is not specifically endorsed by management then your excess hours won’t be paid. In this way public bodies, especially health and education, benefit from an £11Bn contribution of unpaid work from staff, often exceeding 8 hours a week, according to the GMB union.

This means that some workers aren’t being paid for up to a quarter of their working week, with 15 hours of unpaid overtime not uncommon. Excessive hours, say teachers’ unions, are a principal reason why many leave the profession.

Earlier this year the TUC reported that across the whole economy employers were benefitting from £33.6Bn-worth of unpaid work. Low and higher paid alike were affected, with London being the UK region where most employees – over a quarter – regularly worked some unpaid hours.

They proclaimed 24th February ‘Work Your Proper Hours Day’ as it represented that fraction of the year which workers collectively were contributing to work for free. On that day employees were encouraged to take their full breaks entitlement and leave for home on time. Frances Grady said “The best bosses understand that a long-hours culture doesn’t get good results. So we’re asking managers to set an example by leaving on time too.”

Pressure to work unpaid extra hours is often covert: those in caring professions like Plummer understandably don’t want to leave a client ‘in the lurch’; when long hours becomes part of the culture it becomes difficult to resist.

Even where unpaid overtime is anticipated (yes, such contracts exist) the result of doing it cannot reduce your average wage below the hourly minimum rate and nor can you be obliged to exceed the legal 48-hour maximum week. This was the judgment in a case brought by Unite in the European Court of Justice. Should Brexit actually happen the Working Time Directive would transfer to UK law – but for how long would its protection last? It would be relatively easy for a future UK government, one not sympathetic to workers’ rights, to water down the directive once outside the protection of the European Union.

The reality is that public sector budgets in particular are not going to be stretched or extended to reward those currently unpaid hours. Caring professionals, whose official pay over recent years has been static or even fallen, will find themselves obliged to make difficult decisions about their work/life balance; those who decide to keep their ‘voluntary work’ to a minimum may render themselves vulnerable to managers who question their commitment when cuts are on the agenda.

The real challenge here is for managers: to maintain the ethos and effectiveness of the service they run whilst engaging their employees to the full and genuinely making them feel valued – within existing budgets. They must cut their coats according to their cloth, as the saying goes. Today, far from being overpaid – Philip Hammond, take note – public sector employees are showing their commitment to their cause, voluntarily, to a level which borders on exploitation.

Further Reflections on the General Election

A few days after the election a colleague tweeted:

“Rise in support for Corbyn, Sanders & other movements tells us… people are open to big narratives about structural change” #systemschange

The reason I don’t think this is true, even though the respected economist Stephanie Flanders said the same thing to the RSA after the Brexit vote, is as follows.

Brexit, Trump, Saunders, Netherlands, Austria (first time round) were all examples of people voting principally for candidates defined by what they opposed, usually ‘the establishment’; they were not votes in favour of a particular ideology or plan. So too the election and re-election of Corbyn within the Labour Party – brought about not least by frustration from some Party stalwarts and ideological support from newer, inexperienced and predominantly young members. In its own way Macron’s vote in France was negative too, rejecting both traditional parties as well as the obvious (and established) FN ‘protest’ option; though En Marche’s subsequent Parliamentary vote has set course for a positive way forward. The problem with installing a government on the basis that they oppose what you oppose is that you have no yardstick by which to judge success – who do you vote for when they disappoint? That way anarchy lies.

I was talking to arch-Brexiteer Daniel Hannan earlier in the year: I said that everyone who supported ‘Remain’ knew what they wanted the world to look like in the weeks after the vote, whilst barely no two Brexiteers could agree on their vision of life in or out of Europe – and he agreed. Research shows that although many people who voted Brexit (overwhelmingly the less well educated) had no vision: they were voting ‘against’ the establishment both for conventional, rational reasons but also through anti-foreigner, anti-establishment, even anti-Green and anti-feminist sentiments. There was no coherence to the Brexit ‘movement’ other than around what it was – and is – against.

On June 8th in the UK election we saw exactly the same happening, not on a national scale but on a local one:

– In Scotland there was a swing against the majority party (the fact that both Con and Lab benefited from this suggests it was an anti-SNP/anti-independence swing, not a pro-Lab or pro-Con one)

– In England (apart from London and the North West) there was an ‘anti-the-party-of-my-local-MP’ swing – big anti-Labour swings in the north east (though not enough to lose seats) but also across the east and west Midlands, taking out Stoke South, Mansfield, Walsall N, North East Derbyshire; Tories lost vote share (and seats) in their heartlands too.

– London was different; Labour did exceptionally well because its people and most of its MPs are solidly ‘Remain’, because there was no sizeable UKIP vote ‘up for grabs’ and because Sadiq Khan is popular and active.

– I’ve had to revise my analysis to account for the North West, where Labour did well. It has to be seen in the context of doing very badly in the county elections, nationwide, just five weeks earlier. What changed in the interim was Andy Burnham’s election as Manchester Mayor (highlighted by perceptions of his leadership around the Manchester bombing). The words ‘Labour’ and ‘success’ came together in the media and Labour held North West marginal seats that it had contemplated losing.

The seat I used to represent, High Peak, is a case in point. In May we lost 3 of our 4 Labour county council seats there yet Ruth George won the Parliamentary seat on June 8th with an incredible 14% swing – despite being in the East Midlands. Does this contradict what I said about the Midlands above? No – because in High Peak (split 50:50 on Brexit) 90% of the population receive their media from Manchester, not the East Midlands (the rest get Yorkshire TV). High Peak was thus infected by the ‘Burnham Buzz’, the equivalent of London’s ‘Khan Chorus’. (High Peak also has an extremely sophisticated electorate – who, in their wisdom, elected me three times from 1997. Blue collar workers, who moved away from Labour elsewhere, are under-represented there).

Two more seats: by no stretch of the imagination need Labour ever contemplate relying on Canterbury or Kensington to deliver a majority. Canterbury was a fluke: a massive 40% of the electorate are students there and the timing of the election was perfect in maximising both anti-Tory passion (corralled by Labour’s policy on student fees – thank heaven we don’t have to implement that now!) and the phase of the University year. Sheffield Hallam was similar. Three weeks later, after term had ended, that vote would have been dispersed to the four winds. In Kensington an unpopular MP linked to a very unpopular cause (Brexit, in London) paid the price; her Labour successor has had an unenviable, literal, baptism of fire. Backing up this claim I cite the fact that in my own west London home the three forever Conservative wards of Chiswick all returned Labour majorities for the first time ever – because the Tory candidate lost votes by not opposing Brexit in this 70% ‘Remain’ area.

So, don’t get out the bunting quite yet. There’s a long way to go before a very fluid electorate is likely to coalesce around a progressive government or coalition… Meanwhile Labour’s big challenge is to consolidate those areas once called ‘heartlands’ as well as the conventional ‘swing seats’, where a distinct and worrying lack of progress was made in June. Perhaps this reflects the fact that our leadership has little or no experience of ‘pitching’ for the swing vote in the centre ground of politics…

Reflections in the cold light of (election) day

So we have another Conservative government – but for how long? With memories of the recent coalition still raw we’ve seen a return to two party politics as an unlikely Labour leader claimed the silver medal to widespread praise. Don’t laud him too much: this was a high turnout election (that’s good) but ‘highest ever Labour/Tory vote’ claims are disingenuous, as the electorate’s never been this big before.
The irony is that this was a long, 7 week campaign which Theresa May could and should have won: her robotic, hermetically sealed, intensely personal approach was so dire it couldn’t disguise the lack of proper plans for Brexit or the economy; it was the Conservatives what lost it. It was a long campaign; if 3 weeks shorter Mrs May would not yet have tumbled down the polls so far and would have won. A short campaign delayed by 4 weeks, and the students would have dispersed from their university towns for the summer and made less of an impact (Canterbury – where 4 in ten electors are students – Reading and Sheffield Hallam might not have happened). And again the Tories would have won.
The Tory campaign was without doubt the most inept I’ve ever seen from any party – and I remember 1983 – yet Labour still couldn’t beat them! We regained our 2010 position, itself the worst outcome for Labour for 30 years. The battleground ‘swing’ seats, especially of the East and West Midlands, stayed blue – except, I have to say, my own old constituency of High Peak (1997-2010) in Derbyshire, which Labour took on a 15% swing! I can’t explain that, especially as Labour lost all but one of its county councillors there just 5 weeks earlier. The seat voted 50:50 on Brexit but it has a well educated population and few traditional working class families for Labour to alienate. Plus a weak incumbent who’d made no mark in 7 years in office. High Peak behaved as its geography suggests – like a north-west seat, with a successful Andy Burnham trending on its local media – and not a Midlands one, where Labour provided little to prompt aspiration.
Labour had no antidote for the Tory / Brexit onslaught which robbed them of Mansfield, Walsall, Stoke South and High Peak’s neighbour, North East Derbyshire – all losses which should have been even more remarkable than the gains of Kensington or Canterbury. We’ve taken such seats for granted for too long, not ‘working’ them enough between elections – which is when politics really happens.
Labour’s ‘success’, such as it was, was based on four main things:
  • a campaign that suited Corbyn’s ‘rousing’ style (there’s a place for making existing supporters and idealists feel good and empowered, but it doesn’t attract swing voters);
  • a cohesive and radical manifesto that commanded broad support across Labour as it would have in any European social democrat party (but thank heavens we don’t now have to pay for it);
  • phenomenal success in London, where Sadiq Khan rules OK, where there’s little UKIP presence and a very strong anti-Brexit feeling – and where pretty well every Labour candidate (except Jeremy and Diane) was united in NOT having JC on their leaflets or visiting their patch!
  • Scotland, where the pendulum swung Labour’s way after a ‘couldn’t get any worse’, unrepresentative 2015 result.
So now, today, we have the prospect of a Theresa May / Democratic Unionist Party ‘arrangement’ (the ‘Made-DUP’ alliance as some are calling it) keeping the Conservatives in office but not in power. I’m not too worried about the scary end of DUP politics – my dealings with them in the past suggest they are less monolithic, more tolerant on social and economic matters than they are painted, and the scary civil rights stuff ‘s a devolved issue, not for a Westminster coalition. But what’s really worrying is the impact that Government partisanship could have on Northern Ireland politics. As the neutral, the arbiter, Mrs May simply cannot slap Arlene Foster’s wrist in Stormont one day and beg the DUP battalion to follow her through the Westminster lobby the next… Either the ‘loose coalition’ won’t work or the peace process won’t. What a choice!
The most promising thing to come out of politics in the last few days is the start of informal cross party talks between backbenchers (and others?) on how to organise and deliver a Parliamentary majority against the hardest interpretations of Brexit and the ‘no deal is better than a bad deal’ faction within the Tory party (they’re wrong, by the way, very wrong). That will involve breaking down tribal barriers and genuine engagement on the issues: is it too much to hope that Opposition leaders might follow their troops into battle on this, talking the language of friendship with the sizeable number of Tory backbenchers who see this as an opportunity to get the genuinely best deal from withdrawal from the EU – or even not withdraw completely?
If we can do it on Europe I just hope that Labour’s Party managers are looking at other issues too, where Conservative allies, even ministers, can be enticed by the prospect of winning a majority vote of Parliament on manifesto issues common to all parties: on climate change, company governance, the relief of poverty, for starters.
We’ll see. Meanwhile, don’t put those garden posters away quite yet…

What is the future of civil society?

“There are no boundaries”: a response to Julia Unwin’s dilemmas

Julia Unwin, chair of Civil Society Futures, published “three dilemmas” for civil society. Here, Tom Levitt responds.

This isn’t a dilemma: there are no boundaries. Perhaps a generation ago it helped to categorise but today it doesn’t, the approach needs to be inclusive. Whilst I welcome the idea of the ‘for purpose’ company, B Corp is a distraction, not least because it only applies to 100 small companies in UK after a decade of existence. It doesn’t answer this question: “If a ‘for profit’ company commits its entire work force to supporting a charity partner over a period, in innovative ways, producing value to both parties, is it behaving as part of civil society?” I’d say yes, of course. Does the same apply if only half the workforce is involved? Yes… and so on, ad absurdum. Where do you draw the line?

What’s the difference between a profit and a surplus? Does it really matter? The American version of ‘non-profit’ is at least defined (organisations dependent upon external funding for their survival) whereas ours isn’t so concise. The only true ‘not for profits’ are taxpayer-funded services, charities, voluntary groups – and companies that have gone bust. Social enterprises and B Corps are ‘for-profits’ but it’s what they do with their profits that makes them different from companies which exist to drive ‘shareholder value’ only, who take money out of their companies to benefit (principally) ‘the few’. Even CICs are allowed to take some of their surplus/profit out of the system! Shareholder value is very much under scrutiny as more and more business leaders, as at Unilever, argue that environmental sustainability and community engagement are actually the best ways to deliver long term shareholder value. Does that make them part of civil society? (When we say ‘not for profit’ we mean ‘not for dividend’ but that’s not very catchy!)

A well run business will regard its workforce as a community and espouse community values of engagement, representation, activism and sharing; the employee-owned John Lewis Partnership does all of these things. Does that make JLP part of civil society?

We don’t need to spend time and effort excluding people and organisations from our definition of civil society: if it has a bill and it quacks, it’s a duck. Let’s get swimming together…

Dilemma 2. Civil society is one of the places where we express affiliation and associational life is our great, and growing, strength. Many voluntary organisations invest heavily and successfully in developing an active and engaged membership. But trustees are charged with governing for today’s beneficiaries as well as future generations. Does that create impossible conflicts within organisations with growing and more engaged and voluble memberships? Do we risk the engagement of members who quite naturally will have demands and aspirations for now? Are members our stakeholders, or are they are owners?

Those conflicts can and do arise. As Martin Luther King said:

‘Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary’.

In other words, every charity should have the goal of putting itself out of business by conquering the cause of the injustice against which they fight; that’s how you serve the beneficiaries of the future. Whilst this isn’t usually a realistic (lifetime) goal it should, nevertheless, always be reflected in the mission and programme of both individual charities and civil society in general.

You identify two risks here: one, that I call the ‘philanthropist’s risk’ is that s/he may choose to fund a campaign which isn’t a priority, or in a way which is not appropriate, perhaps operating in isolation from others and possibly even undermining those with a more rational approach. Bill Gates is a star not for the quantity of money he donates to good causes but for the fact that he delivers nothing: he uses his wealth to enhance and coordinate proven ways of working by others. The ‘democratic risk’ is that the majority have the right to be wrong. A charity with ‘youth’ in its name had a very democratic structure which, over the years, delivered an elected trustee board with an average age of over 60. The membership had to be told they were wrong – a brave action – but re-organisation was well handled and it worked.

‘Membership’ – an active, engaged, controlling mass membership – is not the flavour of the month in the charity world where today ‘followers’ (in both the ancient and the modern, Facebook sense) and supporters are the most wooed. This helps protect the mission from transient changes in public mood and other influences (given appropriate safeguards) and leaner, slimmer organisations are more agile than those which are constantly looking over their shoulders to judge public or members’ moods. But a compromise is needed: the charity sector is paying a price, literally, for regarding supporters as money-fodder rather than building relationships with them.

Few businesses could be described as democratic but they certainly know how to build brand loyalty…

Dilemma 3. We know that reputation is a hugely valued asset. We gamble with it at our peril. And yet active civil society will always want to empower people to take action. Our risk frameworks and control systems may protect our reputation. But do they also dampen enthusiasm and engagement and make it difficult for people to take initiative? Does our proper desire to be business-like and professional, stop us from allowing people to take action?

The charity sector is notorious for its risk aversion and fear of failure. Whilst the latter is justifiably seen as letting down the beneficiary, the former prevents many (especially mid-sized) charities from maximising their impacts. A balance must be struck.

A good example of this is the way that charities regard business as a resource. Traditionally this is an arm’s length relationship although the charity arm is normally outstretched, palm upwards. A recent report says that in 2012 only 20 per cent of our largest charities agreed with the statement:

‘…by effectively harnessing our corporate partners’ competences and non-cash assets [our organisation] can make much more of an impact on our mission delivery objectives than through cash-based relationships’.

In 2013 it was 34, 48 in 2015 and 60 per cent agreed by 2016. Things are changing. The Dell Foundation has identified a significant shift in corporate philanthropy: given a choice between a $100,000 gift and an equivalent value in counselling, skilled volunteering or access to decision-makers only two fifths of the 700 NGOs they work with, worldwide, would today choose the cash.

I’m interested in what ‘action’ Julia have in mind in the last sentence. Some would argue that the swing from ‘public funded’ to ‘state funded’ charity-run services has both grown charity capacity and stifled innovation as it (usually) pays for reliability of pre-existing services. As state funding dries up (half of government funding to medium sized charities has already gone) that idea will be tested in years to come! One thing that stifles action, of course, is the Lobbying Act, often creating an over-compensation in a community not used to being regulated in this way.

If ‘action’ means ‘taking part in demonstrations’, forget it (useful for cause-building, no good at getting results). If ‘action’ means empowering collective activity to directly serve beneficiaries then that focus will be more important than ever. As the public sector shrinks (for evidence, look no further than care provision in relation to growing demand) the imagination, capacity and determination of civil society will be tested as never before. New forms of collaborative, integrated, collegiate, cross sector working are needed, based more than ever on local initiatives; the state may still need to coordinate but the routes to results are not paved with gold. We’ll never again go back to the halcyon days of even ten years ago…


What’s New about NewCo?

Tom’s June 2017 Contribution to the CBI’s Great Business Debate

There’s little novelty in defining one’s business as a force for good. Over the years we’ve seen the emphasis on Corporate Social Responsibility wax and wane, stagnate or mature; movements like Blueprint have blossomed and we’ve seen Richard Branson’s B Team, Benefit Corporations and the B Corps emerge. The United Nations’ Sustainable Development Goals recognise the essential role that business has in ensuring that humanity and the planet continue to have a world we can share.

NewCo has no particular claim to the moral high ground but it does provide a platform for companies to share passion and purpose. The NewCo movement is neither a legal status nor a certification scheme but a coming together of for-profit companies, of all shapes and sizes, who want to do things differently. They’re enablers, collaborators, innovators, they’re transparent, open-minded and nimble, connected to communities, each other and the world through the internet. Starting in San Francisco five years ago they’re in 16 cities around the world, mostly in US but including London; driven by ideas and stories they see business as an expression of identity and reject the old corporate model of ‘command and control’. Most are small, all are ambitious and mission-driven but they include Google, whose goal is to make information accessible to all, P&G, Barclays, the BBC and hundreds of smaller enterprises.

On one day in May, 44 NewCos in London opened their doors and invited the world in. Many of the 300 visitors were London Business School MBA students and alumni, sharing hour-long seminars in up to five premises during the day. I visited three:

One celebrates good food and good cooking by serving up packs of ingredients for you to cook at home – with close to zero waste. 300 UK employees ‘serve’ customers every day across 9 countries, all coming with typical NewCo condiments of happy excitement, powerful enthusiasm and innovative flair.

Another works with major charities to develop new forms of fundraising, motivated by the fact that demand for the services that charities provide continues to grow – demand that they’ll be unable to meet unless charities can find innovative new ways to fund their work. The new era they anticipate is unwaveringly online where they seek to promote commerce, extend markets and develop business strategies. Using the tools of business, as it were, to create public good.

A third is a vibrant incubator of new talent, with a good record of turning ideas into business reality. In recent years 35 of the 40 start-ups it’s launched have failed – that’s the way of the world. One in eight ideas succeeding is a good rate and it’s been achieved by encouraging the positive attributes of innovation to go to scale.

This movement has an energy which is rare amongst businesses. NewCos are driven by purpose and operate within traditional business rules whilst integrating them with a positive way of life. It would be wonderful to think that a movement measured in hundreds could become mainstream within a decade.

Thanks to Toast for the fridge

The fridge settles in to Hounslow Foodbox

I once won a holiday in Cuba, then found I couldn’t go. Apart from that, a fridge-freezer is the biggest prize I’ve ever won – and I mean big! This one’s an all singing, all dancing one in which you could house a small family. So big in fact, that…

I digested the news and went to the model’s web site, getting out my tape measure. There are 28 stairs up to my flat and this is a double breasted machine almost six feet tall. Good news! The corridor from my front door is wider than the fridge is deep – by almost 10cm. But – oh, no! – there’s a radiator in the way. And there’ll be no room for it in my kitchen without major surgery. And I live alone – do I really need it?

Half a mile from my home is the Hounslow Foodbox, a busy foodbank. Too busy. There shouldn’t be such demand, though it’s a sign of the times. As supermarkets have (finally) chosen to adopt policies of zero food waste, a shortage of supply for foodbanks is unlikely. But the policy also means a growth in the quantities of chilled and frozen food that they make available and that simulates a demand for… fridges. And freezers.
So thank you, Toast. That’s where my fridge freezer is now, looking after the food that will feed people in Hounslow who would otherwise go hungry. Some people donate a fiver, others a can of baked beans. I just handed over £1,200-worth of electrical goods, for free.
I do, however, keep very quiet about the other part of my raffle prize, which came about not from buying a ticket but through contributing to the crowdfunding effort to get Toast off the ground, a business that will (appropriately) use out of date bread for making a range of fine artisan beers. A very worthy cause in itself. I also won two dozen bottles of each of three varieties of their ale.
As I said, I’ve measured the width of the corridor and counted the stairs. I’m absolutely confident that the beer will fit both through my front door and in my kitchen. And I’m looking forward to being proved right!

Investor Schroder commits to zero carbon energy

Tom Levitt reports on his outing to the 2017  Schroder’s AGM on behalf of ShareAction’s AGM Army… (This article also appears on ShareAction’s web site)

There’s always an air of anticipation at a corporate AGM: will my question be taken seriously? How long must I wait before my moment in the spotlight? What clever way of not quite saying ‘no’ will they come up with?

At the Schroder’s 2017 AGM I needn’t have worried. The previous month they were named ‘Most Responsible Asset Manager in Europe’ by ShareAction so we were amongst friends; and with barely 40 people present we were done in an hour.

Tom and Anne-Marie prepare for (Share)Action

So I was confident when I stood up to ask ‘Will you join other companies in the RE100 initiative to commit to 100 per cent renewable energy in your own operations within a reasonable time scale, to be set by you?’ The answer came: ‘Yes.’

Actually, the official answer, given by the Chairman, was ‘We use 60 per cent renewable now, we’ll achieve 75 per cent in 2020 and 100 per cent in 2025’, but when I asked CEO Peter Harrison later ‘Does that mean you’ll be joining the RE100?’ his reply was much more succinct: ‘Yes’.

Something for me and Anne-Marie Williams, ShareAction’s Investor Engagement Manager, to celebrate! Her question (just before mine, in her own right) concerned the lengths the company would go to in persuading their investees to work to avoid that 2 degree rise in global warming. Her reply from CEO Peter Harrison was very positive, making me even more optimistic about mine to follow. Avoiding the two degrees requires a rapid drop of 60 per cent in fossil fuel use, he agreed. Experts today say that figure’s 80, but he’s headed in the right direction.

Talking to Peter Harrison after the meeting he clearly ‘got it’, acknowledging the responsibility of investors in changing investee policy on climate change. ‘The reason we have a climate change problem is because so many people have taken so many short term decisions over so long,’ he said, absolutely hitting the nail on the head. I’ve since had his permission to use that quote in my next book, The Company Citizen, to be published towards the end of the year!

Peter then graciously accepted Anne-Marie’s offer to put Schroder’s in touch with RE100 to get them working together on a timetable of action for 2025.

Why had it taken this responsible business until now to commit? Their global company may, in some countries, operate out of accommodation where they’re not in charge of decisions on energy supplies – or where zero carbon energy may not be readily available. But they’re on course to meet their 2020 target and have 7 years to make it 100 per cent by 2025.

I somehow think they’ll do it… result!

Greece is the Word… for Refugees

In March 2017 Tom spent a week in Athens including four days teaching English and providing conversation practice, as a volunteer, to refugees based in the squatter community. Here’s what he found…

They say the camera never lies. Everything I’ve seen and heard on TV about the plight of Middle East refugees was borne out by four days working in Athens recently, with migrants in the squatter communities around the city’s historic university and anarchist quarter.

Former office blocks, schools and abandoned government buildings provide around 6 hubs in this community, mostly squats, taken over with various degrees of permission. They’re within a square mile of dense, mature city, home now to migrants who have risked their lives, savings and sanity to escape war, fear and personal oppression.

Inscribed ‘Dedicated to the poor and homeless of the world’: Athens street art

There’s D who, five years ago, at 18, started university in Syria, a Christian who was excused conscription because he was studying pharmacy. A year later the derogation was reversed but rather than sign up for Assad’s army he transferred to Beirut to study where, a few months later, he heard that his parents and two siblings back home had been killed. He finished his degree and a few weeks ago invested his savings in the traffickers to take him to the west. After a couple of false turns (deliberately, to extract more money?) he found himself in Greece, with nowhere to go, no money left and no way forward; just a pharmacy degree, excellent English and a blend of hope and acquiescence.

K had been a nurse in Iraq for over 20 years. This family man was proud of his Kurdish health service but the day he came home to find his village razed to the ground, by ISIS, he knew it was time to flee. He rounded up his wife and child and within days they were transported, at great cost and by mysterious men, to the Greek Islands and hence to Athens. Three weeks ago the wife and child had bought their way to Germany on a bus. ‘I don’t know how the traffickers did it,’ he said, but they took all the money he had and he could see no way to be reunited with his family.

M, an Afghan, had also been on the islands: ‘Our boat set off at night for the mainland and was intercepted by police,’ he said. ‘It was dark, we were scared: then we cheered! This was the Greek police, not the Turks. We’d made it!’ M had walked from Afghanistan to the Turkish coast (‘Actually, I occasionally did a few miles by taxi’) to avoid most of the traffickers’ costs. Another boy told me he was one of 90 on a 9 metre inflatable boat which had been sinking with a puncture when they were caught. ‘I’m from Afghanistan, of course I can’t swim’.

Few of the refugees are able to work but some are in the informal economy – ‘there’s always demand for a barber!’ smiled a Pakistani man. ‘I admit, I’m an economic migrant’, confessed an Algerian baker, impressed that I knew his home town of Oran, as he settled down to sleep on a sofa. It was 3pm: bedless, he would be on the streets all night, once the drop-in centre closed.

Then there was N, a man of passive disposition, huge dignity and an educated smile: a former policy adviser. Married to a politician who’d gone before him and reached a camp in Europe proper, internal Kurdish politics had driven him and his two delightful children – the daughter, an aspiring microbiologist with perfect English – to leave it all behind. And go where? He would not have chosen Greece, where the economy can barely support its own people let alone tens of thousands of penniless visitors. Nor would he have chosen Britain: ‘Brexit?’ he said: ‘You’re crazy. Oh, what will happen to Ireland now?’ We met in a busy make-do community centre where everything was free, even the cafeteria. It was popular with refugees for its language classes in English, German and Farsi, advice bureaux, yoga, library and creche. These were all managed by young northern European and American volunteers, almost all white, mostly women, abounding in piercings, tattoos and dreadlocks – plus the occasional English public school background.

Welcome to the anarchist community: ‘We don’t work with the NGOs’, a young woman stressed to me on day one. This was apparently the only condition I had to swear to uphold before being let in to offer English conversation to the day visitors. Not working with NGOs (or governments, naturally) meant that what benefits were available in the camps outside the city – such as regular, small cash payments – were not provided here.

The squat where we gave English classes to giggling pre-teen Afghan girls was home to dozens of families, from every Middle East country and beyond. I gave our star pupil – a girl of 11 – a globe the size of a grapefruit. She loved it, fascinated: ‘That’s Greece? Really? And England – so small!’

The building had been attacked by fascist fire-bombers a few weeks earlier, fortunately without injury. Scorch marks on the outer wall were worn like a proud badge. ‘Locals accept us’, I was told, ‘they bring us gifts. They’re almost as poor as we are.’ The previously generous state pension in Greece was recently halved; acceptance isn’t the same as celebration. Gifts too came from abroad: on one day a convoy of 26 anarchist vans and lorries arrived from France, Belgium and Spain, with clothes, bedding and food. The street was like a scene from Mad Max, without the guns. Was this the right way to do things, I thought: what had the convoy cost? What if, instead of practical things, they’d sent money? A Euro in Greece goes further than a Euro in France. More to the point, if the refugees had money, even the same pittance as they’d get as of right in the camps outside the city, they might not only choose with dignity what to eat or wear but they’d be contributing to the hog-tied Greek economy, making together perhaps a significant contribution to the businesses that were so struggling around them, yet so separate from them.

Like the refugees, the anarchists were themselves an international band, set apart from the mainstream of their own societies, deliberately, preferring to avoid contact with authority. There were local traditions to uphold: it was in this area that the riots of 1973 undermined the junta and triggered democracy. The reputation of the locality for its street art pre-dates the refugee crisis: ’graffiti’ isn’t a Greek word for no reason.

Stepping out of ‘the system’ is risky. Few of the refugees I met had yet become hardened or cynical. Yet whatever hope they had left was theoretical, just about triumphing over experience. For how much longer? Whatever they were fleeing from had changed their lives forever before they even left and, where the trigger for departure was war, was changing them still – and not for the better. Yet these were people who had once had ambition, plans, families. They still have smiles, however rueful, even the ability to laugh. One joked ‘Put me in your suitcase, take me to London!’

These were the lucky ones: they’d got away, in most cases because they could afford to – back then. Every one of the adults and many of those younger understood the politics behind their situation and the reality of their slim prospects.

They were people with families who had done what they felt was best. They appreciated a degree of rules and order, unlike their polite and generous hosts. Whilst the risks they were taking in the manner of their migration were always odds-against success, this was better than the near certainty of humiliation, degradation and possible murder at home.