Business leaders at the World Economic Forum Annual Meeting agree that there is an urgent need to restore the compact between business and society, ensuring that companies are responsive and responsible to all their stakeholders.
There is a crisis of confidence in leadership, says Jim Hagemann Snabe, member of the board of trustees at the World Economic Forum. “We have an opportunity to reinvent how we do business, to refocus our efforts towards ensuring long-term sustainability.”
To restore trust, we need a consistent North Star, stresses Frans van Houten, president and CEO of Royal Philips, Netherlands, and a co-chair of the World Economic Forum Annual Meeting 2017. “Global companies need to rally around a multistakeholder approach to doing business,” he adds.
At Royal Philips, an internal values system is focused on shared responsibilities to investors, employees, suppliers and broader society. The company actively pursues a life-cycle concept for its products and has committed to achieve carbon neutrality in its global operations by 2020.
The Fourth Industrial Revolution is putting lower- and medium-skilled jobs at risk. More than 60% of jobs and 30% of activities can be automated today, says Dominic Barton, global managing partner of McKinsey & Company. “We can’t rely on government to reskill people in the face of rapid technological change and automation; business will have to drive this,” he adds.
In this regard, McKinsey & Co has announced the Generation Initiative, a philanthropic commitment of $75 million across five countries to develop an approach to getting unemployed and unskilled youth into jobs.
Lubna Olayan, CEO and deputy chairperson of Olayan Financing Company, Saudi Arabia, stresses the dangers of short-termism. “Social responsibility and philanthropy must be at the core; it’s the only way to be sustainable,” she says.
Olayan was one of the first private-sector companies to employ women in Saudi Arabia 15 years ago. This decision, although difficult in the short-term, has delivered enormous long-term benefits.
Collaboration is key, says Hiroaki Nakanishi, executive chairman of Hitachi, Japan. Challenges such as climate change, inequality and social cohesion are global in nature and need a joint effort between business and government. “Sustainability is the overarching goal for us; we want to be a solution-based business,” he adds.