For the past 9 years I have written an annual review of the corporate responsibility field. In each review I have focused on what I thought were key trends, and sought to promote heartfelt and progressive engagement in this field. 2010 is the final year of my writing quarterly reviews in the leading Journal of Corporate Citizenship. Next year, therefore, I will produce a new edited book, with co-author Ian Doyle, that analyses the last 5 years. Then, Ill focus less on written commentary and more on implementing the ideas and insights from the past decade. So, as this is the final annual review, I thought it important to encourage us all to use this time of post-crisis reflection to go deeper, and see how our work might relate to the kind of economic transformations we need for a fair and sustainable world. Hence, when I saw how many people are now debating fundamental elements of “capitalism” I thought it important to bring this to the fore. Because, as the World Economic Forum draws to a close in Davos, the real debate about the future of our economic systems is only getting started… in the real world of people’s communities and businesses. The press release for the new review follows below.
Post-crisis, Capitalism now a focus for CSR, says Lifeworth Review
Press Release from Lifeworth. February 1st 2009.
Capitalism is up for debate, and that’s a good thing, according to a new review from a management consultancy. “The dual financial and climate crises are leading people in all walks of life to question the kind of economy that makes sense for their businesses, communities and families,” explains lead author of the review, Associate Professor Jem Bendell. “As well as some anger at bankers, the financial crisis has led many to ask deeper questions about finance in general and, therefore, about capitalism. From bars to seminars, bookshops to board meetings, capitalism is being discussed – openly and critically,” he claims.
Entitled “Capitalism in Question”, the annual review describes how politicians and even business leaders are calling for more critical assessment of what kind of economic system we need for a fair and sustainable future. The review from Lifeworth Consulting summarises over a dozen books that have been published in the last weeks that debate the relative merits of capitalism and what form of economic governance is needed post-crisis, and in a new era of economic power. “The majority of these new books seek to do something that previously seemed neither necessary or interesting − to defend capitalism,” says John Stuart of Greenleaf Publishing, which supports the review.
Bendell explains that defensiveness wont help. Referring to the “Restoring Trust” report overseen by Allianz, Barclays Capital, Blackstone, and Carlyle Group, among others, he said “seeking to defend one’s immediate interests, as the banks writing the recent World Economic Forum report clearly did, is not how we are going to discover together the next step in our economic evolution. Fearful people in incumbent institutions may waste our time with diversionary drivel, but real exploration of the core issues is unavoidable. The question now is who should participate and how.”
Co-author of the review, Lifeworth Consulting’s Ian Doyle, explained that “much of the corporate social responsibility, or CSR agenda, has been predicated on a belief that government is constrained by global finance and can, or should, only intervene in markets to a limited extent. The giving of huge amounts of money to private banks may suggest that global finance is still dominant, but it also shows that sometimes when called on to act, most governments will intervene in markets in dramatic ways. So it’s not unreasonable for people to look to their governments to now shape responsible business practice more than before. And that is what we are seeing.”
The review is a call for people to become more involved in exploring how to evolve economic systems to promote fair and sustainable societies, says Bendell. “We are calling for this kind of engagement because after doing nine years of quarterly responsible business trends analysis for the Journal of Corporate Citizenship, we have concluded that there is a nascent social movement for the transformation of business and finance. Behind the jargon of corporate social responsibility, corporate accountability, environmental management, social enterprise, and responsible finance, are people like you and me who want to change the way business does business and the way money makes money. As such we need to think through what we are aiming for, longer term, and how we can work in concert. We all need to look up from our projects and shape the unfolding programme of economic transformation.”
To contribute to the debate, Lifeworth offers a framework for democratising capitalism. As Bendell, who is also Lifeworth’s director explains, “It’s simply that we need more governance of capital by people who are directly affected by its ownership and control. From that one concept flow many implications for tax, currencies, stocks, and all social and environmental regulations. This democratisation of capitalism could be the ultimate goal of the corporate responsibility movement, and the seeds of this approach are already to be found in the ideas and practices of many people working on corporate responsibility today.”
A discussion of economic systems can seem distant from the day-to-day preoccupations of most executives and the academics who seek to educate them, but as Bendell suggests, “making such connections will be important if the corporate responsibility movement is to have a substantial and lasting effect on commerce and society.” In ‘Capitalism in Question’ some initial guidance is given for how business leaders and educators can play a socially progressive role at this time. Specific multi-stakeholder initiatives are recommended.
The review of trends in corporate responsibility during 2009 includes analysis of government stimulus packages, responsible tax management, responsible mining, responsible cosmetics and beauty businesses, as well as particular trends in Asian and Francophone countries. It also explores the potential of ‘design thinking’ for sustainable business innovation, and provides in-depth analysis of the implications of the Copenhagen climate summit.
“Deep changes will be required in economic governance if we are to achieve a sustainable society… Capitalism will change, there is no doubt, and it must change so that it delivers both private wealth and public good” explains Professor Malcolm McIntosh of the Asia Pacific Centre for Sustainable Enterprise. “As we enter a period of potential reconfiguration of economic governance, leaders of organisations will need to better understand the issues, actors and dynamics to be successful. Part of Griffith Business School in Australia, Professor McIntosh’s centre supported the free release of this review to promote creative thinking at a time of critical global challenges and because “the lead author Jem Bendell, is an important commentator on the world stage.”
Dr Bendell says there are important implications for management education. “In Griffith’s new “Graduate Certificate for Sustainable Enterprise” we help our students to navigate increasingly complex social and political contexts so they can find ways to prosper by being part of the solution.”
‘Capitalism in Question: The Lifeworth Annual Review of 2009’ is available in pdf for free download at http://www.lifeworth.com/consult/2010/02/annualreview/
Lifeworth’s responsible enterprise trends analysis during 2010 can be obtained by subscribing to the ‘Journal of Corporate Citizenship’. New subscribers to the journal before March 31st 2010 receive all 2009 copies for free. Visit http://www.greenleaf-publishing.com
Information on Griffith’s research centre and graduate certificate is available at http://www.asiapacificsustainableenterprise.com/
For media enquiries about ‘Capitalism in Question’ contact Jem Bendell via connect [at] lifeworth.com or +44(0)2071936102
1 thought on “The Final Annual Review from Lifeworth – challenging Capitalism!”
On the report, Capitalism in Question, I have this to say:
1. The practical implementation of worker-ownership globally is, I think, a generational objective: first because the still largest economy is so politically unreceptive to fundamental change; and second because it’s the youth of the world who are more ready to change. Perhaps, though, something can be done more quickly with China and India, both of which might exceed the GDP of USA this century? In time, the USA might thus be persuaded.
2. The section on climate change is exceptionally illuminating for me. Based upon this report, a carbon tax makes complete sense. Petrol/diesel engines emit much of the human generated CO2. So I wonder whether the issue can be effectively tackled at the oil well? By that, I mean that petrol and diesel operated autos etc should be subject to progressively higher taxes, while all electric cars should pay a pittance in comparison – especially now that many biggies in auto production are set to roll out electric cars. Only when most consumers refuse to pay exorbitant capital and maintenance costs for petrol/diesel autos will they move en mass to electric. That, in turn, will force producers at all levels in the oil/petrol chain to change their ways – both a delicate and slow process.
3. And, naturally, electricity suppliers should be encouraged, in all manner of ways, to supply renewable energy and eliminate fossil fuel usage progressively. China and India will, no doubt, be sticking points for a long time, however.
4. At a more mundane level, the split text format of the report necessitates scrolling up and down, repetitively. Changing to a standard layout would eliminate much of that need, and result in a more pleasurable read on a screen. When printed, however, it’s not an issue.
5. For what it’s worth, I avoid the use of the term ‘pragmatic’, in favour of ‘practical’, except when the former is used specifically in the context of philosophical pragmatism. By keeping to the use of ‘practical’ for all else, no reader will be confused about meaning.
Some additional, background comments…
Back in the early eighties, I was deep into reading about why the world was self-destructing in a number of ways – having arrived at that point as a result of fifteen years of some government and many more business careers that entrapped me in a spiral of rising debt, lowering expectations and increasing depression. In a fit of confused anger, one day, I wrote: Money will not rid us of the problems; the problem is to get rid of money – one of my formative efforts in chiastic rhetoric. Of course, I had no idea how to get rid of money, even if feasible and practical.
Hence, you have some idea of the impact upon me that your Lifeworth organization and the report on Capitalism in Question has had.
It’s been an education, reading all that you and your associates have achieved. The report has provided tangible and new insight into some of the core issues that affect the global economy; more importantly, for me, it’s actually raised my hopes, somewhat, that perhaps something can indeed be done to change the way the world and capitalism operate.
It was the first section that gave me the biggest lift, especially the ideas about “up-close ownership”, with all that implies. Since the mid-seventies, I’ve held the position that workers should be owners (or given the choice to be) of the companies for which they work. All companies (over a threshold) should be worker owned; and only workers should have voting rights. Investor shareholders have none, but receive higher dividends. Considering the long history and entrenched nature of stock exchanges and shareholders, I knew it would not be easy to affect such a change. Nevertheless, as a result of the 2008 crash, I wrote some articles on the topic of capitalism and worker ownership, for American Chronicle.
Here’s the link: http://www.americanchronicle.com/authors/view/2535 where you can read The Capitalist Catch (1) and The Capitalist Catch (2), among others.
In my prior corporate lives, I worked for twenty-five years in the computer divisions of banks and insurance companies in England, Australia and Canada. I got to know a bit about those industries. When, in the waning seventies, I saw banks moving into insurance and insurance companies getting into banking, I said to many of my associates: Bad idea, bad move, it’ll come back to bite us. Nobody was listening. The Savings & Loan debacle in the 1980s was a warning; the Asian meltdown of the late nineties was the first real tremor of things to come. In mid-2007, in various online forums, I suggested that everybody should get ready to duck the big crash coming in 2008 (wrongly, I fingered the second quarter). Frankly, I didn’t think it was a difficult call. Neither did Nouriel Roubini.
And, considering the most recent news report I saw recently (February 26, 2010) about the secret trading index that Goldman Sachs et al use to gamble with credit default swaps (CDS) concerning Greece (and other countries) going bankrupt, not much has fundamentally changed since late 2008. Those CDS should be outlawed, somehow.
For your information also, I’ve had some practical exposure to the idea of “worker ownership”, in a theoretical sense. It happened when I was working for a large Canadian bank in the seventies, during a time when top management was looking for a way to introduce “participatory democracy” throughout the company, starting with the computer division – all in an effort to improve employee satisfaction and encourage them to feel a sense of ‘ownership’ for what they do: thereby creating (the thinking went) a more productive work force.
The text used by participants was The Managerial Grid by Robert Blake and Jane Mouton, an excellent book. Overall, there was some short term gain after the process of Grid Management was implemented, but I left that corporate world shortly after the implementation phase began to start my own business as a corporate head-hunter.
Thanks for this opportunity to provide this feedback. I’ll certainly check back from time to time to see what’s happening.