Stewardship in disruptive times

I’m in Singapore, working with Stewardship Asia, that impressive organisation with which Tomorrow’s Company has been proud to be a Research Partner for nearly five years. Gathered in the same hotel that will, I understand, next week be hosting the Korean summit were 200 Asian business leaders who share a commitment to stewardship. Stewardship –  that difficult yet simple idea that the job of any owner is to manage the assets and relationships in her or his charge so that at the end of their tenure, they are passed on in better condition. Making money may be the by-product, but it is not the objective. It’s an ethic that stresses responsibility as well as rights, the long term as well as the short term, achieving impact as well as making profits. It resonates strongly with Buddhism and Confucianism here, just as it resonates with the Quaker and Methodist and other Christian beliefs in the west. This year the theme of the Stewardship Asia Dialogue is stewardship in a time of disruption, and the session which I was invited to open and close was entitled ‘Stewarding New Frontiers, New Future’. The recent Tomorrow’s Company report on The Courage of their Convictions – how purposeful companies can prosper in an uncertain world provides several good examples like Atom Bank and Green Light Pharmacy and Simply Business. We spoke about the paradox of agility, so well expressed in that report by Antony Jenkins, founder of 10x Technologies and former CEO of Barclays: ‘We can’t predict…how technology is going to change our world or what the next geo-political hotspot is going to be. ‘You can’t become agile overnight. Agility requires you to retool the way the organisation operates and ask fundamental questions. What are the sorts of people we hire? How do we organise them? Does our culture support and reward risk take? Do we penalize failure or do we regard it as a learning opportunity? Creating an agile business takes time. It’s fundamental to future success. . Today’s short term was yesterday’s long term." In summing up at the end of the dialogue, I chose four themes I had heard. First was the importance of a purpose beyond profit. Former Cabinet Minister Lim Boon Heng had said that in his view ‘the real role of an employer is to seek for others the best life possible. …Everyone must share in the growth with the shareholders’. Cecile Ang, President of Diamond Hotels and a member of the family owning one of The Philippines’ largest companies, talked about the role of her company in nation building and job creation. Chatri Sityodtong, Chairman and CEO of ONE Championship, talked about the role of martial arts in communicating Asian values and inspiring the young to value self-discipline through promoting Asian role models. Secondly, there is the sense that the new threats to the environment and society also represent the new opportunities for business. Dharsono Hartono, the CEO of an Indonesian company, described how he has built a business that promotes climate-smart agriculture. It helps tree growers harvest responsibly and sustainably. Ho Ching, the CEO of Temasek, and guest speaker at the Inspiring Stewardship lunch, warmed to this theme. She described Temasek’s strong sense of its origins in the fledgling city state. ‘We have grown with Asia’ she said. ‘And we reinvest in Asia’. Temasek originated as a state holding company which has gradually extended its portfolio without making the Western lurch to total privatisation of state assets. Temasek, she said, has a constitutional responsibility to preserve past reserves for future generations. If only the UK had the vision to create such a fund and keep it out of the hands of sharks and free-market ideologues who understand the price of everything but the value of nothing! This brings me to the third theme I had spoken about – the question of ownership and the dysfunctionality of the Wall Street dispersed shareholder model.  Through the conference I had asked participants online which companies they most admired for their stewardship in disruptive times. The first answers were Apple, Alibaba, Google, and Weibo. ‘Really?’ I asked. These are listed companies reporting quarterly to Wall Street or its imitators. Can we truly imagine that with the short time horizons associated with public company status, they will continue to make the investments in agility that are essential to survival? Hugh Young of Aberdeen Standard Life had spoken frankly about the battle institutional investors faced to get stewardship considerations taken seriously by listed company asset managers obsessed with immediate earnings. I suggested to the conference that new forms of ownership were bound to emerge that better fitted the stewardship model. I mentioned Richer Sounds in the UK, whose founder had decided not to do an IPO or hand a highly successful business over to family members, but to put in his will that on his death ownership will pass to a trust which operates in the interests of his employees. In her speech, Ho Ching spelled out the need to balance short term and long term. ‘If business goes through cycles, shouldn’t we reward for the long term. The people we want in Temasek will not be those who go for short term gains.' The fourth theme that I heard in the dialogue was the importance of the ecosystem on which companies depend. The dialogue was full of impressive accounts about how individual companies – for example the Banyan Tree Holdings hotel group, were involved in nation-building, and working towards meeting the Sustainable Development Goals, but for these individual efforts to have their full effect, they needed to contribute within the frameworks set by governments, industry bodies and providers of capital. Education, and training; tax and incentives; infrastructure; health; the rule of law. the entrepreneurial climate.  Singapore, sometimes derided by those on the left as a Thatcherite free-market model, enjoys a tripartite system where government, employers and trade unions work closely together. The dialogue was full of impressive accounts about how individual companies were involved in nation-building, and working towards meeting the Sustainable Development Goals, but for these individual efforts to have their full effect, they needed to contribute within the frameworks set by governments, industry bodies and providers of capital. This is something that was well described in the Tomorrow’s Global Company report. I have known and worked with Ong Boon Hwee, CEO of Stewardship Asia, for four years now and this partnership that has taught me so much about the Asian approach to business stewardship. Different backgrounds but common goals –  business and investment and ownership as a force for good in serving society today and creating the dividends that will underpin a sustainable society tomorrow. How else will we achieve progress and prosperity?