In 2018–19, we welcome Professor Dirk Matten from the Schulich School of Business at York University, Toronto, whose passion for corporate social responsibility was evident at a panel discussion about the future of capitalism on 12 March 2019.
Dirk was joined by fellow panelists Alicia Darvell, Executive Director of Global Partners at B Lab, and Kaylene O'Neill, Manager of Sustainability, Governance & Risk at NAB, to discuss whether capitalism in today's world is in crisis. Former ABC Lateline Business journalist Ali Moore moderated the discussion.
The conversation was particularly timely given the recent release of the Hayne Royal Commission report, which drew attention to some of the unethical practices infiltrating segments of the corporate world. Dirk pointed out that good people are sometimes behind these underhand business practices, but noted that they are guided by certain incentives and prescribed roles within a bureaucratic structure that invites such behaviours. ‘Smart business leaders need to be supported by smart regulators,’ he said.
This is where the concept of the benefit corporation, or B Corp, comes in. Under this framework, certified businesses are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. ‘I increasingly think that what the benefit corporation does is signal that you have the right investors and the right directors round the table,’ said Alicia.
While Dirk commented that there are several ways to embed positive business practices into an organisation’s structure, he agreed that the B Corp model is an ideal means of doing so. ‘I think that B corporations as a corporate charter are the best way in the sense that you define these social performance indicators and then break them down through the organisation,’ he said. ‘This means you don't rely on the goodwill and the niceness of individual employees to be part of the mission, but once a year in their performance evaluation they have to show what they did in regard to environmental performance etcetera to define the social contribution.’
As consumers become more socially conscious, they’re likely to help push companies towards more ethical business practices. For instance, Kaylene pointed out that NAB stakeholders are now asking how the bank is managing environmental and social issues, and businesses would do good to respond, particularly given the issues highlighted through the Royal Commission process.
While it was recognised that there is still a long way to go, the panel was bullish that a subtle change in thinking is taking place and that more socially responsible governance structures are likely to emerge in future. We look forward to continuing to explore the ethics of business in partnership with the Gourlay family and their visiting professors.
Read more about the Gourlay Professor in Ethics in Business program.
