The boardroom is under challenge as never before. This is, to put it mildly, a very interesting time to be a company director – and businesses can no longer ignore the ‘social market’, writes Rob Campbell.
Unless they are comatose, company directors must be hearing the chimes of change ringing in the wind. The climate change fight is on. So too are existential challenges from a wide range of those excluded from business class on the trip of life.
There is no such thing any more as “business as usual”. Transactions, behaviours and processes which may a short time ago have been BAU (Business As Usual) are now the new BAU (Banned And Unacceptable). This can be profoundly shocking. These are not matters which can be risk managed by director’s insurance, political lobbying for protection or public relations diversion.
The challenges cannot be met by gluing a well drafted set of “Values” or “Purpose” onto the front of the Annual Report. They cannot be met by renaming board committees or senior executive titles. It’s even quite probable that the time has passed when appointing “diverse” directors to the board will be adequate unless these new appointments bring the views from the market into the boardroom.
Now passive opinion has jumped the fence. Individuals and communities feel empowered or desperate enough to be prepared to challenge more directly. To abseil and redecorate our buildings, occupy our properties, block our streets.
I slipped that term “market” in. I think that the market for business has changed. We used to think about the market as being the market comprising consumers of our products, and perhaps as the labour market from which we derived our staff, the property market on which we bought or leased real estate, or the finance market from which we got our equity or debt funding and which fed us back a view on our commercial value. Those markets still exist and each is vital to our activities of course.
But we also operate in a market of opinion, the social market. To a large extent this market did not greatly impact most business. In the old model we could conduct our old BAU within the regulated limits in the other markets. Get on with things. Deal with localised or limited interventions through normal channels. The market of opinion, what the community thought of our normal activities, was expressed in controlled and measured ways.
Now passive opinion has jumped the fence. Individuals and communities feel empowered or desperate enough to be prepared to challenge more directly. To abseil and redecorate our buildings, occupy our properties, block our streets. Put simply, to reject the old BAU. The challenge is as much existential as it is economic. I think that climate change activism and a variety of other forms of community challenge to the old BAU are the new normal.
Few of these challenges will be seen from within the boardroom as constructive. Many are not intended to be. Business has to respond positively to the challenge or fuel the discontent and rejection. Business has to change and not think that police lines or getting more friendly faces in the Beehive will suffice. One of the virtues of business is its ability to change, to innovate and grow. It’s not always what business does, but it is capable of it.
The first step is to see and hear clearly what is happening in the social market. Different people in the boardroom will help that, as will different people in management teams. Some brave people will have to take the lead. My guess is that most of those brave people will not look or sound like the typical C-suite or boardroom inhabitants of today.
Adam Smith wrote that it is not from the generosity of the baker that we get our daily bread. I think that is, and will, continue to be true. But the baker will not get away with serving up chemically adulterated or nutritionally deficient bread, exploiting his apprentices in the baking process and polluting the air from a coal fired stove. She will hear the voices of the social market.