I’ll take this issue a step further. Underground minerals, water, flora, forests, streams, lakes… In short, nature. Everything required for the life cycle on Earth belongs to humankind whose population is nearly seven billion now. We use these natural riches to produce things. In other words, we borrow them from nature. However, we never want to pay off our debt for some reason!
“Money”, which changed hands and shape during the Industrial Revolution, has come until today with a circle of relationships that we find difficult to work out. Unless we count the last quarter of the previous century, we’ll see that shareholders used to call the shots on business management. They have decided what to buy, what to sell and how we will make or multiply money.
If we look at the agenda of the G20 summit, which was held in Turkey in 2015, we’ll find out that the money-based productivity of the system has not taken us to a very happy place in 150 years! Because this productivity has merged money with the concepts of bribery, corruption and abuse. It has erased our ethical values from our consciences. This productivity served another problem, which is as big as the ones we mentioned above, as the main course: unfair distribution of income!
Once the people who cared about these issues took part in the auras of companies in 1980s, another circle of relationships including shareholders became a current issue: “stakeholders”. Different segments of society started to “regulate” the business world in their ever-risi
ng voices. The media, academics, local and global NGOs, opinion leaders and the groups which claim that they have a say in all the aspects of life have suddenly become “stakeholders” of some companies “without giving any money”! In 1990s, these people started to talk about every area from human rights, climate change, women’s and children’s rights, people with disabilities, genetically modified organisms to nuclear power plants. In 2000s, seven out of ten topics put in the agenda of the European Parliament were brought up by these people.
In fact, scientific data about global warming, scandals of companies like Enron which wiped off the stock market, people who died because of drought and famine in Africa, epidemics, and hot wars invented to turn on the taps of the arms industry started to strengthen the opinions and existence of the groups defined as stakeholders. This situation came to such an extent that companies had to prepare “stakeholder” reports for governments, financial institutions and society in 2000s. Moreover, they had to get independent bodies to audit these reports. In other words, companies no more belonged to their bosses’ fathers!
One of the breaking points of this process went down in history as the World Trade Organization’s meeting in Seattle in 1999. Tens of thousands of people who claimed that the rich countries exploited the poor countries organised protests in the streets of Seattle. After these protests, similar scenes were witnessed in all the meetings where world leaders came together. Even George W. Bush, who was the president of the USA by then, had to use the “back door” to attend a similar meeting in the UK. In other words, “stakeholders” confronted world leaders, who claimed that they governed the world, together with people they did not know at all. These people in the streets did not care about the religion, languages, race, ages, professions or places of residence of the other people with whom they marched side by side. It was enough for them to have a say in the global issues such as global warming, famine, poverty, AIDS, epidemics, harassment, bribery, corruption, abuse or injustice.
Another breaking point of this development was the occupation of Wall Street, a shrine to capitalism, in 2008. People were fuming. Some bosses, who thought the companies belonged to their fathers and who had higher incomes than governments, stole and destroyed (!) the future and hopes of hundreds of thousands of people.
World leaders come together to discuss different topics every year. G20, meetings in Davos, NATO summits, climate change summits etc. No matter what institution hosts these events, income injustice, poverty, climate change and problems related to them are the unchanging agenda topics.
Let’s have a look at the results of their solutions.
There is such a huge gap in distribution of income that the fortune of the 62 richest billionaires of the world is more than the income of the half of the world population. (Only nine of them are women.) The Oxfam Report announced before the meeting in Davos in 2016 reveals in a very striking way where the economy, which is managed by the people who think the companies belong to their fathers, has ended up. In 2010, the fortune of 388 rich people was equal to the total fortune of the poor people in the world. The fortune of the rich people had increased from USD 500 billion to USD 1.7 trillion only in five years. What’s more, the world population had increased by 400 million within that time.
According to the data given by the UN, the money required for providing the education system with modern contents in the entire world, especially in poor countries, is USD 15 billion. Given this fact, it is a striking example that only 62 people have trillions of dollars in their accounts on the islands which are defined as tax havens. The amount in the “private accounts” in Switzerland was reported as USD 2.3 trillion by December 2015. One of the themes of the G20 summit held in London in 2009 was “to end banking secrecy”. After that date, private accounts increased by 18% only in Switzerland! It is estimated that this increase is 25% in all the tax havens. It is known that more than USD 7.5 trillion in total was put into these accounts! In fact, if that money on the islands was put in official accounts, modestly calculated, it would be a 200-billion-dollar source of tax revenue for governments. Imagine the things that can be done about the education, health and justice infrastructure in order to eliminate income injustice. And these are only savings of some individuals. There are also numerous companies that institutionalised the management of their businesses from tax havens.
ghostbusters.wikia.com
A magic wand works for 1%. David Cameron, the prime minister of the UK, emphasised that transparency had to be increased and that tax practices causing unfair distribution of income had to be eliminated everywhere ruled by the UK (including the tax haven islands) in Davos in 2013. However, no steps have been taken so far! G20 leaders carry on meeting every year. As they did in Turkey in 2015. We haven’t come much further since the meeting in Seattle in 1999. Figures show new developments against poor countries every year.
A striking example of unfair distribution of income can be seen in Jamie Johnson’s documentary, The One Percent. The interesting part of this entertaining documentary is that it has been produced by someone who belongs to the world of the one percent. Jamie Johnson is the great grandson of one of the brothers who established the empire of Johnson & Johnson. As they say: “He’s rolling in money.” You must watch this documentary directed by someone who has such a fortune. Jamie Johnson questions the one percent that includes him without hiding under the table.
This century is pregnant with developments as striking as the ones in the Industrial Revolution, in the history of humankind. The theses of capitalism and communism have completed their shelf lives in a short time in terms of the history of humankind. The “protesting” attitude, which started with Greenpeace in early 1990s and which continued in the streets of Seattle in 1999, brought another concept into our lives in addition to stakeholders: shapeholders. “Regulators” in other words.
Prof Mark Kennedy, who attended the Reputation Summit organised at Bogazici University in November 2015, used this term. Kennedy is an American senator. He worked as an adviser with Barack Obama and George W. Bush. He was introduced as one of the leading experts of the world in reputation management and lobbying. At that moment, university students were protesting the practices of the USA in the world in the person of Prof Kennedy. Moreover, they set up an outdoor exhibition in front of the building where the summit was organised and exhibited the practices of the USA which made the promise of bringing democracy especially in Iraq. Prof Kennedy defined the concept of “shapeholders” as the power of activists by including the protesters in his presentation. Kennedy’s forthcoming book underlines this approach: “Engaging to Win – When to Collaborate, When to Compete, Succeeding at Both” The other clues to his forthcoming book are:
• We should adopt the new rules for business engagement with society reflecting the rise of activism.
• Activism is penetrating into politics due to the course of events in commercial affairs. It should not escape our attention.
• We should try to understand and interpret the views and thoughts of others (society).
• The issues questioning the business world may be the new business goals. They should be checked.
In summary, Prof Kennedy emphasises that “shapeholders” also tell bosses that the companies do not belong to their fathers.
Toby Webb
Toby Webb, who laid the foundation for Innovation Forum after founding Ethical Corporation, made the last surprise about the “related” concepts at the end of the year. “Smallholders” refer to an approach which should be resumed from the point where Prof Kennedy left. Toby Webb says “How can brands help smallholder farmers be sustainable?” just as Prof Kennedy talks about defining the areas of “cooperation” in order to win the competition. However, Webb goes one step further and provides an address: “sustainability”. Thus, he emphasises that the commercial part of cooperation should also cover social and environmental areas. He states that they will evaluate this issue within the scope of “Smallholder Farmers Forum” in London on 22nd – 23rd March 2016.
When we put all these concepts together, we can claim that “shareholders” lost their meaning or that “shareholders” will not have a say in the new world order unless they reach out to “smallholders”. Eliminating unfair distribution of income in the poor countries in global terms will be out of the question anyway. However, expecting them to have an income level which will allow them to “live” is not too much. It is actually important for developed countries to establish this cooperation by taking account of the leading concepts within the scope of sustainability so that they can guarantee their own future. Anything on the contrary will be put in the “shapeholders” agenda. These people with an activist’s spirit do not miss any chance of “regulating” companies. Especially “regulating” the bosses who think the companies belong to their fathers!
Leave a Reply