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Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
Uj Sustainability
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Uj Sustainability

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Reciprocity between business and people, are important in a changing global context where the individual is empowered and big business often seen as exploitative, yet business is a vital part in …

Reciprocity between business and people, are important in a changing global context where the individual is empowered and big business often seen as exploitative, yet business is a vital part in creating wealth for people and societies. A social contract that sets the boundaries between the parties, is one way to create equilibrium, more so in emerging economies where society needs investment, yet was often exploited in the past. The credit crunch has increased the need for reciprocity.

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  • 1. Sustainability in business – towards a social contract that balances community enrichment with global competitiveness? 21 October 2010 Perceptual asset managers
  • 2. Company success creates wealth. Without that, there is no wealth to share • A company should be “good” – it must contribute to society; it must reward investors; it must create jobs; it must inspire people and communities; it must empower people; it must inspire the youth; it must encourage innovation in industry; it must put more back into the environment than it takes out; it must pay taxes; it must reward productivity. • People will be productive when they believe in their future – this is only partly a function of wages and benefits – it increasingly lies in their participation in the future of the company. • In all societies, even low paying jobs slowly grow into higher wages and better standards of living. • As the ambassador of Mexico to the US said, the alternative of low-paying jobs is no jobs! Ultimately, once the multiplier of income starts working, most societies increase the wealth of their people.
  • 3. Yet today, it is about a social conscience & reciprocity, not only profit • A company has to be globally competitive to survive long term. It needs to operate well and be productive – without that, it will not succeed. That means extracting greater value from the same resources as its rivals. This has nothing to do with governments, these rules are set by global competitive forces. A company can ignore these – and go out of business, which means no jobs at all! • To stay in business, you have to do “the business-of-business” well. • Today no company will survive without a social and environmental conscience that is real. It is actions, not talking, that matter now. • Society enables the company to operate. Countries, governments and communities set the rules of what they expect from the company – in that respect, they will also ultimately only deal with companies that satisfy their requirements. Companies will invest where they feel welcome and it is easy for them to operate. Yet, society has a right to demand respect and returns, exactly like investors.
  • 4. The new balance of power requires both sides to understand their mutual expectations and obligations • What the workers and society want and need to increase their standards of living, working conditions, happiness and future potential. • What business requires to be globally competitive and what it is able and required to “pay” for that. • This requires a “social contract” between workers, communities, governments and companies. • A social contract means that society cannot just demand without committing to reciprocal increases in productivity which will make a company globally more competitive. • On the flipside, a company cannot expect more productivity without actively engaging with society and empowering it to create a prosperous future. • The one without the other will never work.
  • 5. 5Presentation title Business depends upon a complex set of stakeholders who needs to co-exist within a state of equilibrium The individual Investors & Shareholders The community Government and other interest groups The environment
  • 6. 6Presentation title The traditional scenario was fairly one-sided The individual – be productive and flexible Investors & Shareholders The community Government and other interest groups Invest for maximum short-term return Pay taxes, stimulate investment into the economy Creating wealth through jobs and taxes, enables communities and political support Create jobs Leverage the resources of people, raw materials and capital
  • 7. 7Presentation title The demands of customers - and the challenge of competitors - create a highly competitive mega-context The individual – be productive and flexible Investors & Shareholders The community Government and other interest groups Invest for maximum short-term return Pay taxes, stimulate investment into the economy Creating wealth through jobs and taxes, enables communities and political support Create jobs Leverage the resources of people, raw materials and capital
  • 8. 8Presentation title The traditional balance of power – workers create investor wealth, often against all odds The individual – be productive and flexible Investors & Shareholders The community Government and other interest groups Invest for maximum short-term return Pay taxes, stimulate investment into the economy Creating wealth through jobs and taxes, enables communities and political support Create jobs Leverage the resources of people, raw materials and capital
  • 9. 9Presentation title The changing balance of power – a finite balance: the right to operate balanced with the right to superior returns The individual – be productive and flexible Investors & Shareholders The community Government and other interest groups Invest for maximum short-term return Pay taxes, stimulate investment into the economy Creating wealth through jobs and taxes, enables communities and political support Create jobs Leverage the resources of people, raw materials and capital The rights of workers and society cannot be met and will not be sustainable if a company is not globally competitive – society has to balance its own demands within the context of global competition. Companies will simply operate elsewhere if these demands are to great. However, the more the company listens, the more productive the workforce, the more productive the workforce, the more successful the company. Ultimately the greatest mutual benefit will come from this delicate balance.
  • 10. 10Presentation title The drivers of this new balance of power The individual – be productive and flexible Investors & Shareholders The community Government and other interest groups Invest for maximum short-term return Pay taxes, stimulate investment into the economy Creating wealth through jobs and taxes, enables communities and political support Create jobs Leverage the resources of people, raw materials and capital • The democratisation of the individual • Democracies in most countries • Open-societies and opportunities • The globalisation of labour • Open information flow and access • The importance of meaningful work for people • Greater government accountability • Greater democratic demands • Greater demands from labour and trade unions • Greater say of the individual in how taxes are spent • Difficulty in disguising bad practices • Social media and natural and organised communities everywhere • The mobility of labour • Global competition for investment and scarce resources • The demands of customers
  • 11. 11Presentation title The future scenario The individual – balance productivity with enrichment and job satisfaction Investors & Shareholders The community Government and other interest groups Invest for the longer term wealth creation, without entirely jeopardising short-term results. Have a social conscience. Be prepared to trade benefits for returns. Listen. Be a partner in all respects. Pay taxes, stimulate investment into the economy, attract investment into the country Creating wealth through jobs and taxes, enables communities and political support. Create an investment and sustainability conscious environment Create jobs that pay and reward well Sustainable management of people, the environment, health, safety and natural resources
  • 12. 12Presentation title What has MTN done in Africa? • Connects people with family, friends and jobs. • Creates jobs – directly in their operations, with entrepreneurs who sell airtime, cleaning services, advertising services, office rentals, security services – it generates the economic multiplier. • Creates a positive atmosphere for other investments into the countries. • Pay taxes which enables government to invest back into the communities with infrastructure development. • Creates infrastructure where none exist (in place of rail, roads). • Inspire the youth. • Upliftment programs. • How can that be bad? In fact, if it did not make money, it could not do that! The most important thing it did in Africa: makes people believe in themselves. And gradually, makes the world believe in Africa.
  • 13. 13Presentation title A discussion with Mark Cutifani, CEO of AngloGold Ashanti • Reciprocity – caring for people and the environment, balanced with superior short and long term returns. • The way people are treated, and the way you integrate into - and respect - the communities within which you operate, will determine your results through greater commitment of staff and greater productivity. • It is never either/ or. The global scenario today demands that – but it is also the right thing to do!
  • 14. 14Presentation title Conclusions • Be aware of the changing context. • Be open to all sides. Listen. Understand the new social contract. • Be willing and able to balance apparent conflicting viewpoints. • A new style of leadership is required. • The demise of corporate philanthropy and social responsibility. Integrate society with business strategy. • Vision now more important than management. People will buy into a vision, from investors to workers. • Balance interests. Be open about issues and demands. Reward productivity with greater returns for people. • Ultimately, without productive business, there is no wealth to distribute, salaries to pay or jobs. Neither factors predominate – it requires balance. But yes, the balance is not as simplistic as in the past! • Accept that every individual co-creates the future of a company and of society – it does not belong to the CEO or the executive. • Do it willingly!
  • 15. 15Presentation title If we do this well…. • We will create a new paradigm of how business operates within society. • It will create a new sense of mutual respect. – Business will not be seen as exploitative and demanding. – Workers will not be seen as demanding without increased obligations. – And society will not feel they do not benefit from their resources. – And future generations will respect us for enabling them a better standard of living and a healthy planet. • Being an emerging economy ourselves, we are in a unique position to set the benchmark for how to integrate how society creates wealth.

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