First published in IODSA Directorship Magazine August 2021

The year 2020, with its Covid pandemic, could go down as the greatest shock to the planet since warnings about the Noachian Flood, estimated to have occurred around 2900 BCE, caused Noah to gather a pair of each animal species from the earth to shelter in his ark until the flood waters receded.

Covid-19 has fundamentally changed all our lives. Unemployment and poverty on a global level has reached epic proportions, economies have suffered, and government stimulation packages are the order of the day.

It would not be unusual, therefore, for business and industry to focus heavily on regaining profits lost during the pandemic, with little time for so called “softer” issues such as sustainable development.

It is however welcoming to see a new commitment to ESG (environmental, social and corporate governance) issue emerging in 2021. The Davos Agenda notes that the Covid-19 pandemic “has demonstrated that no institution or individual alone can address the economic, environmental, social and technological challenges of our complex, interdependent world.”

Sustainable development is not only the “right thing to do”; it is frankly “the only thing to do.”

In South Africa, listed companies are required to report on their ESG impacts and embrace integrated reporting. This is in part through the influence of the King Report on Corporate Governance that advocates an approach that takes into account the “legitimate and reasonable needs, interests and expectations of all material stakeholders in the execution of its duties, in the best interests of the company, over time.”

The burning question, however, is why don’t all businesses and industries in the country advocate the same approach, simply because it is in their best and long-term interests to do so?

Up to now, capitalism has been either that of the state (in emerging markets) or of the shareholders (in developing markets). The Davos Agenda proposes that a better form is that of stakeholder capitalism: “Both systems [state and shareholder] have led to tremendous economic progress over the past few decades. But each has equally brought about major social, economic, and environmental downsides… Given the shortcomings of both of these systems, we believe we need a new, better global system: stakeholder capitalism. In this system, the interests of all stakeholders in the economy and society are taken on board, companies optimize for more than just short-term profits, and governments are the guardians of equality of opportunity, a level-playing field in competition, and a fair contribution of and distribution to all stakeholders with regards to the sustainability and inclusivity of the system.”

This new approach will require strategic and careful planning. It must be fully embraced by the board and C-suite management, so that its impact cascades to all stakeholders. In turn, the board and C-suite must engage with stakeholders, and make the changes required for a sustainable future.

Not to embark on this journey could see a 21st century Noah begin building the next ark to, hopefully, carry the animals and plants to safety, while humans learn the folly of their greed the hard way!

Dot Field is the founder of Dot Field Consulting. She is is a fellow of the IODSA, trustee of the Old Mutual Foundation, member of the ABC (advocacy, behaviour and communications) board committee of the GBVF Response Fund1 and member of the International Women’s Forum of South Africa.

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