“I think it would be odd if there wasn’t cynicism given the track record of big business,” says Brunswick Chairman Sir Alan Parker. But, he adds, “Right now, you are witnessing a change unlike anything I’ve seen in my career.”
The question of how to fix capitalism may be as old as capitalism itself. Yet there is a sense that this moment really is different—that corporations are starting to focus their resources and brainpower and determination toward the needs of society and the planet.
Is this true—or is it just PR? What more needs to be done broadly, and what is the role of business in that change? Those were some of the questions put to six panelists at the 2021 Paris Peace Forum, in a conversation titled “Financing the Ecological and Social Transition: How to Reform Capitalism.”
The conversation—a full recording of which is available online—was moderated by Nora Müller, Executive Director of International Affairs and Director of the Berlin office for Körber-Stiftung, a nonprofit organization.
Among those participating was Brunswick Chairman Sir Alan Parker, whose responses have been lightly edited and condensed.
Many attempts to reform capitalism have failed. Now, though, there seems to be a different sort of atmosphere. Are we really at a turning point?
I think we may well be. We are only glimpsing the real risks of inequality—COVID has brought them to the surface in a vicious way. Climate change is going to highlight them even more.
The challenge to the system, as I see it, is really asking: What are the desired outcomes we’re looking for? And then, what is the role of government, what’s the role of business and the market in delivering those outcomes?
Encouragingly, we are seeing business play a greater role beyond simply creating profits for its equity capital holders. It has moved to a multi-stakeholder world. They are taking on different responsibilities. But this is the beginning of a journey for business; we’ve got a long way to go.
Some cynics say that this whole transition from shareholder capitalism to stakeholder capitalism is only a PR stunt. Is that cynical, or is it justified?
I think it would be odd if there wasn’t cynicism given the track record of big business. It’s created a huge amount of prosperity over the last 30 to 50 years, but at a huge cost. There’s no doubt about that. And transitioning is not an easy thing.
Right now, though, you are witnessing a change certainly unlike anything I’ve seen in my career. There is not a major board in the world that really believes that this shift is about decreasing the demand to perform financially. It’s not. It’s about delivering that same financial performance—but the other demands, the societal issues, companies have to perform on those too; they have to raise their game. And that is the change. You’ll be very brave, or perhaps something else, as a board or as a chief executive not to recognize that.
I do believe we are resetting business’s role in society. Business cannot take the position—and it should not think it can take the position—of government, but it can take on a much larger role. It has to recognize the true externalities and be clearer about what it’s trying to achieve at a social and political level.