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Is the COVID-19 crisis the paradigm shift needed to redefine business for the 21stcentury and build trust between business and society? The crisis has hastened the trend towards ‘purpose before profit’ and the fact that purposeful companies will be the ones that thrive in the future.[vc_quotes layout=”accordion” 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202005.%5CnColin%20has%20served%20on%20the%20editorial%20boards%20of%20several%20leading%20academic%20journals%20and%20assisted%20in%20establishing%20prestigious%20networks%20of%20economics%2C%20law%20and%20finance%20academics%20in%20Europe%20at%20the%20Centre%20for%20Economic%20Policy%20Research%20and%20the%20European%20Corporate%20Governance%20Institute.%20He%20was%20a%20founding%20editor%20of%20the%20Oxford%20Review%20of%20Economic%20Policy%20and%20a%20founding%20co-editor%20of%20the%20Review%20of%20Finance.%5CnMayer%20was%20a%20director%20and%20chair%20of%20Oxera%20between%201986%20and%202010%2C%20and%20was%20instrumental%20in%20building%20the%20firm%20into%20what%20is%20now%20one%20of%20the%20largest%20independent%20economics%20consultancies%20in%20Europe.%20%20He%20is%20a%20director%20of%20Aurora%20Energy%20Research%20Limited%2C%20an%20energy%20modelling%20company.%20He%20has%20consulted%20for%20numerous%20large%20corporations%20and%20for%20governments%2C%20regulators%20and%20international%20agencies%20around%20the%20world.%5CnMayer%20is%20an%20Honorary%20Fellow%20of%20Oriel%20College%2C%20Oxford%2C%20and%20St%20Anne%E2%80%99s%20College%2C%20Oxford%2C%20and%20he%20is%20a%20Professorial%20Fellow%20of%20Wadham%20College%2C%20Oxford.%20%20He%20is%20a%20Fellow%20of%20the%20British%20Academy%20and%20a%20Fellow%20of%20the%20European%20Corporate%20Governance%20Institute.%20%20He%20is%20an%20Ordinary%20Member%20of%20the%20Competition%20Appeal%20Tribunal%20and%20a%20trustee%20of%20the%20Oxford%20Playhouse.%5Cn%22%2C%22image%22%3A%2231929%22%2C%22linkedin%22%3A%22%22%7D%2C%7B%22name%22%3A%22Fiona%20Reynolds%22%2C%22job_role%22%3A%22Chief%20executive%2C%20PRI%22%2C%22content%22%3A%22Fiona%20Reynolds%20is%20responsible%20for%20global%20operations.%20She%20has%20more%20than%2020%20years%E2%80%99%20experience%20in%20the%20pension%20sector%2C%20working%20in%20particular%20with%20the%20Australian%20Government%2C%20and%20has%20played%20a%20key%20role%20in%20advocating%20pension%20policy%20change%20on%20behalf%20of%20working%20Australians.%20She%20has%20a%20particular%20interest%20in%20retirement%20outcomes%20for%20women.%20Prior%20to%20joining%20PRI%2C%20she%20spent%20seven%20years%20as%20chief%20executive%20at%20the%20Australian%20Institute%20of%20Superannuation%20Trustees%2C%20an%20association%20for%20Australian%20asset%20owners.%20Reynolds%20has%20been%20a%20director%20of%20AUSfund%2C%20Industry%20Funds%20Credit%20Control%2C%20the%20United%20Nations%20High%20Commissioner%20for%20Refugees%2C%20and%20Women%20in%20Super.%20In%20September%202012%2C%20she%20was%20named%20one%20of%20Australia%E2%80%99s%20top%20100%20women%20of%20influence%20by%20the%20Australian%20Financial%20Review%2C%20for%20her%20work%20in%20public%20policy.%20Reynolds%20also%20serves%20on%20the%20International%20Integrated%20Reporting%20Council%2C%20the%20council%20for%20Tomorrow%E2%80%99s%20Company%2C%20the%20Global%20Advisory%20Council%20on%20Stranded%20Assets%20at%20Oxford%20University%2C%20and%20the%20Business%20for%20Peace%20steering%20committee.%22%2C%22image%22%3A%2231930%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Ffiona-reynolds-6b987168%2F%22%7D%5D” title=”Speakers” el_class=””][vc_quotes layout=”accordion” 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title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Key takeaways
Sharan
Signing the statement of purposeful companies is not enough. We need to make it work.
6 billion workers are facing destitution in the informal working environment.
Corporate social responsibility is nonsense. It’s not enough.
Let’s make the transition to a world where everybody’s rights matter.
Colin
Purpose can play a vital role in steering companies through the crisis and safely out to the other side. Purpose is about solving the problems that individuals, society and the natural world face.
Purpose gives psychological benefit to employees at a difficult time. Purpose makes companies more resilient and helps reduce risk.
Technology increasingly helps use find new measures for what ‘purposeful’ means.
A purpose statement is profoundly different from a mission statement. A purpose statement in a North Star.
Integrated reporting is a very important step forward.
Fiona
A lot of investors still think about ESG investment only in risk/return terms. The value of impact needs to be incorporated.
We need between 10 and 20 trillion dollars to fund the recovery, so we cannot rely only on government for a better future.
Stewardship is one of the most powerful tools investors have but we are underinvesting in it (.7 per cent per USD$100bn AUM).
We must be able to measure both the financial and sustainability impacts of investments.
The Florida State Board of Administration has made some strategic moves to take advantage of opportunities in the dislocation, including in private equity, distressed debt and active listed equities.. But CIO, Ash Williams, is concerned about the underlying real economy.
Political regimes around the world are stuck in a series of dead-ends and despair. Most importantly, the China-US relationship has hit a brick wall as their fundamentally different values and interests clash. Deterrents and robust policy is the only way forward, says Stephen Kotkin, professor in history and international affairs, Princeton University.
Nobel prize winner Esther Duflo suggests institutional investors can help alleviate poverty by fostering new supply chains and looking beyond a country's credit rating. She said there is an "unacceptable" level of poverty amongst Africa Americans and Latinos who are keeping the US economy going but dying for it.
Global asset manager Robeco has found proactive stewardship triggers important changes in corporate behaviour. Chief executive Gilbert van Hassel urges FIS 2020 Digital delegates to do the same.
In a fireside chat, CIO of CalPERS Ben Meng talks about how the fund wants to use leverage to push deeper into private assets, while Ronald Wuijster, chief executive officer, APG Asset Management said the policy response has made taking advantage of buying opportunities difficult.
Investors should use stewardship to encourage purposeful companies that provide long-term value by meeting the needs of multiple stakeholders and helping improve society. But what is a purposeful company?
Understanding the two policy making camps in China - one which is concerned about debt and one which is worried about a slowdown in growth - is key to understanding China's position in the global economy, says professor of finance at Peking University, Michael Pettis.
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