A Call to Arms

At Faneuil Hall, conference participants say corporations should toss priorities, change ground rules

By Danielle Lee

It did not take long for the 200 participants at the Summit on the Future of the Corporation in Boston Nov. 13-14 to collectively answer the conference’s banner question: “Are corporations equipped for the 21st century?”

“Not even responsible companies are prepared for the 21st century,” said panelist Henry Mintzberg, Cleghorn Professor of Management at McGill University in Montreal.

SustainAbility co-founder John Elkington put it more succinctly during the same opening discussion: “The answer to the question is no.”

Panelists, speakers and attendees hashed out the reasons in a town hall format of open discussion that Corporation 20/20 Co-founder and Director Allen White joked was more British Parliament than U.S. Congress in its moments of impassioned audience applause and comments. Corporation 20/20 and the Society for Organizational Learning sponsored the event.

Those make-or-break issues that participants said need to be addressed included climate change, corporate compensation and employee retention, among others.

Many speakers found inspiration in the venue, historic Faneuil Hall, where some of the nation-to-be’s first protests were organized and greatest orators spoke. Conference speakers likened the need to overhaul American corporate priorities to actions taken at the Boston Tea Party.

“We need to change the rules of the game,” said Charles Handy, author and former executive at Royal Dutch Shell, in the first day’s opening remarks, “because they desperately need to be changed.”

Handy told of working at Shell when the company was reaping an 80 percent profit margin.

“The more inefficient we are, the richer we get,” he had said to the marketing manager. “This must be immoral.”

“This is business,” the manager had replied.

For his part, Handy, like many of the summit’s speakers, advocated corporate moral purpose.

Other speakers shared even more radical ideas.

In the opening panel, corporate globalization author David Korten discussed a massive reallocation of funds from “financial back into living capital.”

This new economy would be values-based and require the wealthy to “voluntarily and universally accept negative financial returns” while government reclaimed its “essential role.”

Slightly less utopian was the exact role summit participants and speakers wished the government to take in this future.

Responding to a question about government regulation of big business in the “Catalyzing Change” second session, Citi Chief Information Officer Marv Adams said corporations require some government-aided structure, but not too much, and that “continuously adapting regulations is critical.”

During the same panel, Darcy Winslow of the Nike Foundation added that business could not wait for government to move from taxation-based incentives to financial incentives.
Other speakers, like Henry Mintzberg, spoke of an even greater division.

“The most important role of responsible corporations is to reduce their role in our political and social lives,” Mintzberg said. “If you want to be responsible, get out of my government, get out of my social life.”

“There needs to be a separation of corporation and state,” agreed Corporate Ethic International Director Michael Marx in the “Change” panel. “Market fundamentalism has become a religion and needs to be out of government processes. And the wealthy people that are surrogates for these companies need to be out of the government systems.”

On the other hand, Damon Silvers, Associate General Counsel for the AFL-CIO, said about the hot-button issue of global warming, for example, companies cannot substitute for the role of government.

Pointing to inadequate government funding for alternative energy, he asked, “When oil is $150 a barrel, what will happen?”

Marx added that companies giving political contributions need to be stigmatized, and companies that fail to do well on certain extra-financial social and environmental ratings should receive similar publicity.

“We need to embarrass them,” Marx said. “But we can’t do that if we don’t have measures; we need measures.” He added that many major corporations do not object to external ratings, as long as there is a level playing field with competitors.

All participants agreed that companies’ employee base holds great value.

“Your real assets walk away in the evening at six o’clock,” said business strategist and former Royal Dutch Shell executive Arie de Gues. “You should be thinking all night: Will they be coming back tomorrow?”

The discussions continued into day two, when transformational change and new corporate designs were the topics of conversation.

Attendees also participated in several smaller breakout discussion groups that spanned both days. Speakers urged constructive dialogue, with author Korten touting the “amazing organizational talent in [the] room” that included eager members of NGOs, schools, corporations and media.

“Businesses need to think hard about moral purpose,” Adams later said. “When they do, employees come alive and want to be a part of it.”