Saturday 30 October, 1.30pm until 3.00pm, Lecture Theatre 2
Following the financial crisis, it is no surprise that the 2010 Edelman Trust Barometer cited the banking sector as the least trusted, closely followed by insurance. The report identified trust and transparency as being as important to corporate reputation as the quality of its services and products. Following the Deepwater Horizon disaster, it is equally no surprise that many believe BP’s reputation is blemished. Across society, big business is often seen as paying lip service at best to its social responsibilities, focusing instead, it is argued, on making a quick buck at our expense. Young people in particular are harsh critics of the immorality and greed of the world of business, materialism and consumerism, seeing bankers as responsible for bringing about the recession. Protests like the one at the G20 summit express this disdain for bankers as do the ‘fat cat’ jibes of Obama and the ‘Scargills in pinstripes’ quips of Vince Cable. Fred Goodwin and Tony Hayward have become the poster-boys for contemporary anti-corporate hatred: emblematic of levels of greedy self-interest and corporate indifference that society seems no longer willing to stomach.
The ongoing backlash against, for example, levels of executive pay, may seem rather naïve, though. On one level, it should be no surprise to any of us that banks are in the business of making money by borrowing cheap and lending dear or that Big Oil is about making profits. On another, in recent years, many companies have actually tried to change their spots by adopting corporate social responsibility policies (CSR) as a means of improving their image with customers and their employees. BP went so far as to rebrand itself as ‘Beyond Petroleum’, was spending up to US $125m annually on CSR, while its former chief executive, Lord Browne, has argued that, ‘a business needs a greater purpose than just making profits’.
Might such statements paradoxically increase cynicism and undermine trust? Might we actually welcome a company refreshingly honest enough to proclaim they were in the business of making profits by selling us stuff we want, and that didn’t add a premium to its prices to cover the costs of CSR, environmental sustainability and self-denial? Should we even worry about trusting big business as long as its products are good, its contracts honoured? Or is there something inherent in big business that deserves our suspicion? Must we argue for increased transparency and accountability, enforced by stern regulation, in order to protect our interests? Should business be forced to be socially responsible, and what does that mean? Can we ever really trust big business, and do we really need to?
The session will be introduced by Richard Janes, director, banking and finance practice, Hotwire.
Listen to session audio:
chief European commentator, Wall Street Journal; author, The Credit Crunch: how safe is your money?
corporate affairs director, SABMiller
director, banking and finance practice, Hotwire
economist and business manager; author, Creative Destruction: How to start an economic renaissance
senior project manager, Chartered Institute of Personnel and Development; FCIPD
In an era of increasing connectivity and intensifying public scrutiny, trust is the lifeblood of any organisation – a critical asset in ensuring a business’s long-term survival and success. The aftermath of the recent financial crisis has demonstrated both the vital importance of trust, and the severe consequences to economic prosperity when it is undermined by perceived untrustworthy behaviour.PwC, October 2010
The past two years have seen radical change in the relationship between business and society. Events ranging from the credit crunch to oil spills to ‘payment for failure’ have put businesses’ behaviour under the microscope. The widespread perception of a growing disconnection between corporate behaviour and ethical conduct has triggered a sense that global public trust in business has declined.PwC, October 2010
On the heels of the Great Recession, when trust in business sunk to historic lows, the 2010 Edelman Trust Barometerreports a modest global rise in trust in business.Edelman, 2010
Trust is integral to effective leadership – leaders must motivate and inspire people to follow them. Trust creates more efficient organisations, reducing staff turnover, absenteeism, stress and the costs of doing business. And it is leaders who build trust. At times of great uncertainty and threat, only the most trusted leaders will inspire the confidence and commitment needed to ensure success.David Pardley, Institute of Leadership and Management, 2010
In many ways, banks have a simple role in society. We help customers take appropriate risks. Our business objective is to make it easier for people to do some of the things that matter to them and which, collectively, can have a significant impact on economic growth.John Varley, Financial Times, 23 September 2010
Vince Cable has insisted he has a pro-business agenda but refused to apologise for attacking excessive bank bonuses paid toGavin Stamp, BBC, 22 September 2010
When Tony Hayward gave his valedictory press briefing this week, the departing BP chief executive said the Gulf of Mexico crisis had shown the company to be 'a model of corporate social responsibility' but it was 'not a great PR success'Chris Blackhurst, Evening Standard, 30 July 2010
We have entered a sustained period of austerity that has made an impact upon almost every area of national life. Yet those who work outside the City of London see its employees living just as they did before the global crisis, and apparently expecting to continue doing so.Max Hastings, Financial Times, 14 July 2010
The developing world has much to teach us about how to do business responsiblyJohn Connolly, The Times, 5 July 2010