Businesses don't control the world; they are its servantsby Prospect Team / October 8, 2015 / Leave a comment
In the prologue to his new book, Connect: How Companies Succeed By Engaging Radically With Society, John Browne, the former CEO of BP, remembers walking through the lobby of a hotel in Fort Worth, Texas in late May, 2010. A row of televisions, each tuned to a different network, was showing the same image of oil gushing from BP’s stricken Deepwater Horizon rig in the Gulf of Mexico. “For a second,” Browne writes, “I felt relieved no longer to be in charge. Quickly, though, these images and the scathing commentary made me angry. How had this happened? BP was going to be torn apart.”
When, at the beginning of October, Browne addressed a Prospect roundtable supported by the Institute of Corporate Social Responsibility and Sustainability (ICRS), and held at the London HQ of the Chartered Management Institute, there was a similar sense of “There but for the grace of God go I.” A few days before the meeting it had emerged that German car giant Volkswagen had been cheating emissions tests in the United States.
During their research for the book, Browne and his co-authors, Robin Nuttall and Tommy Stadlen, surveyed company executives, 89 per cent of whom believed that “companies have a moral responsibility to address societal and environmental issues that go beyond legal requirements.” At the roundtable, Browne said that he and his colleagues had attempted to calculate the “risk [for a company] of having the wrong relationship with society”—of neglecting those aspects of their activity that go beyond narrowly legal requirements, in other words. “We estimated it was about 30 per cent.” As it happens, after the emissions scandal broke, VW’s stock price fell by the same amount. “That is not meant to be the perfect, single-point validation of the theory [put forward in the book],” he went on, “but it’s an interesting observation.”
In Connect, Browne identifies two competing paradigms for thinking about business, both of which he finds wanting: the first is shareholder value; the second is Corporate Social Responsibility (CSR). Shareholder value, he argues, rightly remains central to business thinking, but it is “fundamentally incomplete. It captures part of what should and does drive people, but not everything.” What about CSR? Browne told the…