Not Just for Profit: Businesses have responsibilities beyond the bottom line
At Hagerty, we have a corporate social responsibility (CSR) program, as most corporations do. I’ve never cared for the term. It sounds cold and stiff, almost as if giving back is a moral obligation or something done out of guilt.
For this reason, I don’t even like the phrase “giving back.” Rather, I like to think about it as simply the practice of giving. I think the best businesses do this as a normal matter of course. And they reap the rewards for it.
My views about businesses that give stem from a few core ideas. First, making money and creating economic growth has been the source of most of the progress that global society has made in the past 50 years. Second, there is more to business than just making money for shareholders. Third, if you are going to work in a for-profit business, why not do it right?
The first major league entrepreneur I heard speak this way was Richard Branson in Barcelona a few years back. In front of a group of nearly 2,000 CEOs he challenged all of us to take a portion of our profits and invest them in transformative businesses. As he said, investing in clean energy technologies won’t just be good for the planet, it will be a great investment in a growing industry. Since then, Branson has been a pioneer for combining business and giving strategies across the globe.
Just think about some of the organizations that have built giving into their business model: Patagonia, Ben and Jerry’s, Chobani, Athleta, etc. What they have in common has now been codified in a concept called a Benefit Corporation (B Corp). While the formal designation of a B Corp is not for all businesses at all times, it is a great roadmap for businesses thinking more about making money and making the world better at the same time.
Or think about the stunning letter that Larry Fink, the CEO of Blackrock, wrote to all CEOs last year. In it, he succinctly framed many of the problems we see in the world, then challenged business leaders and corporate boards to think and act to remedy them with more than profits in mind. He urged all of us to grow our businesses with purpose and responsibility for a greater good.
Another example is the statement produced by the Business Round Table this August and signed by 181 of their members. It redefines the purpose of a corporation to include a balanced stakeholder approach and the importance of giving as a practice.
Because of efforts like these, the concept of doing well by doing good is catching on all over the world.
A fine example is Rwanda President Paul Kagame. He is not a business leader, but he is most certainly a business enabler. When I spoke to him last year in Cape Town, South Africa, he said one of his biggest goals was to see the entire African continent united in creating prosperity through entrepreneurship, business and intra-Africa trade.
Lo and behold, just last month, President Kagame – a serious, studious man whose leadership ended the brutal 1994 genocide that ravaged the country – announced that Rwanda’s Mara Group was releasing two smartphones built entirely in Africa, calling the factory producing the phones “another milestone on our journey to a high tech made in Rwanda industry.”
Mara Group CEO Ashish Thakkar told CNN that the plant will initially hire 200 people, 60% of whom are women. It will also put high-quality cell phones within the reach of people throughout the continent who previously couldn’t afford one.
“We realized a few years ago that to create positive social impact on our continent … we need to have high quality and affordable smartphones,” said Thakkar. “This will enable financial inclusion.”
Talk about business impact!
As we approach the holidays, I hope you will consider how your company can positively impact the Grand Traverse region – and indeed the whole world. It doesn’t matter if your company is large or small. What matters is that you make giving a practice. It all adds up. We are all in this together.
Here’s to a bountiful 2020. Onward and upward.
McKeel Hagerty is CEO of The Hagerty Group.