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The role of ethical business in helping government

Our crisis, not just “theirs”…

The Economist’s recent edition on capitalism and protest makes an important point.

Namely, that whilst we can blame the banks and financial non-wizards for getting us into some of the trouble we are in, mainly it’s due to governments overspending to stay in power and deliver on promises, over some 17 years of uninterrupted economic growth from 1990-2007.

The US over spent on wars and under budgeted on tax, whilst Europe simply over spent delivering services we couldn’t afford in the long term.

The banks make easy whipping boys, and god knows they haven’t helped themselves in terms of communication, transparency and solutions.

But governments are the far bigger problem.

If you’ve ever spent time with any politicians (I did some work  from 2006-8 with the current UK Government when it was in opposition) you realise several things:

1) They are generally hard working, smart people who mean well.
2) Ideology and ego are big problems for them. Very serious ones. They cloud judgement.
3) They are supposed to know about everything, so spend their whole time winging it (improvising).
4) They are now under pressure to make quick decisions with huge ramifications like never before.

Now I’m not defending our over-spending politicians here. But it is time to talk about solutions.

How can business help?

I wrote a report in 2006-8 on how business can help in emerging/developing countries beyond current practices. You can find it here.

And for the UK, I put together a group which suggested policy ideas in a report, later adopted by the Conservative Party in 2008 as some of what they would do when in power. That report is here.

Our Prime Minister endorsed it, but has not followed up to embed it properly into government operating systems. Being frank: Some influential NGOs have ridiculed our ‘Responsibility Deals’ idea as a corporate stitch-up because UK Government allowed them walk away from the process.

The world has moved on since early 2008 too, in very many ways.

On the one hand we have Western governance chaos, and on the other the rise of other economies, with their own instabilities, which have very different cultural preferences.

Here’s a presentation on what that can mean for business operating in some of those nations.

What can business do to help governments make better decisions? Here’s a few suggestions:

1) Group lobbying for broadly recognised positive change with real world solutions (Climate change action is one example of collective and consistent exhortation where not enough solutions/costs/benefits are outlined collaboratively. Pension fund reform is another key area. More on that here 32 minutes in)

2) Skills training for institutions, in a collaborative and multi-stakeholder fashion (See here for examples)

3) Collaboration, via industry groups AND wider society representatives, on universally agreed solutions that government might promote (or ignore) Here’s an example from our original policy report, not well implemented, but the basic idea was sound.

There are others. I hope readers will post ideas and comments as to which. This is not an exhaustive list.

Of course there are huge problems with big business getting involved in helping politicians make better decisions. The most pressing of which of course is the perception of undermining the democratic process.

I’m not sure it has to be that way though. If big business works with stakeholders openly and transparently there’s no reason why collaboration can’t lead to solutions. Business can play that important role of funding institutions which operate independently. The role of separate foundations with no corporate influence over them to help shape the agenda should not be underestimated.

It needs a firm hand from government and stiff backbone to stand up to lobbying from differing parties, but it can be done.

The current government in the UK has not done a good job so far in taking this forward.

Ideology, resource allocation, and a lack of competence has got in the way.

Job one for business is to convince government to take the collaborative approach, and its governance, much more seriously.

Job two will be to help deliver on the outcomes from genuine collaborations. And stop unhelpful, single-issue lobbying where it interferes with recognised overall sustainability progress.

I feel hopelessly naive writing this, like some kind of undergraduate asking why we all just can’t get along after one reefer too many.

But think about it: If big business doesn’t help drive change in an open and collaborative way, towards solutions, then who will?

We need well-supported representative institutions to be created to help find and manage solutions.

Our governments are just not up to scratch. We tried leaving it to them. Look where it got us.

Time to get more involved. CEOs need to be educated on why this messy collaborative stuff matters.

Those that will listen, can convince others.

Despite my criticisms in the past, folks like the World Economic Forum may be our best shot.

That is, if they can open up more and demonstrate they are prepared to operate in a bigger tent.

It feels like they are making progress in that direction. But others of their ilk are seriously lagging behind.

Perhaps a bit of pressure around purpose next time membership fees are due would be a good start?

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