From BHS to Sports Direct, what’s happening to the world of big business and what does it mean?
This is the title of a talk which I gave to the Arundelles on Saturday 8 October 2016. The Arundelles are a women’s group, who meet regularly in Arundel to hear speakers talk about their specialisms and interests. I chose this title for my talk to explore the current relationship between big business and its stakeholders – investors, directors, staff, customers, suppliers and wider society.
I began by looking at three businesses which have been the lead stories in the media in recent times and the subject of critical reports by MP’s; BHS, Sports Direct and Tesco’s. I concluded that the covenant of trust between these three businesses and their stakeholders, other than investors and directors, has been broken in recent years.
I then looked at the idea of the sharing economy. The local sharing economy (such as village fetes, street parties and allotment clubs) is strong in most communities and likely to remain so. The impact of the global sharing economy (Trip Adviser, Uber, AirBnB, car sharing and so on) on big business and communities is unfolding currently. The likely impact is not clear, but is likely to be significant. These new businesses have an opportunity to frame their relationship with all their stakeholders and not just with their investors and directors.
The new sharing economy businesses, alongside more traditional big businesses, need to ensure that they connect with all their stakeholders and wider society to gain their legitimacy and ‘licence to operate’. Staff who are fairly rewarded for their work are better placed to reach their potential in their lives, whether as workers, citizens or customers. Big businesses rely on government to provide schools, hospitals and roads and must play their part in building civil society, alongside delivering financial value for investors and directors.
The recent poor share price performance of Sports Direct and Tesco’s and the collapse of BHS show that good business ethics are good business and good for society too. You can see the slides of my talk below.
Paul Gibson
8 October 2016