‘Responsibility in Business’ – in Scotland

Scottish Flag shutterstock_91984709Scotland has a long history of thinking about responsibility in business so Glasgow was a fitting place to talk about it, not just because it is one of my home towns.  I found The Royal Philosophical Society of Glasgow both an amazing community organisation, attracting proficient speakers on a wide range of topics, and a wonderful, engaged audience.  Over 200 years old and with over 900 members, I was told they use the biggest lecture theatre in the whole of Glasgow.

Defining ‘responsibility in business’

I started by defining ‘responsibility in business’.  Whilst it could be about: morality, ethics and justice; transparency, accountability and good governance; minimising risk and delivering on strategy; or being a business which is successful in the long term: to me it is about the relationship between companies, society and the environment.  I start from the premise of wanting a just society, a beautiful and diverse natural environment and from recognising the power of global companies.

I asked the audience to consider three questions as I spoke:

  1. Why should businesses bother?
  2. Why do some businesses not bother?
  3. Should companies account for their impact on society and the environment and should they value the contribution that society and the environment make to their business?

I also asked them to think about how they could make a difference whether as a customer, employee or parent, grandparent, teacher or academic influencing the next generation.

I discussed the work of Adam Smith, a professor at the University of Glasgow in Scotland in the 18th Century.  Adam Smith was a moral philosopher, but more often referred to as the ‘father of capitalism’ an advocate of market forces and an enemy of government regulation.  I read more about Smith’s work being curious as to why (given that Margaret Thatcher apparently used to carry a copy of one of his books commonly known as “The Wealth of Nations” in her handbag), the University of Glasgow would name their Business School (where I used to work and am a visiting professor) after him.  In the Wealth of Nations, Smith refers to wealth as the well-being of people, he believed in morality, justice and doing good and advocated action when the rights of individuals are violated.  This is all compatible with responsibility in business, yet contradictory and incomplete interpretations of Smith’s work abound to shore up particular forms of capitalism. I argued that in any case Smith did not witness the globalisation, atrocities or crises on the scale that we have. (Not everyone agreed with that.)

When Robert Owen bought a textile factory in New Lanark in Scotland in the 18th Century he found five year old children working 13 hour days.  He stopped employing children under ten, reduced hours to a maximum of ten and built nurseries and schools.  When his business partners expressed concern that his changes would reduce profit he convinced a banker, Archibald Campbell, to lend him money to buy them out.  He later sold shares in the business to people who were happy with his approach to business.

Other local examples I drew on were Shell and its forced about turn on abandoning the Brent Spar in the North Sea and the Royal Bank of Scotland Group’s work in responding to stakeholders on social and environmental issues.  I spoke about: issues concerning leaders; global forces impacting on business; companies who are making the link between their success and their role in society and impacts on the environment; and, the role of integrated reporting, new ways of looking at value creation and integrated thinking in driving change in business.  Some of these ideas are discussed more in Sustainability and the Company of the Future.

The audience had a lot of good questions.  Professor Iain MacLeod later drew my attention to IESIS, a multi-disciplinary engineering body founded in Scotland and dating back to 1856.  (The list of world renowned Scottish engineers is phenomenal.) They have developed a model of professional engineering competence which he saw as linked to integrated thinking.  It is worth looking at and indeed accountants and engineers are arguably two of the most influential professions in the transition towards sustainable development and both need to think more broadly to achieve this.  And here’s a new booklet on sustainability reporting for SMEs from the Global Reporting Initiative for Dick Philbrick, a pioneer of a particular type of employee ownership.  And it was great to meet Heather Donald, Financial Analyst and Sustainability Coordinator  of the Glasgow Committee Ltd (the Organising Committee for the Glasgow 2014 Commonwealth Games) and another member of ICAS.  Scotland and its diverse people indeed have a lot to be proud of.

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