Beyond shareholders interests, “Capital For Purpose” 5th Industrial Revolution is here.
“the business has lost its way over the last 60 years and forgotten that it was established to perform a public purpose and serve society. The emergence of individual and institutional shareholders in the 20th century has led to a focus on corporate profits and shareholder value instead” Prof. Colin Mayer.
Beyond profit, what is your purpose? A few weeks now since I attended the 49th St. Gallen Symposium themed “Capital For Purpose”. Reflecting on how companies and organizations can realize the better version of themselves by reinventing their purpose, thinking beyond profit and create shared prosperity with the community. In a simple way, getting them to think beyond the interests of the shareholders.
A month or so I wrote an article about leadership and the future of African continent and introduced a concept of “Amalgam Leadership”, a leadership approach which is a blend of old experience and wisdom with new age knowledge, energy, and skills. The 49th St. Gallen Symposium walked the talk, hundreds of leaders of tomorrow engaged with leaders of yesterday and today discussing most important global topics; growth of populism, climate change, the rise of China, increase of unemployment, trade wars and the aging population. The idea was, how do we work together to realize a better world for everyone by rethinking our purpose.
From the symposium, I realized the competitive advantage Africa has with its youthful population if well explored. I also learned as much as developed North and developing South share some fears, the two sides have contradicting fears, encouraging more global level discussions to balance expectations to align our agenda. Africa needs to rethink where to invest her capital if we are to realize the potential of our youths. The focus should be on the 3Ps, People, investing in human capital, skilling and reskilling of youths, Power, investing on infrastructure and energy, and Policy, investing in leadership and strategies for prosperous growth.
What was most interesting to me was the approach adopted by the symposium to have open and contradicting conversations following principles of dialogue, focusing on intellectual contents based on facts and scientific evidence. The diversity of the speakers and intergenerational dialogue between three different generations of leaders was the key to the success of the symposium. I wish to see more discussions of such nature happening in Africa to balance the needs and the priorities of the old and the new generation. Those who have experienced the challenges of the past, those who are living the current challenges sit together to learn past challenges, to address existing ones and to plan for the unexpected.
Pushing innovation to work with inclusivity and purpose is one of the elements of the 5th Industrial Revolution, consumers are pushing businesses to be the driving force of social goods. Companies of the future will not be ranked according to the amount of shareholders value they generate but rather to the socioeconomic and environmental impact, they create. This will only happen if there is the intention and moral clarity to make technology work for everyone to create the intended impact.
What was not very clear to me as a founder of a company is who defines the purpose? If the owners of the business (shareholders) define the purpose then what if it is not the right purpose or they are underquoting their mission? If the regulator defines it, how do you control the purpose? If we let the community decide it, do they have the control? How do we get businesses to think beyond profit? How can we go beyond CSR departments to make creating impact the core mission of our businesses is the question we all need to answer nobly.
You can also check my recap video courtesy of the St. Gallen Symposium.
- Community and partners of the St. Gallen Symposium.
- Prof. Colin Mayer | Prosperity: Better Business Makes the Greater Good
- The World Bank Blog | Data Blog.
- Pratik Gauri & Jim Eerden | The European Sting and World Economic Forum)