Companies that share their profits with workers and have a social mission should get a new “Queen’s Award for Enlightened Business Behaviour,” a minister has suggested.
Guy Opperman, the pensions minister, said that firms that pay staff well and take account of the “social impact” of their activities should be recognised and praised, to encourage the spread of what he called “responsible capitalism”.
Opperman was speaking at the launch of a Social Market Foundation paper on “social business” written by Phillip Ullmann of the Cordant Group, one of Britain’s biggest social enterprises.
The paper, From Mission to Impact argues that companies should have a legal duty to pursue a “social mission” to benefit workers and other stakeholders as well as owners.
Mr Opperman, who was speaking in a personal capacity, said companies that demonstrate social impact should be celebrated and rewarded by consumers.
He said: “Just as there is a Queen’s Award for Enterprise for exporters, there is a case for looking at whether there should be a Queen’s Award for Enlightened Business Behaviour.That would be a legitimate validation of social business.”
The Queen’s Award for Enterprise is a Government award given to British firms judged to excel at exporting or innovation. Winners are invited to a Royal reception and are entitled to fly the Queen’s Award flag at their offices.
Mr Opperman, one of the first Conservatives to campaign for a “living wage”, helped to set up a community-owned bank in his Northumberland constituency.
He said he believed there is a “social change” underway that puts pressure on companies to change the way they work.
He said: “There are businesses aplenty that are setting an example – Timpson’s, the Co-Operative, Lush and Phillip Ullmann’s business, Cordant. There are role models of the sort of business people want to see in future.”
Cordant, which has a turnover of £850 million a year, has declared itself a “social enterprise”, capping executive pay and dividend payments and promising to share profits with staff.
Phillip Ullmann, Chief Energiser, Cordant Group said: “I believe that social business can change society, improving the lives of workers everywhere providing we can instil a cultural shift in thinking from profits to people and from pure wealth accumulation to wellbeing. The key lies in making real social impact promises, providing employee autonomy and in holding companies to account so that any license to operate rests on delivering genuine, lasting change.”
Ullmann’s paper comes as growing numbers of business leaders acknowledge the need for major change to win back public trust. Larry Fink of BlackRock, one of the world’s biggest investors, this year wrote to CEOs telling them: “Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.”
According to the 2018 Edelman Trust Barometer, trust in business has fallen to 43% and 60% of people expect business leaders to take action to make their companies more responsible, instead of being forced to change by politicians or regulators.
James Kirkup, Director of the Social Market Foundation, said: “Restoring faith in an open market economy requires companies to do things very differently. Politicians and business leaders are increasingly realising that the issues raised by people like Phillip Ullmann in his SMF paper should be at the centre of debate about our economic and social future.”
Notes to Editors
The full paper by Phillip Ullmann can be accessed here: ttp://https://www.smf.co.uk/wp-content/uploads/2018/05/From-Mission-to-Impact.pdf
The paper was launched at an event in central Westminster on the evening of Wednesday 9 May 2018. Watch a short video here capturing the views of attendees and panellists on the topic: https://vimeo.com/268949814
Interviews/media enquiries: Please contact Laura Webb, SMF Head of External Affairs and Partnerships on 020 7222 7060, or 07502048969 / or email firstname.lastname@example.org
About Cordant Group:
Cordant Group is the UK’s second largest recruitment and services firm with revenues of £850 million employing 125,000 people. Cordant offers integrated services including recruitment, security, cleaning and technical electrical services. Founded in 1959, Cordant remains a leader in recruitment and integrated facility services and in September 2017 became the largest social enterprise in the UK.
About the SMF:
The Social Market Foundation (SMF) is a non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. We conduct research and run events looking at a wide range of economic and social policy areas, focusing on economic prosperity, public services and consumer markets. The SMF is resolutely independent, and the range of backgrounds and opinions among our staff, trustees and advisory board reflects this. The SMF is publishing Phillip Ullmann’s paper to stimulate political and public debate about the role of business in a fair economy. Views expressed in the paper are those of the author.