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The following article first appeared in the WIBF Magazine September-December 2014, Edition 3

Some years ago when I was an equities fund manager, profit maximisation and shareholder value were at the forefront of our analysis. Other stakeholders, Corporate Social Responsibility or Diversity just didn’t enter our evaluations. Indeed they were considered an inappropriate use of shareholder funds.1 These attitudes are changing. There is an increasing recognition and acceptance that companies and the City of London have a “licence to operate”.

On 24th April Mark Goyder, the Founder Director of Tomorrow’s Company 2 delivered a talk on his new book addressing such issues. The talk was hosted by Initiatives of Change UK as part of the Trust and Integrity in the Global Economy (TIGE) programme.3 Goyder argued that in order to maintain the licence to operate and to ensure long term profitability, much broader consideration must be given to multiple stakeholders, diversity of thinking, diversity of talent, board governance, trusteeship and stewardship.

He first wrote Living Tomorrow’s Company in 1998. In his updated 2013 edition he was compelled to add the subtitle Rediscovering The Human Purposes of Business. As Goyder explained “the human purpose of business is the idea that we think of business not as a machine but as organic. Every human being associated to that business is, to some extent, part of its nervous system which is very important to its success.” By placing humans and our concerns at the heart of business practices enduring success is generated through values, purpose and relationships.

As someone who challenged the economic orthodoxy in my Masters thesis, adopted a contrarian approach to stock picking and now partners with my clients to consider alternative perspectives, I was particularly engaged by Goyder’s exposition of widely held maxims which led to the financial crisis and the public’s loss of trust in corporations.4 He suggested that if we work in financial markets or went to business school we are likely to hold the exclusive beliefs that people are motivated by money, business is about making money, market forces prevail, shareholder is king, directors increase company value by delivering consistent financial returns to shareholders, directors are agents of shareholders, the only social responsibility of a business is to make a profit and if a society doesn’t like what a business does it can create laws to prohibit it.

However, Goyder outlined a more inclusive set of beliefs garnered from his analysis and conversations with outstanding business leaders. These beliefs lead to different practices and significant stock market outperformance. He argues that not all people are obsessed by money. For most of us money is a means to improve our standard of living. Business is designed to create value and something that is useful to its customers. Market forces generate growth however they need to be harnessed. It is the entrepreneurs who are king. They create businesses to fulfil a purpose. Shareholders provide capital and are entitled to a dividend and a share in the increased market value of the company. Shareholders alongside the board have a responsibility for the conduct and success of the business. Shareholders have multiple reasons for investing. They are not all motivated by short-term gains. Directors are trustees and their good stewardship will result in increased company valuation benefiting shareholders. Business is not separate from society. Business is a part of society. Regulations stifle innovation and free enterprise. Voluntary good practice and corporate responsibility foster free enterprise.

  1. See my article entitled “My win, your loss” or the Zero Sum Game: The Mind-set of Financial Markets Executives. (2009). International Journal of Coaching in Organizations, 7(4), 18-43
  2. For further information on Tomorrow’s Company initiatives see
  3. Photo of Mark Goyder by Laura Noble. For further information on Initiatives of Change see
  4. For a more extensive discussion of these assumptions and philosophy see Chapter 3, The thinking that led to the mistakes of the West. pp 25-35 of Goyder’s book.