Big Business and Bad Ideas: Penny Fowler, Tamasin Cave, Adam Swerksy and Michael Skapinker at the Cambridge Union
Big businesses wield immense economic and political power — this year’s Fortune Global 500 list of the world’s largest businesses generated $27.7 trillion in revenues and $1.5 trillion in profits. Understanding the morality of big businesses is extremely pertinent as we endeavour to redefine the role of corporations today. The Union debate saw an exciting line-up of speakers with diverse backgrounds and perspectives on this issue: Penny Fowler, who leads Oxfam’s Private Sector Strategy that aims to positively shape business policies and practices to promote human rights and tackle inequality; Tamasin Cave, a director of Spinwatch, an organisation that scrutinises corporate lobbying and its distortion of public debate, and author of “A Quiet World: Lobbying, Crony Capitalism and Broken Politics”; Adam Swersky, Labour Councillor for Harrow and Director at Social Finance, a non-profit organisation that seeks improved solutions to tackle social problems in the UK; Bobby Vedral, a macro-political analyst who runs his advisory venture, Macro Eagle, and UK representative on the German Economic Council; and Michael Skapinker, the present Associate Editor of the Financial Times.
Multiple arguments and points of contention were explored during the debate, which eventually converged on several key strands of thought. Considering both the beneficial and deleterious impacts of big businesses, where does one draw the line in deciding if a business is moral or amoral? Who is truly responsible for corporate malpractice? Should we blame poor corporate leadership, the overarching capitalist ideology that fuels a parochial drive for growth, or the inadequate enforcement of state regulations? More likely than not, it is the confluence of multiple mutually reinforcing factors.
The significance of this debate, in my opinion, rests on the potential of big businesses to be a massive force for good. Given the immense scale and reach of corporations, there is rising societal expectations that businesses play a more active role in tackling a broad range of contemporary issues. In fact, governments increasingly turn to private investment to cover shortfalls in funding on issues like climate change and development. After nearly two hours of stimulating debate, I speak to Penny, Michael, Adam and Tamasin to understand their views on how things might progress in the coming years.
Referring to her personal, on-the-ground experiences, Penny laments that “lots of the work I’ve done in developing countries revolve around the lack of regulation.” In addition to inadequate implementation and enforcement of state regulation, “there is also a gap between company policies and the realities on the ground.” Businesses do adopt new policies based on corporate social responsibility, but they often do not translate into actual change. Adam continues, arguing for greater incentive for businesses to pursue such policies. “There is a need for stronger regulation to level the playing field for businesses.” There are businesses that “genuinely want to behave in a more responsible and sustainable way, but they risk being undercut by competitors who do not alter their practices. Whatever we end up doing, we have to make sure we have an economy where entrepreneurs and social enterprises are allowed to flourish, and that no business is too big to be taken down.”
With a greater media presence facilitating rising public awareness of social issues, I question the role of consumer pressure in enacting top-down change in corporations, be it a transition to environmentally sustainable models or businesses taking greater responsibility for workers’ rights. Penny affirms the power of the people as she believes “most businesses are very customer-oriented and do get a sense of customers’ concerns and act on it.” Pointing out the impact of BBC’s Blue Planet in generating a movement against plastic use, with ripple effects on businesses, she recognises that “most customers don’t want to have to think too much to decide what products to get or feel guilty about buying things. They want to be able to trust whoever they are buying goods and services from.” This thus incentivises corporations to cater to the demands and preferences of their customers.
Consumer pressure may only be effectual to a certain extent, however. Michael interjects here, raising the “30:3 phenomenon”, in which consumers claim to be more virtuous than they are. “30% of consumers say that it really matters to them that the goods they buy is sustainable and responsibly sourced, but only 3% of them act on this basis. People have limited budgets and family pressures that constrain what consumers can do.” The shift in consumers’ use of plastics has been “one of the very few examples” of change created by a television programme, which is “encouraging”. Adam notes that this has been supported by a tax on plastic bags, which Michael praises. “It plays into nudge economics, where consumers’ behaviours can be influenced by small suggestions.”
I wondered if these small but significant changes might accrue, such that we can foresee a possible reform in our capitalist society and economy, prompting corporations to modify irresponsible business practices. Adam points out that we are just riding on a wave today, which may not make a sufficiently significant splash. “We are more conscious about what businesses are doing, whether regulations are in place and so on. The question is whether this is enough, given that many people believe the scale of change needed is a shift back to where we were 30 or 40 years ago. It’s a fundamental change and we don’t know if that can happen.” Penny echoed Adam’s pessimistic view, suggesting that “rather than relying on consumers to drive changes, change can also be driven by disasters or when things go very badly wrong. Certainly in some areas like workers’ rights, the collapse of Rana Plaza in Bangladesh really spurred new actions by companies involved.”
Ending on a more optimistic note, Tamasin calls on the rest of society to keep pushing for change. “It is not just one sector’s responsibility – it involves businesses, governments, civil society, and the media. The media is a very powerful platform, and it is up to us to shape the media to constantly examine what companies are doing.” She identifies the increasingly vibrant and vocal grassroots activism, “which corporations hate”, citing fracking companies coming under pressure by “very sustained, local and organised grassroots campaigns”, and believes that “we will get to a point where the public will gather against certain interests.” Acknowledging the different sources of pressures that businesses are confronted with, including stakeholders, governments, consumers, and community organisations, Adam nicely concludes the debate for the night: “It is difficult to be a business.”