Arun Sudhaman 17 Jan 2017 // 4:21PM GMT
DAVOS — Lord Michael Hastings has spent more than a decade overseeing KPMG's global citizenship initiatives, after serving as the BBC's first head of CSR. A former BBC presenter, Hastings also spent seven years leading the corporation's public affairs before joining KPMG in 2006.
Hastings sat down with the Holmes Report in Davos to discuss the scepticism that can still colour perceptions of business as a force for good. He explores why perceptions of inequality remain a key driver behind this, but also believes that business leaders and the media must accept their share of responsibility too.
You said in 2011, that businesses need to take note of Occupy Wall Street. So does the populism we've seen over the past 12 months surprise you?
We couldn’t live in a more information-available world. You can access anything you care to access. Yet, when it comes to the factual decisions that affect people's voting habits, the facts have not been the cause or the basis of decisions people have made.
The perception has been that things are worse. It’s not the case, employment has never been at a higher percentage across the UK and the US and migrants are good for economic growth. Facts seem never to get in the way of prejudices and concerns.
The NGOs, with whom we have very important relationships as partners and clients, have been warning us for a very long time that income distribution problems are going to begin to hit us like a vicious bolt. The latest Oxfam report — that disparity of wealth distribution is something that President Obama highlighted strongly. Therein lies the opportunity because many of those high wealth earners who are very important men and women in their own right — they are also passionate about making sure their resources are deployed to solve problems. The Bill & Melinda Gates Foundation — they are not sitting on the wealth storing it up for personal gain, they are distributing it meaningfully. Although one of the perceived ugly sides of globalisation is that there are too few with too much.
What Occupy Wall Street did was to warn the corporate world that there is a discontent of misunderstanding, but a core sense of "are my work prospects secure or insecure?"
The companies that we work closely with — those who are aligned with the UN Global Compact or have backed the Sustainable Development goals — that vast array of major global corporations, all of them are passionate about driving the inclusion and change strategies that are going to bring the poorest into a place of prosperity. Companies are heavily invested in what used to be an agenda driven only by the UN and governments. We have this new alliance [between private and public] which is a positive thing.
If business really is stepping up, then is it simply the case that they should be making their case better?
That might be too simplistic. To make your own case strongly — be your own PR agent. Tell your own story. Don’t rely on intermediaries to tell your story. There is a need for proactivity. And that proactivity is being embraced by the sharpest companies. Because sometimes information is partially reported and sometimes it’s distorted.
The world is full of platforms, where chairmans and CEOs can articulate their message. And they need to do more of that. The World Economic Forum is a good example of that.
But I think there is another side to it. There’s no question social media has it’s great upsides and downsides. The one upside is you can get a positive running campaign about effective things that are being done around the world. Like Global Citizen, heavily backed by some of the largest corporations, is able to get governments and networks of companies to move. We’re in a different space. We used to rely on putting out press releases. Now there are platforms that can achieve that without the intermediary of the press.
There is a sneering cynicism from the media. It’s almost impossible now to get senior executives to do major media interviews. We need a different culture of journalistic inquiry, we need to help the public understand some of these issues.
If there is a disconnect between how business is behaving, and how it's perceive to be behaving, do you think the media is responsible?
Of course, there is an element that what is carried and reported is about the downsides of corporate behaviour — that is going to have an effect. It’s far harder on the news pages to see the positive impact stories. To their credit, Fortune magazine has published their own Impact Report. In a magazine that is primarily about financial performance, it’s saying that prosperity is about more than financial measures. There is a positive story to be told out there. We need to get that story out.
I do think business leaders need to be better advocates themselves. To take those opportunities, to blog, to tweet. We want to help the public understand that the corporations they rely on — if anybody needs food and water in any industrial environment, you’re going to a company. When we need electricity, you’re going to a commercial company. Corporations are providing the fabric of everyday life. We need those corporations to be positive and impactful.
There is a media funnel challenge, there is a need for better advocacy. There is a lot of media out there that is heading in the right direction. With the pressures of 2030 upon thus - can we get to a world where people are not starving, not dying in the Mediterranean, where ppl do have clean water available, where every child has the chance to attend a school, where illiteracy is eradicated - isn’t that a better place to be, than to sit cynically wondering whether anyone has done anything negative?
What is your advice for business leaders who are wary of taking on a higher profile on these issues, because it might make them a target?
I will never forget the [Virgin Trains] Cumbria rail crash in the Northwest of England that took place on a Saturday morning. People died. Richard Branson was in Switzerland, got to England two hours later and stood in front of the cameras and said I’m responsible for this. We will resolve it. All that kind of potential ‘nasty business leaders’ [coverage[ was swept away in a second.
Virgin took the hit, but they resolved the issues. They continue to be a successful company to this day. That’s a great example of where a business leader says, I’m not going to hide behind legal culpability. Corporate execs need to decide that the role of their legal departments is to advise, not to decide. Too often the fear of taking responsibility means there is a restriction on the right to take responsibility.
I do feel, to the credit of BP, when there was that major disaster, within two days the company had issued a full commitment to responsibility. And it has cost them a fortune to put it right. But they have done, remained consistent, fulfilled their obligations to the people in the community and taken the hit in the pocket of the shareholders. The best corporations will garner those examples. Not hide until endlessly and relentlessly pushed over the edge. Because the media can push to the point of persecution. Far better to be on the front foot. It’s always better to be on the front foot.
You were one of the first CSR heads. Do you feel that the 'CSR department' is redundant as businesses reorient themselves around purpose?
The old notion of CSR tended to mean an adjunct department somewhere linked to the PR and marketing mix, which did the good things of volunteering and philanthropy. That is the small beer of good commitments. If there was a corporation that didn’t do those things, I think they’d be in the wrong place. Individuals need mechanisms to give and opportunities to give time.
In the 11 years since I’ve been at KPMG, I’ve been railing against CSR and standing up for citizenship. Every business is a citizen — that means every one of us within our business has an opportunity to make a difference. To the world outside. Business should seek to do that. To give you a very powerful example — we chose to significantly reduce our carbon imprint. We’re not a mass polluter. But we consume energy. So we wanted to bring awareness to our people and cut our energy demand. We were 123k people, we’re now 189k, but we’ve cut our carbon by 37%. We did so quite decisively, so that we can be positive contributors to a better world.