Home » Caribbean News » Business Should Play A Greater Role In Improving Caribbean Society

Business Should Play A Greater Role In Improving Caribbean Society

INVEST-CARIBBEAN

By David Jessop

News
Americas, BRIDGETOWN, Barbados, Fri. Oct. 18, 2019:
Older
readers of this column may remember a time when most Caribbean economies were dominated
by family owned and run companies. Often linked by a family name to an older generation
of Caribbean businessman but much less so women, they were usually
paternalistic, influential and often philanthropic.

Such companies could be
found in almost every Caribbean nation in CARICOM, as well as in the Dominican
Republic, and the French and Dutch speaking Caribbean. Although they were in
business to succeed, were sometimes autocratic, often tried to maintain a monopolistic
position in their sector or country, and sometimes held back development, most coupled
this with a belief that they had a social responsibility.

While aggressively
pursuing commercial opportunity, these early Caribbean entrepreneurs were concerned
about the welfare of their employees, and their personal engagement ensured
that their company was about more than just delivering results for family,
shareholder or investors.

These were, and in some
cases still are, the companies whose leadership was willing to support the
growth of national, regional and external bodies able to represent the
interests of the private sector and aspects of civil society. They did not do
this just because they wanted to have greater influence over governments, the
unions or others, but because they saw value in supporting for example
improvements in education, health care and the public good on issues broader
than their immediate commercial interests.

Although some may quibble
or be able to cite negative experiences, to take three at random from a quite
long list, they would include Goddard enterprises in Barbados, Grace Kennedy in
Jamaica, Vicini (now Inicia) in the Dominican Republic, as well as others with
family names that have faded from view.

These and similar
socially responsible Caribbean companies continue to operate in nations from Guyana
to Dominica and the Dominican Republic and remain imbued with a social ethos
not found in many North American or European corporations. Others, however,
have become publicly quoted or have been the subject of takeovers or mergers.
These are often run by younger very able graduates with MBAs who are focused to
a much greater extent on delivering shareholder value, maximizing profits and
defending a narrow range of interests.

It is a development that
has occurred in many other parts of the developing world and has been facilitated
by the development of capital markets, the creation of regional stock
exchanges, and the ease with which money can flow between once relatively
isolated markets and jurisdictions.

In the last few decades
this has been the way of the world, driven by large corporations and
ultrawealthy individuals whose behavior in response to economic globalization
at worst is summed up in the movie ‘Wall Street’ when Gordon Gekko says that
not only is greed good but that it “captures the essence of the evolutionary
spirit.”

This over simplified and
corrupting world view has, however, begun to change as significant numbers of
major corporations and some thought-provoking writers have begun to question
the role of business and its social utility.

In August, the US
Business Roundtable which brings together about 200 of the country’s largest corporations,
including names such as Amazon and General Motors updated its thinking about the
role of a corporation.

Since 1997 the powerful
business body has regularly published a ‘Principles of Corporate Governance’
document which has stated that corporations exist principally to serve their shareholders.
However, in a ground-breaking statement it said this year that it had become
clear to its members that such language does not accurately describe the ways
in which CEOs ‘endeavor every day to create value for all our stakeholders,
whose long-term interests are inseparable.’

It also noted that many
Americans were struggling, too often hard work was not rewarded, and ‘not
enough is being done for workers to adjust to the rapid pace of change in the
economy’. ‘If companies fail to recognize that the success of our system is
dependent on inclusive long-term growth, many will raise legitimate questions
about the role of large employers in our society,’ the US Business Roundtable
observed.

This near revolutionary
thought is encapsulated in an influential book published last year which focuses
on the failures of modern capitalism. Written by Paul Collier, a respected
development economist, ‘The Future of Capitalism,’ provides a thought provoking
conservative critique of the deep problems facing market economies, the
inequalities that have been created, and the need to find ethical and
economically rational ways to address the social imbalances that are in danger of
tearing them apart.

Professor Collier argues
that the answer lies in ‘shared belonging’ and setting aside ‘entitled individualism’
and ‘revivalist ideologies’ so that those who are successful accept ‘a web of reciprocal
obligation.’ This he suggests should be the basis for addressing the widening
social inequalities that modern capitalism has created, and which have led to
the rise of potentially dangerous populist movements. His answers, which are as
much about ethics as economics, suggest that business, individuals and
governments steer capitalism towards long-term solutions that provide for the
common good.

To be clear, his is an
argument about the emergence of just societies in which business plays a leading,
more balanced and equitable role in social development; ideas, although subject
to justifiable caveats and criticism, that have found support from individuals
like Bill Gates and the leader writers of the Financial Times.

What Professor Collier
proposes in a highly accessible way is a new model for society that would fit
well with and find resonance in the modern Caribbean, enabling it to build on
its unique sense of identity, social awareness and religion-based values.

If the region’s failing
education, health and social care systems, and its stagnating public service are
ever to be resuscitated, Caribbean companies ought to be debating how in their
own self-interest they can do more to encourage and deliver social outcomes
that ensure national and regional growth.

The new dialogue on the
purposes of capitalism suggests that there is a much wider, strategic and
direct social role that corporations can play while still delivering profits
and shareholder value.

These are issues that the Caribbean’s largest companies should be meeting to discuss with Professor Collier and others.

David- Jessop

EDITOR’S NOTE: David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org

The post Business Should Play A Greater Role In Improving Caribbean Society appeared first on Caribbean and Latin America Daily News.