Q&A with Will Hutton
Will Hutton is the Co-chair, of The Purposeful Company. He is the former Principle of Hertford College, The University of Oxford and former Chief Executive of the Work Foundation.
What role has purpose and a purpose-driven mindset played in responses to the pandemic by the business, finance and accounting community?
Purpose has played a surprisingly significant role in the COVID response. Even in sectors as hard hit as hospitality, leisure and retailing employers have fought to retain staff as part of their purpose as good employers, while in more sheltered sectors companies have taken deliberate decisions not to lay off people – so that overall unemployment numbers, although rising, are lower than originally feared. Banks have been purpose driven in accelerating lending to distressed business borrowers, while AstraZeneca, selling its vaccine at cost, is being true to its purpose statement – to use science to deliver life changing medicines.
How can purpose play a role in a sustainable recovery?
It is now widely accepted that economic resilience is an economic imperative, and that public health is the precondition for all forms of economic and social activity. Purpose led organizations, that insist that their reason to be is the meeting of a social need, are precisely the organizations we need to drive a sustainable recovery.
What actions will support the adoption of purposeful approaches to business and finance?
The necessary actions range from the cultural to legislative change. First of all we must talk about why purpose matters over and over; we must get the message across. Find exemplars – Capita, Unilever, AstraZeneca, RBS and Barclays , the National Grid, Severn Trent etc – and discuss what they are doing, why it is different and why it matters. Continue to gather evidence as we do at the Purposeful Company ( I am co-chair). Nothing is possible until asset owners/the investment industry recognises the importance of purpose, and builds it into their approach to stewardship. The new Stewardship Code and recently published recommendations of the Treasury’s Asset Management Taskforce must be taken to heart and lived. Investors should be given a “Say on Purpose”, required to vote triennially on purpose – this, along with votes on takeovers, sustainability targets and pay – should not be delegated to proxy agencies. The Corporate Governance Code must be strengthened further: companies should establish purpose metrics and report on them systematically. Ultimately we must redefine fiduciary obligations of directors in a new Companies Act, and establish new pools of capital to create anchor “block-holder” shareholders to support purposeful companies.
