How businesses can serve everyone, not just shareholders | Dame Vivian Hunt

44,995 views ・ 2020-11-10

TED


Please double-click on the English subtitles below to play the video.

00:13
Lately, a lot of chief executives
0
13208
2393
00:15
have promised to shift their business model.
1
15625
3226
00:18
They pledge to serve all stakeholders,
2
18875
3143
00:22
not just shareholders.
3
22042
2142
00:24
Investment return, they say,
4
24208
2393
00:26
will no longer take precedence
5
26625
2018
00:28
over the health and welfare of employees,
6
28667
2601
00:31
suppliers,
7
31292
1309
00:32
even planet Earth.
8
32625
1726
00:34
Not just in a crisis,
9
34375
1893
00:36
but every day.
10
36292
2142
00:38
This is a change that business absolutely needs to make,
11
38458
3976
00:42
but that does not mean it is going to be easy.
12
42458
2375
00:46
It's like going from being a young couple
13
46000
2101
00:48
to having kids.
14
48125
1726
00:49
When you're trying to make decisions
15
49875
1809
00:51
with just one other person in the relationship,
16
51708
2560
00:54
it's pretty straightforward.
17
54292
1684
00:56
Where should we have Sunday lunch?
18
56000
2059
00:58
What should we watch for the movie?
19
58083
1709
01:00
But when you add one child,
20
60625
2726
01:03
a second child,
21
63375
1518
01:04
new decision makers,
22
64917
1809
01:06
life gets complicated.
23
66750
2643
01:09
And each one has their own unique needs
24
69417
3309
01:12
and individual perspective.
25
72750
2268
01:15
We all know that you're not supposed to have a favorite child,
26
75042
4642
01:19
and that being fair doesn't always mean being equal.
27
79708
3792
01:24
It's one of the biggest challenges in parenting,
28
84750
2809
01:27
and in stakeholder capitalism.
29
87583
1792
01:30
Employees need to earn a living wage.
30
90458
3143
01:33
How else can they be confident that they can feed their families?
31
93625
4184
01:37
Pension fund investors need to earn a positive return.
32
97833
4060
01:41
Only then can they be sure
33
101917
1934
01:43
that they are managing the savings and retirement
34
103875
3101
01:47
of their investors responsibly.
35
107000
2018
01:49
Consumers want and deserve products and services
36
109042
3642
01:52
that are both affordable and safe.
37
112708
3042
01:56
And we all want a society and planet
38
116667
3059
01:59
that lets us breathe.
39
119750
1333
02:02
I have spent my career helping companies and their leaders
40
122333
4351
02:06
improve their performance,
41
126708
1810
02:08
particularly at times of transition.
42
128542
2333
02:12
We've all gone digital.
43
132208
2268
02:14
We've responded to new health care regulations.
44
134500
2684
02:17
We've improved their productivity,
45
137208
1810
02:19
made them more diverse and inclusive.
46
139042
2809
02:21
It took us a while to learn
47
141875
1518
02:23
that you can't actually make a company more digital
48
143417
3684
02:27
by appointing a chief digital officer,
49
147125
3059
02:30
or that a chief diversity officer
50
150208
2393
02:32
could not single-handedly make a company's culture more inclusive.
51
152625
4292
02:37
So we already know that we cannot just appoint a chief stakeholder officer
52
157792
5517
02:43
if we really want to serve all stakeholders.
53
163333
3185
02:46
Instead, we need to reset.
54
166542
2416
02:49
If we really want to serve stakeholder needs,
55
169958
3268
02:53
we need to get everyone involved.
56
173250
1708
02:55
There are no quick fixes,
57
175917
1892
02:57
but I do have a few ideas.
58
177833
2518
03:00
Let's start at the top: the boardroom.
59
180375
2768
03:03
This is where a company's strategy is set and governed,
60
183167
3809
03:07
and if all stakeholder needs aren't accounted for here,
61
187000
4226
03:11
really, nothing's changing.
62
191250
2000
03:14
By definition, a board can stand in the way
63
194592
3676
03:18
of serving all stakeholders.
64
198292
2458
03:21
Why?
65
201583
1393
03:23
Because often, a board is elected by shareholders.
66
203000
3292
03:27
It represents their interests.
67
207125
2143
03:29
It's there to act on their behalf.
68
209292
2541
03:33
That's not just a dictionary definition.
69
213208
2084
03:36
It's enshrined in law in the US,
70
216125
2393
03:38
and this can really limit
71
218542
1684
03:40
how much change a CEO or board can effect
72
220250
3726
03:44
if they want to serve the needs of more stakeholders.
73
224000
3934
03:47
For years, if we're honest,
74
227958
2435
03:50
we've been ticking boxes:
75
230417
2226
03:52
ethnicity, age, gender.
76
232667
2916
03:56
We've been looking for people who look different,
77
236417
3101
03:59
but boards still do the same thing.
78
239542
3142
04:02
They look after the interests of shareholders.
79
242708
3185
04:05
We don't need tokens.
80
245917
1851
04:07
We need people who truly understand the experience
81
247792
4476
04:12
and represent the diversity of our stakeholders.
82
252292
3851
04:16
Corporate boards can learn a thing or two from the nonprofit world.
83
256167
3851
04:20
I chair a charity, Teach First.
84
260042
2976
04:23
It's an educational charity that produces outstanding teachers
85
263042
3351
04:26
and schools.
86
266417
1476
04:27
Our board includes a wide range of skills:
87
267917
3333
04:32
former civil servants,
88
272667
2392
04:35
activists, teachers, ambassadors,
89
275083
3560
04:38
technologists.
90
278667
1434
04:40
Some of them on paper have very little
91
280125
2434
04:42
that's an obvious fit for an educational charity.
92
282583
3560
04:46
But they each have real experience with our stakeholders.
93
286167
4434
04:50
Every board is different.
94
290625
1292
04:52
Imagine a world where corporate governance was very different than today:
95
292917
5101
04:58
community leaders sitting on the boards of their local bank;
96
298042
4142
05:02
moral philosophers advising social media companies;
97
302208
4185
05:06
environmental activists as directors of global energy companies.
98
306417
4851
05:11
CEOs keep making pledges.
99
311292
2559
05:13
They keep talking about social purpose,
100
313875
2601
05:16
but real change won't happen
101
316500
2226
05:18
until we change who governs
102
318750
2518
05:21
and for what purpose.
103
321292
1833
05:24
We have to change the laws of incorporation that limit us,
104
324208
3476
05:27
and remember who we really serve.
105
327708
2417
05:30
Next, let's talk about the big E,
106
330750
3518
05:34
the environment.
107
334292
1767
05:36
Sustainability goals have been written into annual reports all over the world.
108
336083
4560
05:40
The goals are very lofty,
109
340667
1684
05:42
and very, very long-term,
110
342375
1875
05:45
and none of them will be accomplished
111
345167
2226
05:47
if they don't have real steps along the way.
112
347417
2851
05:50
It's like saying,
113
350292
1392
05:51
"I'm going to run a marathon, or a 5k, sometime in the future."
114
351708
4042
05:56
No one is going to believe you until they see you get off the couch,
115
356558
4001
06:00
start training,
116
360583
1351
06:01
putting in the miles every single day.
117
361958
2834
06:05
CEOs need the same thing.
118
365542
2642
06:08
They need concrete, achievable, measurable goals,
119
368208
4185
06:12
and they need to share the data and progress along the way.
120
372417
3166
06:16
Being green is good for the bottom line in the long run,
121
376958
3851
06:20
but it requires investments,
122
380833
1768
06:22
and those have to be shared.
123
382625
1792
06:25
Brazil-based Natura is the world's fourth largest cosmetics company.
124
385042
4476
06:29
They've got the usual profit and loss statements
125
389542
2476
06:32
for the investors and the executive,
126
392042
2142
06:34
but it's their other two P and Ls
127
394208
2185
06:36
that make them a little bit special.
128
396417
2559
06:39
One measures how well they do for the environment.
129
399000
3518
06:42
The other looks at their impact on society.
130
402542
3851
06:46
They measure everything:
131
406417
1642
06:48
seeds planted,
132
408083
1685
06:49
jobs created,
133
409792
1851
06:51
rubbish thrown in the bin.
134
411667
2309
06:54
Shell, the Anglo-Dutch energy company,
135
414000
2601
06:56
is another example.
136
416625
1518
06:58
They figured out what many of us already knew;
137
418167
3309
07:01
it's not good enough just to look after your own emissions.
138
421500
4226
07:05
In fact, their emissions accounted for about 15 percent
139
425750
3226
07:09
of their system emissions.
140
429000
1976
07:11
So they changed.
141
431000
1351
07:12
Working with activists and pension funds,
142
432375
3434
07:15
they set three-year rolling goals
143
435833
2351
07:18
with progress markers year by year.
144
438208
2834
07:21
By 2050, they hope to reduce their net carbon footprint
145
441750
4434
07:26
by almost two thirds.
146
446208
1518
07:27
That is a major reduction.
147
447750
1333
07:29
Initially, these targets are linked to the bonuses
148
449917
3434
07:33
of their top 150 decision makers,
149
453375
2458
07:37
and over time the pay of nearly 17,000 employees
150
457250
5601
07:42
could be linked in part to how they treat Mother Earth.
151
462875
3833
07:48
It's still early days for this industry
152
468542
2434
07:51
and many of these initiatives.
153
471000
1976
07:53
Success will depend on how well we stay the course
154
473000
3768
07:56
when the investments become more significant,
155
476792
2434
07:59
when stakeholders disagree,
156
479250
2143
08:01
or when competitors start catching up.
157
481417
2666
08:05
Let's spend a little bit of time on a stakeholder
158
485542
2351
08:07
who is sometimes hidden,
159
487917
1684
08:09
and those are our suppliers.
160
489625
2268
08:11
They are the connective tissue underneath many companies:
161
491917
4101
08:16
Uber drivers, widget makers,
162
496042
2267
08:18
service employees.
163
498333
1334
08:20
They're like an invisible life force that power our economy,
164
500583
3726
08:24
and one thing we know for sure
165
504333
2310
08:26
is that the success or failure of your business
166
506667
2601
08:29
depends on your suppliers and partnerships.
167
509292
2559
08:31
It's a painful lesson that many hospitals,
168
511875
2393
08:34
including in the US and UK,
169
514292
1809
08:36
will take from COVID-19.
170
516125
1542
08:38
In pandemics, robust, agile supply chains
171
518500
3559
08:42
deliver the masks, ventilators,
172
522083
2810
08:44
testing kits and vaccines
173
524917
2559
08:47
that we all need.
174
527500
1559
08:49
It saves lives,
175
529083
1768
08:50
and it helps to reopen our economy.
176
530875
2875
08:54
Suppliers don't just matter when we're in a crisis.
177
534333
3518
08:57
If you really want to scale your positive impact,
178
537875
2684
09:00
you have to look beyond the walls of your company.
179
540583
2893
09:03
BHP Billiton,
180
543500
1309
09:04
the Australian mining company,
181
544833
1726
09:06
did just that when it made a commitment
182
546583
2185
09:08
to end gender imbalance in its workforce by 2025.
183
548792
4351
09:13
It decided to encourage, or kind of nudge, its suppliers into also participating
184
553167
5684
09:18
by providing training and technology.
185
558875
2250
09:21
In Chile, Kal Tire
186
561875
2184
09:24
helps to change the enormous tires
187
564083
2560
09:26
on BHP's trucks.
188
566667
2416
09:29
It is a very physical, demanding, dangerous job,
189
569125
3434
09:32
and to be honest with you,
190
572583
1393
09:34
not that many women were even interested in the job.
191
574000
2750
09:37
The two companies change that.
192
577583
2143
09:39
First, they developed a mechanical arm.
193
579750
2309
09:42
And then they proactively encouraged women to apply for the job.
194
582083
4125
09:47
Now, Kal Tire is just one company.
195
587375
3458
09:51
It's an example.
196
591792
1517
09:53
BHP Billiton has thousands of suppliers,
197
593333
3685
09:57
and if you really want to engage your supplier network,
198
597042
3309
10:00
you can use incentives to get them engaged.
199
600375
2958
10:04
Today, Kal Tire illustrates
200
604125
3476
10:07
how well that can be done,
201
607625
2393
10:10
and across BHP's supplier networks,
202
610042
2809
10:12
women are now 15 percent more likely to get the job
203
612875
3684
10:16
than they were even a year ago today.
204
616583
2209
10:20
Suppliers and partnerships
205
620083
1959
10:23
will make or break your business.
206
623000
2393
10:25
In good times, they're the key to your success,
207
625417
3059
10:28
scaling it worldwide,
208
628500
2018
10:30
and in bad times, they're the key to your survival.
209
630542
3291
10:34
If suppliers are a hidden stakeholder,
210
634792
2559
10:37
then customers are probably the most visible.
211
637375
2417
10:41
But when shareholders rule supreme,
212
641333
2476
10:43
some companies may have an incentive
213
643833
2185
10:46
to focus on customers' short-term desires
214
646042
3476
10:49
rather than their long-term needs.
215
649542
1916
10:52
Consumption of processed food has taken off around the world,
216
652500
3976
10:56
and with it,
217
656500
1268
10:57
global obesity rates have increased.
218
657792
1833
11:01
That's why the Access to Nutrition Foundation now tracks the salt, fat, sugar
219
661292
6851
11:08
that global food and drink companies include in their products.
220
668167
3476
11:11
They also track whether they market them responsibly.
221
671667
2791
11:15
I think it's like measuring the calories consumed
222
675458
2601
11:18
for every dollar these companies earn.
223
678083
2125
11:21
Companies that have been paying attention to this
224
681250
2351
11:23
have begun to make changes,
225
683625
1726
11:25
including ingredients and formulations.
226
685375
2768
11:28
Nestle reduced the sugar in its breakfast cereal.
227
688167
3642
11:31
Unilever reduced the volume and calories in its ice cream.
228
691833
4893
11:36
Now, I'm not sure that's a good idea,
229
696750
2809
11:39
but I can tell you it takes creativity and a little bit of investment.
230
699583
3334
11:44
We know that consumer needs change over time,
231
704500
4934
11:49
but companies that make these investments proactively
232
709458
3060
11:52
can be better positioned in the long term, even for shareholders.
233
712542
4476
11:57
As we all have tried to improve our eating habits,
234
717042
3226
12:00
tried to eat less ice cream,
235
720292
1726
12:02
these companies were well-positioned to capture that market.
236
722042
3267
12:05
They were ahead, more competitive,
237
725333
2393
12:07
and able to be more relevant.
238
727750
2851
12:10
It also aligns with governments,
239
730625
1893
12:12
many of whom have looked at nutrition labeling,
240
732542
2559
12:15
exercise programs, or even sugar taxes
241
735125
3018
12:18
to encourage healthier eating.
242
738167
1666
12:20
If customers are stakeholders,
243
740917
2791
12:25
then they should not be harmed
244
745417
2892
12:28
by the goods, services
245
748333
2435
12:30
and products we produce.
246
750792
2267
12:33
It's that simple.
247
753083
1417
12:35
For stakeholder capitalism to really work,
248
755542
3642
12:39
we all need to see ourselves as chief executive officers.
249
759208
3459
12:43
If we really want change,
250
763583
2060
12:45
we have to be willing
251
765667
1500
12:48
to bear the backlash.
252
768625
1893
12:50
We're not always going to get it right,
253
770542
1916
12:52
and that's OK.
254
772875
1250
12:54
Real, substantive change takes time.
255
774750
3667
12:59
The right answer keeps changing.
256
779292
2333
13:02
But we have to try to do better.
257
782917
2583
13:06
There's a quote that I love that really captures
258
786625
2393
13:09
the essence of this moment.
259
789042
1333
13:11
It's by the American poet Gwendolyn Brooks.
260
791208
2875
13:15
"We are each other's harvest.
261
795167
2809
13:18
We are each other's business.
262
798000
2351
13:20
We are each other's magnitude and bond."
263
800375
3417
13:25
Business is a set of ever-changing human bonds
264
805417
4601
13:30
through which we plant and grow and reap.
265
810042
5017
13:35
Our harvest is our lives and livelihoods,
266
815083
3101
13:38
our civil liberties, our skills and communities.
267
818208
3709
13:42
Business is what we make of it.
268
822458
2334
13:45
Let's hit reset
269
825875
1976
13:47
and serve all stakeholders.
270
827875
1833
13:50
Thank you.
271
830542
1875
About this website

This site will introduce you to YouTube videos that are useful for learning English. You will see English lessons taught by top-notch teachers from around the world. Double-click on the English subtitles displayed on each video page to play the video from there. The subtitles scroll in sync with the video playback. If you have any comments or requests, please contact us using this contact form.

https://forms.gle/WvT1wiN1qDtmnspy7