OPINION: There is a growing gap between the community at large and big business that I believe can be reduced for the benefit of both.
Overnight I addressed an audience filled with people who have the potential to resolve this discontent. Business Events Sydney is a change agent dedicated to improving our knowledge economy, and as such invited me to speak to their community — an impressive array made up of business, academic and government representatives. Here’s what I told them: community discontent with big business is not just local but is a global phenomenon and this discontent has a number of drivers.
First, a key driver is fear. Sadly, a day doesn’t go by without reports of terrorism and incidents that affect the lives of innocent bystanders. The result is that all of us, to varying degrees, worry for our own security and that of our family, and we question the failure of government and big business to protect us. This fear is exacerbated for some by “disruption” that threatens the continuance of the jobs of many.
The use and enormous power of social media is another driver. The enablement provided by social channels (often magnifying the views of the angry) has an effect on reputation and trust in large organisations. It can also be the purveyor of fear.
Remuneration and community concern over growing income inequality is also a contributor. There is no doubt the disparity between the basic wage (or even the wages of the middle class) and the top salaries has grown. The community blames big business for this disparity.
Many large companies have grown used to listening to themselves too much.
The fact businesses have a great tendency to operate for the short term, sometimes at the expense of the longer term, fans discontent. The result of this is there is considerable pressure placed on businesses to ensure they make profits immediately rather than building strong and resilient businesses for the future. Often this also makes businesses less open with their customers hoping to avoid a short term backlash or penalty but risking long term estrangement.
I believe there is much that can be done to at least try to reduce community discontent and as a result allow us all to live in better harmony. Education is fundamental to assist us in this regard.
The first aspect is to provide greater clarity to the community to understand “what is big business”. Appreciation of the benefits of big business, such businesses after all being entirely comprised of individuals, is fundamental. Business should convey this and indeed how it should be conveyed are interesting questions that I believe should be thought about in depth.
There is no doubt we need to educate Australians from the very young to the elderly on matters of finance. In my view, in addition to providing more understanding of what big business does, education should be provided on what is risk; on how risk and reward work; what are the vagaries of the financial markets and interest rates; and what financial products actually mean. This, together with improved financial skills that people need to run their day-to-day lives, would help in alleviating potential aggravations between big business and their customers.
Big business can play a part in assisting to reduce discontent through corporate social responsibility programs and working with their staff to break down the barriers in our communities demonstrating that after all we are all human.
Business has to be more open and to listen. When a corporation makes a mistake it should not hide it; transparency is key. This openness needs to permeate from top to bottom.
Many large companies have grown used to listening to themselves too much. I think their executives need to be open to the views of others, even critics. This is part of being a successful, modern company. Doing this also means giving up on the arrogance that can exist in large and powerful companies by embracing greater humility in the way business is done.
Effective whistleblowing provisions must exist. They must be established clearly and protectively for those who wish to use them. They should be encouraged and it should be clear that no retribution will result for the person blowing the whistle.
In my view, big business can play a part in assisting to reduce discontent through corporate social responsibility programs and working with their staff to break down the barriers in our communities demonstrating that after all we are all human.
I recognise that we are living through a period when there are things to fear and when large organisations at times let us down. They sometimes make mistakes and cause harm. My message is that rather than just being cross with each other, we should work together to reduce discontent.
Big business should assist the community to understand what they are doing; opening the windows to reduce opaqueness; acting with humility and indeed true involvement in society. They should celebrate the legions of people who work within their organisations and are the backbone of both the business and the community.
In return the community should be open to learning about what big business actually is and the people that comprise it; and perhaps steer away from the blame game.
David Gonski AC is Chancellor of UNSW.
This opinion piece was first published in The Australian.