Charles Wookey, CEO, Blueprint
Following Blueprint’s ‘How not to run an unfair business’ panel on March 5th, we share below some of the key themes that emerged during the event.
The discussion focused on the role of fairness in business, the contract between society and business and how businesses, from start-ups to large established companies, can be held to account.
Chaired by Matthew Taylor, panellists included Baroness Onora O’Neill, philosopher and crossbench member of the House of Lords; Cllr Jane Corbett, Assistant Mayor of Liverpool & Mayoral Lead – Fairness & Tackling Poverty; and Justin King, Vice Chairman, Terra Firma and formerly CEO, J Sainsbury plc.
Business has a contract with society
‘Is it fair to expect business to be a change agent, when they have not been in the past and how do we empower them to do so?’
Both Justin and Onora highlighted the role of reciprocity between business and society. ‘Businesses’ Onora argued ‘get some very remarkable public benefits in return for which they owe [society] something. The most obvious benefit that businesses get under our legislation…is limited liability when your business goes bust you don’t have to sell your house.’
Justin followed, ‘Is it right to hold a corporation to account for this change – absolutely it is. It goes back to the mid-Victorian era the idea of a limited liability company came into existence to change the compact between corporations in society, and many corporations have forgotten that part of the deal. We have this wonderful opportunity that if we get it wrong and go bust we – the leaders of those corporations – don’t go to debtor’s prison. So there is a deal with society in our very existence as limited liabilities companies and if society wants to move the goalposts on that deal because the world is changing it has every right to do it and demand of corporations that it delivers against corporations side of that deal so yes absolutely or else it’s very unfair’
Putting fairness into practice in Liverpool
What if instead of just on price, businesses competed on fairness, justice and trust? Liverpool is using fairness, and the Blueprint principles, as a tool for businesses to use in practice – even for example by highlighting businesses who abide by them on the council website and empowering consumer choice.
2/3rds of children in Liverpool who live in poverty are part of families where the adults work. When individuals take work they do so on the understanding that they’ll be able to live. Something is wrong then when this breaks down. Outlining how Liverpool is working on becoming a Fair city, Jane Corbett argued, conversations with business are key. ‘If even half of the people, companies and public organizations worked to the ideas outlined in the Blueprint principles, we’d see a real positive difference in society.’
The danger of concentrations of power
Does it matter how much power a business has if they have good morals?
As one member of the audience highlighted this is why the frame of mind in which a decision is made in so important – but must be balanced by the process and outcome. Forgetting this risks that businesses fall into a virtue justification where they feel they are the good guys so their decision will be good – despite evidence that the outcome or process is unfair.
Higher concentrations leads to a bigger risk from the abuse of that power – Jane argued – but business size does not equate to morality. There are businesses of all sizes who aim to act fairly, the danger comes when there is a disconnect between the business and the society. If you are not accessible by the people you serve how can you be held accountable? Jane expanded that ‘business has all the potential to deliver for society, but that we must simply hold each other to account.’
Holding business to account
Justin argued anyone you interact with as a business can hold you to account. For example, consumer agency is vital when holding business to account. He highlighted the case of Starbucks and tax – when a 15% fall in sales led by consumers switching to other coffee companies who were perceived to pay more motivated the company to change its contribution.
But what about B2B businesses that are not consumer facing?
Charles added that these businesses might be held to account by employees or even their supply chains. Employees, in particular, have agency from within to create change.
Measuring fairness comes down to relativity
When it comes to fairness, Onora explained, measurement it will always be flawed. ‘Measuring fair process is achievable if biases are acknowledged – and as a result, it is mistakenly the focus of most fairness effort in business. Whether an outcome is fair is subjective. It often depends on what measure of it is used e.g. a proportionate model. But, very quickly if these are pushed too far the result become ridiculous. Is there any one reliable way to measure fairness – probably not? Fairness comes down to relativity between participants.’
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