Rarely in modern times have business leaders been subjected to such pressure for transparency and social engagement as now. This is partly because the Covid-19 pandemic and its economic aftermath has been followed by a growing economic divide between shareholders and stakeholders. This includes company employees, as evidenced by a recent report by The Brookings Institute on 22 iconic corporations. This concludes: “Despite commitments by the majority of these companies to voluntarily embrace stakeholder capitalism, the pandemic test reveals that the system changed little.” Indeed, since those commitments, company shareholders grew $1.5 trillion richer, while workers enjoyed under 2% of that benefit.
And yet, we believe many executives are paying more attention to long-term objectives such as purposefulness and the ability to engage as social actors. Many large companies have created competent foundations which finance social projects, facilitate access to medical and drug treatment, as well as quality education. Highly qualified and talented people working inside them are able to organize long-term aid or sustainable programs. Meanwhile, these firms set up partnerships with public bodies in order to benefit from infrastructure services. And, in order to complement the process, the foundations collaborate with NGOs. Two years ago, for example, Ashoka kick-started a partnership with Zalando which built an ambitious ecosystem to address Covid-19 related challenges on a global level.
The Six Catalyzers For A Hybrid Approach
To help such partnerships, six practical developments are helping catalyze this hybrid public-private-citizen approach which leaders should integrate in their future strategies. First, international banks have become aware of the need to finance long-term sustainability projects to offer cities and states solutions to answer challenges such as water provision and social infrastructure (such as schools, hospitals, etc). So, they are beginning to reshuffle projects to pick the right materials and coherent urban designs aimed at reducing our carbon imprint and protecting the rare resources that we’ve preserved.