Aspen and the Purpose of Business

The role of business in society is changing, they say at the Aspen Institute

• There is a shift in business — from focusing on the bottom line to having a positive impact on society.
• There still is a long way to go to achieve the scale required to allow all people to use business as a force for good.

According to the winners of a $100,000 prize

“We are beginning to see an evolution in capitalism, from a 20th century view that the purpose of business is to maximize value for shareholders to a shared view that the purpose of business is to maximize value for society.”

To be more precise, the beginning was just over 20 years ago when the purpose of business was questioned by a social activist, invited to serve on the steering group of the Clinton re-election commitee.

His question would lead to a business model which operates for social benefit rather than shareholder return, arguing that:

‘If a corporation wants to donate to its local community, it can do so, be it one percent, five percent, fifty or even seventy percent. There is no one to protest or dictate otherwise, except a board of directors and stockholders. This is not a small consideration, since most boards and stockholders would object. But, if an a priori arrangement has been made with said stockholders and directors such that this direction of profits is entirely the point, then no objection can emerge. Indeed, the corporate charter can require that these monies be directed into community development funds, such as a permanent, irrevocable trust fund. The trust fund, in turn, would be under the oversight of a board of directors made up of corporate employees and community leaders.’

Incorporating in London in 2004, founder Terry Hallman was interviewed about his work in Russia and the business model:

‘At first, the idea seemed heresy — but not for long, simply because it made sense and it didn’t step on the toes of any existing enterprises that were in business to enrich relatively few people. None of them were asked to change anything, but it left open the possibility of more forward-thinking people to step in and do business differently. Even now, I am astonished that the idea struck such a deep and sympathetic chord in so many people so quickly — especially in our top business schools, where one might have thought that they were all in it for the money, for personal wealth, with little regard to social benefit or the poorest of the poor.’

Terry above all was an activist, and would soon be back in Ukraine raising awareness of neglect in state childcare. His ‘Death Camps for Children’ series of articles sending ripples through the NGO world.

In full public view he’d sketched out a development proposal which would become A ‘Marshall Plan’ for Ukraine. This was described in my contribution to the Long Term Capitalism Challenge — Re-imagining capitalism, the new bottom line. It had a key message:

‘This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority — as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way. ‘

After submission to government channels and publication online, USAID and the Senate Committee on Foreign Relations were called on for support in 2008:

‘There is increasing congruence and synchronicity in play now, to the point of attunement. What Ms. Fore is describing has been central to P-CED’s main message, advocacy and activity for a decade. That, and helping establish an alternative form of capitalism, where profits and/or aid money are put to use in investment vehicles with the singular purpose of helping the world’s poorest and most vulnerable people. The paper on which that is based is in Clinton’s library, dated September 16, 1996, author yours’ truly. That is reflected in P-CED’s home page and history section. In fact, you might notice a number of ideas and writings there that have now made their way into the mainstream of economics and aid thinking, how to make business and aid work smarter and more effectively in relieving poverty and the misery and risks that result. Bill Gates — as hard-edged a capitalist as has ever existed — reiterated the same things in Wall Street Journal a couple of weeks ago (ref below.) It sounds as though Ms. Fore’s remarks very much reflect this sort of thinking. Now it’s time to move forward and get it done.’

The people at B Labs should know about this as they were invited to collaborate in 2009. I suspect they didn’t understand what I was talking about.

“Unfortunately we are not at a point yet where we are able to certify companies outside the US. But many foreign companies are still using the B Ratings System to benchmark their own performance and help start similar conversations in their countries. “

Interestingly later that year, the Aspen Institute would launch the Fourth Sector network with a description aligning closely with our people-centered business model.

Whereas our work is self funded, the Aspen Institute is largely funded by foundations such as the Carnegie Corporation, the Rockefeller Brothers Fund, the Gates Foundation, the Lumina Foundation, and the Ford Foundation, by seminar fees, and by individual donations. Its board of trustees includes leaders from politics, government, business and academia who also contribute to its support.

One thing you get to learn about academics is that their starting position is one of denial. What they argue for doesn’t already exist. It even happened when the ‘Death Camps’ story reached mainstream media 5 years later. Nobody has spoken out, we learned.

It beggars belief that today, academics are patting themselves on the back and handing out prizes for what they have not done, while those they borrow from so heavily, get to die in the trenches, as did our founder and the children he tried to help.

‘The author of breakthru report “Death camps for children” Terry Hallman suddenly died of grave disease on Aug 18 2011. On his death bed he was speaking only of his mission — rescuing of these unlucky kids. His dream was to get them new homes filled with care and love. His quest would be continued as he wished.’

Have they heard the tale of ‘a man of words and not of deeds’?