Business Governance post Covid?

Speciality Bites with

Paul Hargreaves

Chief executive of Cotswold Fayre

• Becoming a B Corp
• Top trend predictions for Christmas 2021
• Self-sacrifice: The importance of building a leadership legacy centred on others
• Undercover Boss
• Can/should bosses really be close friends with their staff?

So will there be lasting change in business culture for 2021, or will the questions that have been asked of business leaders during Covid be pushed back down again? Potentially, things could go back to how they were at the start of 2020, but I think this is highly unlikely. Let me explain why I believe this is a significant moment for business and indeed the world

If we think back to the pre-industrialised era (or even to think about present-day rural areas of developing countries) most people were running their own business: either small-scale farming, micro-business or other artisan activity.  Most enterprises were small and family-based and most people were in control of their own destiny and empowered as a result.  Admittedly there were perhaps too many close to the poverty line, but there was often a greater sense of community helping the weak in society.  There was also a sense of respect for nature, the land and the planet as people knew if they took too much from the land then there would not be enough for the future.

What happened at and after the industrial revolution?  The most obvious change was that weaving and other enterprises moved from an artisan craft to mass-produced operations.  People moved from being in control of their own destiny and empowered to being pawns to make the owners of these larger businesses richer.  Inequalities in society grew and there became a greater divide between the ‘haves’ and ‘have nots’ as more moved from the countryside to the cities.  Due to rising crime it became more important for the wealthy to keep the working classes down over the following centuries.  As time went on there weren’t enough people wanting to do lower paid manual jobs and immigration was welcomed after the Second World War in order to keep the economy functioning.

In addition to people being treated as commodities or resources (why does anyone allow the term HR?) to make shareholders money, the planet was also treated as an expendable resource to suck out whatever business required for their own purposes.  The sense of respect for the land had gone and the sense of treating the planet as a precious resource for future generations had disappeared in the relentless pursuit of profit at all costs.  Humans saw themselves at the top of a pyramid of life on earth rather than part of a circle of life, where every living being is important as each other in balance.  In short industrialisation often commoditised the land as well as the people.  Of course, there were many notable exceptions, such as Cadbury who did business in a better way, but most did not follow his example.

Originally as a simple way of moving on from exchanging goods in the marketplace, money too in the later decades of the 20th century became a commodity itself, with whole convoluted financial industries being built around gambling around what might happen in the future on exchange rates and company shares.  The artificial and unreal distance between the production of goods and finance grew, and it became questionable how some of these financial services served the customers.

So to summarise we had the three bastions of capitalism created, commodisation of first people, then planet and finally money.  Whether we have thought about capitalism like that or not, in the industrialised world, to some degree at least, this was built into our psyche as being normal. My thesis is that over the past twelve years all three areas of commodisation have been exposed as being damaging and destructive.  Firstly in 2008, the financial markets were exposed as being built on sand and came crashing down in spectacular fashion.  Disillusionment in this extreme capitalism that had developed grew. At the end of 2018 and start of 2019, the damage to the planet done by business was exposed to the masses.  Of course, many voices has been shouting their fears into the wilderness prior to that, but 2019 was the year when the majority woke up to the reality of the climate emergency.  Finally during the pandemic in 2020, the vast inequalities of people in our society have been exposed.  The injustice of the key workers in our country being ridiculously underpaid compared to many who do far less important jobs became an issue in the early days of lockdown. Then the worst injustice of all, racial discrimination, whether conscious or unconscious was made clearer to many.  There is a growing sense of anger about all injustice and inequality, and business must do better.

The three injustices of capitalism are now all exposed and the final nail has been hammered into the coffin of capitalism.  It is time for a new capitalism, where people and planet are put before profits. It is time for business to reverse inequality and injustice and heal the land, and encouraging that many businesses now know they need to be part of that.  How strange then that the new UK trade champion appointed by the government, Tony Abbott, is someone who has championed inequality and doesn’t believe in climate change.