CHAPTER 7

HOW TO MEET SOCIETY’S DEMANDS

Journalism is an ephemeral trade. In the days of print, people used to say that today’s news was tomorrow’s fish and chips wrapping. Even now, when online articles are supposedly preserved forever, much of what is written is soon forgotten. Not so a 1970 New York Times article by the economist Milton Friedman, which continues to be quoted more than half a century later. In its most famous line, Friedman, an economics Nobel Prize winner who died in 2006, wrote that business executives’ responsibility was to their employers, the owners of the business. ‘That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.’1

This view came to dominate US and British business and took increasing hold elsewhere in the last decades of the twentieth century and the beginning of the twenty-first. It was known as ‘shareholder primacy’ – that the interests of the shareholders took priority over those of any other group with an interest in the company, whether employees, customers or the wider society. Friedman wrote that, if a company executive thought that he (it was almost always ‘he’ in 1970) had wider responsibilities to society, he should exercise those by ‘spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities”, they are the social responsibilities of individuals, not of business.’ In other words, if, as a business leader, you want to be socially responsible, do it on your own time and with your own money.

There has been a remarkable change since then. The move away from Friedman’s view is one of the most significant changes in business life today. No leader can be unaware of it and much of their time will be spent dealing with the consequences. In many business minds, shareholder primacy has been replaced by a commitment to all stakeholders – customers, employees, the wider society and the environment, often expressed as ESG, for environmental, social and governance.

An indication of how big ESG has become is that PwC, one of the Big Four accounting firms, announced in June 2021 that it would increase its global headcount by a third – over 100,000 people – largely to capture what the FT called a ‘booming market’ in companies needing advice on how to behave responsibly and sustainably.2 Bob Moritz, PwC’s global chair, said that the firm had previously taken a narrow approach to ESG, concentrating on how companies reported it. ESG now needed to be deeply embedded in PwC’s work. ‘Every employee of PwC has to be familiar with the issues,’ he said.3

When did this change happen? When did it become part of the business mainstream? The idea of corporate social responsibility has been around for a long time, as we will see. But a turning point was the global financial crisis of 2008 and the failure of large institutions to understand how damaging their business practices had been, not just to their own institutions but to the world, which was plunged into a sharp downturn.

Suddenly, some of the greatest champions of shareholder primacy decided it wasn’t such a great idea after all. Jack Welch, who, as head of General Electric, had been a principal proponent, said, in the wake of the financial crisis, that he now thought shareholder value was, in fact, ‘the dumbest idea in the world’. Instead of shareholder primacy, he said, ‘your main constituencies are your employees, your customers and your products.’4

More than a decade on, many pro-capitalist leaders and organisations also now champion the idea of companies owing a larger range of duties. Jamie Dimon, chief executive of JP Morgan Chase, said in his 2018 letter to shareholders that ‘building shareholder value can only be done in conjunction with taking care of employees, customers and communities. This is completely different from the commentary often expressed about the sweeping ills of naked capitalism and institutions only caring about shareholder value.’5 The Business Roundtable said: ‘We share a fundamental commitment to all of our stakeholders.’ That included customers, employees, suppliers, communities and shareholders. Shareholders remained important, but the commitment to them should be ‘long-term value’.6 The Business Roundtable represents the chief executives of the USA’s largest companies, so is the support for wider corporate responsibility now universal?

Not everyone is convinced. At an FT Forums meeting, Martin Wolf, the FT’s chief economics commentator, said that company behaviour did not alter that quickly. ‘It’s going to be very, very difficult, I think, to change companies,’ he said. When companies were under pressure, as many were during the coronavirus pandemic, their priority was survival. ‘And when companies are fighting for survival, the first and, I think, in that situation, second, third and fourth priority becomes ensuring profit, positive cash flow and the ability to pay bills,’ Martin Wolf said.

Also, the interests of one set of stakeholders may be starkly different from another’s. Indeed, helping one stakeholder – customers, for example – may come at the expense of another, such as employees. As ­Martin Wolf pointed out, ‘a company that obviously is serving its customers spectacularly right now is Amazon. And I suspect there are many people around the world who benefit enormously from it and, as consumers, were absolutely delighted with how well it fulfils its purpose.’ And, yet, the way Amazon treats its employees is ‘not perhaps how we as consumers would really like it’.

Martin referred to reporting by the FT’s Sarah O’Connor who, in a 2013 exposé, wrote about Amazon staff in one of its English warehouses having to walk between 7 and 15 miles a day, picking out products for the company’s online customers. The workers were directed where to go by handheld devices which also measured their productivity. Some Amazon employees said they had blisters and sores on their feet.7

So, it is not just that leaders may have to deal with a conflict between corporate survival and serving wider parts of society; it is also that there may be conflicts between different sectors of that society.

In discussing how leaders should respond to this, it is worth looking at the history of this conflict between profit and social responsibility, because it is even older than Milton Friedman’s article.

WE’VE SEEN THIS MOVIE BEFORE

The idea that companies have a bigger responsibility than making money has been called many things over the years: corporate philanthropy, corporate responsibility, corporate social responsibility (CSR), sustainability, impact investing and now ESG. The argument over the proper balance between a company’s drive to make money for its shareholders and its duty to the wider world has been going on for more than a century.

In 1919, the Dodge brothers, two shareholders in Ford Motor, sued the company for not paying out dividends. Henry Ford, its founder and one of history’s most famous capitalists, said he preferred to use the company’s money to lower the prices of his cars and to expand the business. He denied that Ford’s only job was to make money for its shareholders. Instead, he said, its role was ‘to do as much good as we can, everywhere, for everybody concerned . . . and incidentally to make money’. The ­Michigan Supreme Court disagreed with Ford and ruled in favour of the Dodge brothers. The court said: ‘A business corporation is organised and carried on primarily for the profit of the stockholders.’8

So, an early win for shareholder primacy. But the Illinois Court of Appeals took the argument in an interesting direction in 1968. The case concerned the Chicago Cubs baseball club, which had decided not to install floodlights at its stadium. A shareholder in the club objected, saying that, with floodlights, the Cubs could stage night games, bringing in more revenue. The club’s objection to the lights was that it might inconvenience local residents. If they moved away because of the bright lights, the neighbourhood could deteriorate. People might be reluctant to come to the stadium and the club’s revenues could fall. The court accepted this argument. It said that looking after the neighbourhood could help the club prosper in the long term, which would be good for shareholders too.9

This is a more sophisticated argument. The court was not saying that shareholders’ interests didn’t matter. It wasn’t even saying that shareholder rights weren’t pre-eminent. It was saying that shareholders could benefit if everyone else did too. By not installing floodlights, the baseball club was maintaining its neighbours’ tolerance of its presence. Proponents of responsible business call this a company or industry’s ‘licence to operate’.

HOW TO MAINTAIN YOUR LICENCE TO OPERATE

What do we mean by profit? This, according to Colin Mayer, a professor at the University of Oxford’s Saïd Business School, is a crucial question when we discuss a company’s place in the world and its need to win society’s acceptance. Colin, one of the leading critics of shareholder primacy, told the FT Forums meeting: ‘The problem at the moment is that we’re able to call something a profit even if, in the process, we’re imposing substantial damages on society and on the environment.’

Colin Mayer’s point is that companies in the pursuit of profit, acting in the apparent interests of their shareholders, often create a mess for everyone else. That can be the wrappers spilling out of litter bins outside a fast-food restaurant or the damage caused by an oil spill, as we saw with BP in the Gulf of Mexico. Companies can make a mess of people’s lives too, whether that is with opioid addiction or cigarette-induced cancer. Those companies impose costs on society and society can legitimately ask why it, rather than the companies, should bear those costs.

These questions have become particularly acute when it comes to climate change. The 2021 report from the UN’s Intergovernmental Panel on Climate Change (IPCC), which preceded the COP26 conference in ­Glasgow, said that even with rapid emission cuts, global temperatures would continue to rise until at least 2050. António Guterres, the UN ­secretary-general, described this as ‘a code red for humanity’.10

The climate crisis has vast consequences for companies, energy and mining companies in particular. A company that argues that mining coal or pumping oil is the best way to generate returns for its shareholders runs into a large obstacle: vast sections of society are no longer prepared to put up with the resulting damage. We will discuss companies’ role in countering climate change in more detail in the next chapter.

Companies, whatever sector they are in, do not operate in a vacuum. Building factories, digging mines, putting large delivery trucks on the road all have an impact on neighbourhoods and on people’s lives. Companies need permission to do what they do. This might be planning permission, or it might be acceptance by the citizens affected. The first is a literal licence to operate. The second is an implicit licence to operate, to be accepted as a legitimate participant by the surrounding society.

Companies that violate that implicit licence to operate can pay a price, even when they think they are acting in their shareholders’ interests. One of the striking features of the past few years is how many shareholders have begun to worry about companies that violate the terms of their implicit license to operate.

In 2020, Rio Tinto, the mining company, attracted fierce criticism when it destroyed a 46,000-year-old sacred Aboriginal site in Western Australia to expand an iron ore mine. Rio had received permission to demolish the site in 2013 – its formal licence to operate. But it failed to change its plan when the site’s importance to indigenous communities became clear. The resulting furore saw the departure of Jean-Sébastien Jacques, the Rio Tinto CEO, and two other senior executives.11

What was interesting was where the pressure for the Rio Tinto executives’ exit came from: shareholders. Hesta, a pension fund shareholder in Rio Tinto, warned before Jacques’ departure that the crisis was damaging the company. ‘Mining companies that fail to negotiate fairly and in good faith with traditional owners expose the company to reputational and legal risk,’ Hesta said.12

This is one of the ways in which ESG differs from previous versions of corporate responsibility. In the past, companies felt under pressure to assuage the feelings of other stakeholders at the expense of shareholders. This time, it is often the shareholders that are insisting that companies respect the wishes of wider constituencies. Failing to do so, in the shareholders’ view, damages the future of the company and, therefore, the long-term value of their stakes in the company.

As Larry Fink, head of BlackRock, the asset management giant, said in his letter to CEOs in 2018, people now expect more from business. ‘Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.’13

Not only was society demanding this, Fink said; it was also in shareholders’ interest in the long run that companies had a sense of purpose that was wider than short-term shareholder returns. ‘Without a sense of purpose, no company, either public or private, can achieve its full potential,’ he wrote. ‘It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth.’

In other words, companies that focus purely on shareholders will end up letting those shareholders down. Not immediately. They will try to keep shareholders happy by paying them dividends. But by neglecting employee development and failing to innovate they will become less viable, damaging shareholders’ interests in the long term.

In Fink’s view, there was no longer a contradiction between what was good for shareholders and good for society. They were one and the same. If other stakeholders – employees, customers, the community – benefited, shareholders would too.

In his 2022 letter to CEOs, Fink hit back at those who criticised stakeholder capitalism as ‘woke’. He wrote: ‘Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke”. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.’14

Not everyone believes companies need to follow a caring agenda for shareholders to win. Robert Armstrong, the FT’s US financial commentator, wrote that if companies that conformed to ESG principles really were good for shareholders, that would be reflected in their share prices.

‘If ESG investing did provide higher returns – as the industry both explicitly and implicitly promises – then profit-seeking investment managers would be doing all the work for us, and we wouldn’t have to be having this damn conversation in the first place,’ he wrote in Unhedged, his newsletter to FT subscribers.15

So, is Larry Fink’s assertion – that paying attention to all ­stakeholders rewards shareholders too – correct or is Robert Armstrong correct? The evidence is not clear-cut, as shown by a review of 163 research papers on corporate social responsibility and company performance published between 2000 and 2014. Kamel Mellahi of Warwick Business School, one of the authors of the review, said that the results were inconsistent. ‘A lot of firms haven’t found the sweet spot of doing well while doing good at the same time. More than one third of CSR studies did not find a positive relationship between CSR and performance. Several studies found that CSR actually has a negative impact on performance.’16

But share price performance is only one measure of a company’s performance. Shares go down as well as up, and they can crash if the company violates its implicit licence to operate. Companies that seem to be doing well for their shareholders can stumble badly if they ignore the wider society’s needs. That’s what happened to Rio Tinto when it destroyed the sacred caves. And when those companies do fall from grace, the shareholders suffer too. They suffer in two ways: first, with the disruption to the companies’ business. With Rio Tinto, that was the disruption of getting rid of executives and their replacement with new ones. Second, when companies cause damage, governments feel the need to regulate and to tie the company’s, or the entire industry’s, hands. Think of the Dodd-Frank financial reforms signed into law after the financial crisis by President Barack Obama, who described them as ‘a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression’.17

There have been other occasions where society has moved against entire industries, forcing them to adapt in an effort to preserve their businesses and the interests of their shareholders. We will discuss in the next chapter how this affects oil and gas companies which, many fear, could be left with ‘stranded assets’ as the world moves away from hydrocarbons.

A non-energy industry that is having to reshape itself is the cigarette business. That smoking is bad for you has been clear for decades, and the tobacco business is paying one of the prices that we mentioned for companies that lose their implicit licence to operate: increased regulation. Several countries, starting with Australia and followed by France, Ireland and the UK, have forced tobacco companies to sell cigarettes in plain packaging.18

This is the problem with the assertion that leaders should act to make profits for the shareholders and not bother about the wider society: the wider society can fight back, to the shareholders’ detriment. Let’s go back to that 1970 Milton Friedman article. Friedman did not say only that companies should make as much money for their owners as possible. He said they should do it ‘while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom’. Those are my italics. I have emphasised the phrase to make the point that ethical custom can change, and has changed since Friedman wrote his article.

Keeping an eye on what society demands of companies is no longer optional. It is a means of survival. It is in the long-term interests of shareholders that leaders understand when their licence to operate is under threat. And, if they don’t pay attention to ethical custom and change accordingly, then what is ‘embodied in law’, in Friedman’s terms, may well change too, forcing them to change, whether they want to or not.

HOW TO MAKE ESG WORK

In 2010, I went to Unilever’s riverside headquarters in London to listen to a talk by Paul Polman, who had become CEO of the consumer goods giant the year before. He did something I had not seen a company chief do before, or since. He told some of his potential investors to get lost. He said that Unilever had existed for more than 100 years and still wanted to be there in several hundred years’ time. To shareholders who took that long-term, sustainable view, he said: ‘Come and invest with us. If you don’t buy into this, I respect you as a human being, but don’t put your money in our company.’19

This was the beginning of nearly a decade in which I followed what ­Polman was doing. He became the corporate world’s leading proponent of the idea that companies could do well by doing good. Whether he proved that was possible during his 10 years in charge of the company is something we will come to. But his statement in 2010 demonstrated two aspects of how to make corporate responsibility work. First, you need to tell the world what you are planning to do and why. You need to explain what difficulties your company could face if it doesn’t meet society’s challenges. You need to point to where criticism could come from, whether that is communities complaining about pollution or bad publicity over the use of child labour in sub-contractors’ factories. You need to discuss the damage these objections might pose to the business, with, for example, permission to build factories or stores refused.

Second, you need to emphasise that ESG can only ever be a long-term project. Those shareholders who are looking to make a quick killing are unlikely to benefit from it. It is best to tell them that in advance, even if you are not as blunt about it as Paul Polman was.

If your company has been around for a long time, it helps to refer to it, as Polman did, because that emphasises the importance of long-term thinking. Unilever had the advantage of a history of being socially responsible – and of making money from it. The company began by producing soap in an attempt to improve health and hygiene in Victorian England. It pioneered shorter factory hours and pension for workers and built Port Sunlight, a model workers’ village in the north-west of England.20

Third, you need to set targets. Under Polman, Unilever said it would halve the environmental impact of its products by 2020. It said it would halve the amount of water consumers had to use with its products by the same year. As it happens, Unilever did not achieve those targets by the time Polman announced he was stepping down. It had to postpone the environmental impact target to 2030. In 2017, the year before Polman said he would be going, Unilever’s water use had dropped by only 2 per cent. Does this matter? Yes. Targets should be achievable.

Fourth, you need to show that you have achieved those longer-term shareholder returns. If you don’t, the whole exercise is wasted. In Larry Fink’s words, the point of ESG is that it helps everyone, shareholders and other stakeholders. Polman did show that, as I argued in a column I wrote in 2018 after he announced his retirement. During his 10 years in charge, the company’s shareholders enjoyed a shareholder return vastly superior to the FTSE index and that of rival companies such as Nestlé.21

That column produced a notable first for me, one that typifies the Polman direct approach: although he was the subject of the column, he posted a long comment underneath, defending his record and taking issue with some of the other below-the-line commenters who had criticised him. ‘We need to have broader responsibilities. After all, companies cannot succeed in failing societies nor can companies be bystanders . . . In fact, all the outside partnerships with our stakeholders have helped our brands be better and stronger, driven by a clear purpose that ultimately also benefitted our shareholders.’ This is the fifth lesson: you need to talk often about what you are doing, as Fink and Polman did.

But there is a sixth lesson: leaders need to be realistic about ESG. There are trade-offs. It would be nice to live in a world in which everyone benefited all the time, but they don’t. Martin Wolf referred to the possible conflict between what is good for customers and what is good for workers, and this crops up frequently. For all the attempts to soften its edges, capitalism is ruthlessly competitive. As we said in Chapter 5, companies die at an alarming rate. Staying in business often means cutting costs, and employees usually bear the brunt, either through losing their jobs as the company shifts operations to lower-cost countries, or through a deterioration in their working conditions.

Even during Polman’s time in charge, Unilever experienced its first-ever strike over changes to its final-salary pension scheme. The company said then that the change was a ‘tough but necessary choice which reflects the realities of rising life expectancy and increased market volatility’.22 As we noted in Chapter 2, the vast majority of companies have ended or limited their final salary pension schemes. It was, perhaps, more of a shock coming from Unilever, given Polman’s insistence that all stakeholders mattered – and unions accused the company of ‘arrogance’ – but the strikes brought home the point that the desires of different stakeholders are not always the same.23 Leaders need to take that into account. In setting out the terms of an ESG policy, it is important to acknowledge that there may still be difficult trade-offs.

Another issue leaders need to be aware of is that publicly quoted companies do not always control their own fate. They may be aiming for long-term shareholder benefit; others have an eye on the short-term and this can destroy the best-laid ESG plans. Unilever, once again, provides an example. In 2017, Kraft Heinz, the food and beverage company, launched a hostile takeover bid for Unilever. Polman managed to stop the bid over a weekend, largely by appealing to Warren Buffett, the investor whose Berkshire Hathaway group controlled Kraft Heinz, along with 3G capital, a Brazilian private equity outfit. Buffett dislikes hostile takeovers and was persuaded to ensure the withdrawal of the takeover attempt. But the bid forced ­Polman to take steps to shore up shareholder support for Unilever. These included raising the profit margin target from 16 to 20 per cent, launching a €5 billion buyback of Unilever’s shares and raising the dividend.24 These actions were a distraction from what he called ‘looking after this wonderful planet’.25 But it shows that outsiders can throw rocks on to the path of corporate responsibility.

The Unilever story took an even more difficult turn after Polman’s departure. Its share price languished under his successor as CEO, Alan Jope, and Terry Smith, one of the company’s largest shareholders, accused ­Unilever in January 2022 of having ‘lost the plot’. He said: ‘Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business.’26

It’s a tough job keeping all the stakeholders happy.

THE LEADER’S EAGLE EYE

When Margaret Thatcher was forced out of 10 Downing Street in 1990, all FT reporters received an instruction to ask any business leaders they were interviewing who they thought should succeed her. I put the succession question to Alan Sugar, then head of Amstrad, the consumer electronics company, after a presentation he had given. Now Lord Sugar, frontman for The Apprentice television programme, he has become famous for his cantankerous manner and scathing impatience with the contestants. Back then, when I reported on Amstrad and he was just Mr Sugar, I found him gruff but honest in his assessment of his achievements. So, when I asked him who he thought the new prime minister should be, he replied, with characteristic candour, that he hadn’t heard of the candidates, apart from John Major (the eventual winner), and that was only because he had appeared on a cover of The Economist with an Amstrad computer on his desk.

Today, as a member of the House of Lords, Lord Sugar knows his politics and frequently comments on current affairs. CEOs now have to be far more politically astute and informed than in the past. A previous generation of business leaders operated in a world much more stable than today’s – and political acumen wasn’t as necessary as it is now, unless it involved lobbying the government for lower taxes or higher subsidies.

After the Second World War, the world arranged itself into blocs: the USA-aligned, the Soviet Union and its allies, and what was then called the Third World. Although the USA and Soviets fought or encouraged wars in the Third World, from Vietnam to Angola, much of the world was tense but stable. Business leaders could get on with their work largely untroubled by geopolitical matters.

There were exceptions. Anti-apartheid activists pushed companies to boycott South Africa in the 1970s and 1980s. But apartheid had been in force since 1948 and, while pressure on business to withdraw intensified until the end of white rule in 1994, South Africa was a repressive country that most CEOs involved there understood. They either justified their presence there or, like Barclays and many American companies, eventually decided to leave.27

Today, CEOs have many different political scenarios to consider and some of the most important are constantly changing, with pressure from different stakeholders to take one position or another. China’s clampdown on Hong Kong and its demands that companies support its national security law in the territory have created dilemmas for businesses operating there. HSBC, which traces its roots in Hong Kong to its start in 1865, has found itself pressured from two sides. It backed China’s national security law, but angered the USA and UK by doing so. The FT reported in 2021 that ‘thousands of foreign companies based in the territory are navigating an increasingly tricky corporate environment in the midst of a tightening crackdown on the former British colony and heightened Sino-US tensions.’28

The war in Ukraine, which began in February 2022, placed new demands on CEOs, as international sanctions on Moscow and public pressure forced them to end their business ties in Russia and decide what to do with their locally based staff.

It is not only geopolitical trends that today’s CEOs need to understand; there are vast social changes too. When the Black Lives Matter movement dominated the headlines after the killing of George Floyd by a Minneapolis police officer in 2020, many business leaders spoke out. One CEO, David Solomon of Goldman Sachs, sent a voice message to staff: ‘I want to remind each of you that as a community – there is no place at Goldman Sachs for racism or discrimination against any group in any form. I know that acts of inhumanity – against any person or group – have a profound impact on our people; how that manifests in each person is unique and personal to them. I also know that this is not a time to be silent.’29

This is part of a recognition by many business leaders that they cannot separate themselves from what happens outside company premises – because it comes inside and affects employees. At an FT Forums meeting, Anna Turrell, head of environment at Tesco, said the Black Lives Matter movement was one of those ‘moments that enable us to hold the mirror up to society and to business within that’. She added that this had to be more than just symbolic. ‘I think the Black Lives Matter movement and the events that we’ve seen have served to create a moment of reflection, but also, importantly, of action. We’ve seen quite a lot of engagement on the part of the business community in response to this, but the real test will be, does it stick? And, if so, how does the learning from this actually get embedded into core business practice? That will be absolutely crucial.’

Sarah Gordon, CEO of the Impact Investing Institute, a non-profit organisation that supports investment that improves the well-being of society, told the FT Forums meeting that there was a long way to go in turning good intentions into action. Sarah, a former FT business editor, said: ‘When I was writing about diversity as a journalist at the FT, there was a rather bitter joke about how there were more men named John running FTSE 100 companies than there were women. There are certainly more white men and women running FTSE 100 companies than there are black CEOs.’

Leaders are under pressure on diversity issues in ways they never were in the past. They need to know more about inequality and the lack of fairness in society more generally, and this became particularly acute during the coronavirus pandemic. The lockdowns that followed the spread of Covid-19 and the need to keep goods flowing showed how important supermarket workers, refuse removal workers and delivery drivers were – and also how poorly paid and unregarded they were.

The political and social upheavals that affect societies today are unpredictable. Leaders need to keep their eyes and ears open for them, and for what activists are protesting about. Issues seem marginal, until they affect your business. Failing to wake up to them can hurt everyone in the company, from employees to shareholders.

FURTHER READING

I wrote an in-depth profile of Paul Polman and Unilever with FT colleague Scheherazade Daneshkhu, looking at this intriguing and complex business leader. ‘Can Uniliver’s Paul Polman change the way we do business?’ is available at: www.ft.com/content/e6696b4a-8505-11e6-8897-2359a58ac7a5.

We have talked here about the importance of hearing other points of view. FT commentator Robert Armstrong’s trenchant criticisms of the whole idea of ESG, referred to above, are well worth reading, if only to test some of the views in this chapter. ‘The ESG investing industry is dangerous: A BlackRock dissident speaks truth’, available at: www.ft.com/content/ec02fd5d-e8bd-45bd-b015-a5799ae820cf.