Business vs. The State: new roles for social actionSeptember 2016
by Tom idle — We live in politically fascinating times. A coup attempt in Turkey; recurrent terrorist attacks on the streets of Europe’s cities; forthcoming bitter presidential elections in the US – not a day seems to pass without significant events demanding tough political discourse and decision-making. Of course, in Britain, just under half of the electorate are still reeling from June’s referendum result which will see the UK leave the European Union in the coming years – a move to be orchestrated by new Prime Minister Teresa May who was impatiently shuffled into position just weeks after the Brexit vote.
Giving her first speech in front of reporters in Downing Street, May promised to address the plethora of growing injustices in society. “If you’re born poor, you will die on average nine years earlier than others. If you’re black, you’re treated more harshly by the criminal justice system than if you’re white. If you’re a woman, you will earn less than a man,” she offered, claiming her mission to be making Britain a country that “works for everyone”.
Ironing out these injustices will demand corporate cooperation, too. Just a few weeks into her reign as PM, May and her new cabinet received damning evidence of poor working practices at one of the UK’s biggest high street brands, Sports Direct. Warning that its practices could become the norm unless government takes action, the Business Committee shone on a light on shocking conditions at its chain of stores and warehouses where employees were fined for getting a glass of water.
Similarly, the former boss of BHS, Sir Philip Green, was dragged before a Select Committee and hauled over the coals in relation to his handling of a business which has left a £571m black hole in the pension pot of 20,000 current and future pensioners.
Meanwhile, on the left of British politics, the Labour party, via its embattled leader Jeremy Corbyn, has made corporate greed and living wages a central tenet of its rhetoric in opposition. Companies are under attack from all directions, for good reason. The latest UK child poverty figures reveal a startling truth. The volume of children living in poverty whose parents are actually in work has rocketed – and now stands at 63%. As Paul McNamee, editor of The Big Issue, puts it: “If food banks were the canary in the mine of social ills several years ago, in-work poverty serves that role now. Those in work, the strivers, are in need of a hand up themselves.”
So, what role should businesses play in addressing some of today’s most pressing social challenges? Clearly, people all over the world are in need of a leg up. But how much of that should be provided by the state, and how much by companies? These are questions being asked by those working within sustainability functions across the UK, and beyond, more and more.
The ever evolving and maturing CSR agenda has initiated the creation of increasingly sophisticated programmes to create more social good. Of course, some of these strategies – such as Nestlé’s Creating Shared Value – have been around for some time. But with supporting mechanisms like the Benefit Corporation (B Corp) initiative, there is real momentum behind a movement of corporates finding new and interesting ways to build positive social impact. As Jes Staley, the group CEO of Barclays, a company which has recently refreshed its Citizenship agenda to focus on Shared Growth, says: “We cannot succeed or prosper unless the societies and communities in which we live and work also succeed and prosper.”
But as these plans roll out, the line between role of state and role of business gets more blurry.
Take Cook, for example. The Kent-based frozen food business employs ex-offenders. In fact, those recently out of prison make up about 2% of its workforce at its kitchen premises. Charlotte Sewell, the company’s social impact manager, admits that it is a challenging and bold move for the business – especially in the absence of any government guidance or support. But in telling its customers about such a project to help ex-offenders back into the workplace via its Facebook page, the reaction has been “hugely positive. There’s a clear business rationale for us to do this because the applications we get are from some really talented people who are committed and determined to have a second chance and give it their best shot,” she says.
Cook also provides a ‘hardship fund’ for its 800 staff. So, if somebody needs an emergency dentist appointment or a new washing machine, the company steps in and loans them the money until they can pay it back.
More famously, tech giants Google and Facebook have stepped into the breach, offering services more commonly provided by the state. So-called ‘Googlers’ have on-site wellness and healthcare services, including physicians, chiropractors, physical therapists and massage services.
At Facebook, employees are encouraged to spend as much time as they can with each other, with movie nights staged on outdoor screens at its Californian HQ. And there is even an entire town – dubbed Facebookville – which has been built by the company to house staff.
Of course, many of these initiatives are not new. Company towns were popular during the Industrial Revolution of the 1800s when steel and mineworkers were housed in cheap tenement homes so they could work at otherwise remote sites. In the late 19th century, the Lever Brothers built Port Sunlight, a model village on the outskirts of Liverpool, to accommodate workers in its soap factory, which is now part of Unilever.
But in the midst of vocal discontent about the practices and power of business – and the way in which their workers are treated and paid – companies must tread more carefully than ever. Just as politicians will be scrabbling to find better ways of connecting and understanding the electorate – after all, it was this disconnect that inspired the Brexit vote – businesses must find ways to create value in society in a way that makes sense and appeases individuals and their local communities.