Traditionally companies had a clear directive – to maximise profits with a priority on the interests of shareholders. Today the landscape has shifted significantly with the importance of other stakeholders, ethical practices and corporate social responsibility now of equal importance. David Pugh, our CEO Elect, explains where this improved approach originated and how it relates to our own activities.
Some years ago, when I was studying economics, a key point that never sat well with me was the concept that in any shareholder owned company, it was the shareholders’ interests that were paramount. I was taught that when push comes to shove, it’s the role of senior management to put this principle into practice, ensuring that shareholders’ interests always come first, often to the detriment of all other stakeholders.
It always seemed to me that when you start playing one group of stakeholders off against another then, by definition, you’re running the business badly. And ultimately that’s not in anyone’s interests.
So I was delighted to read, back in 2019, that the CEOs of nearly 200 of the world’s biggest and most successful companies had signed a statement at The Business Roundtable to the effect that they regarded all stakeholders’ interests as equal. Notably the announcement agreed that shareholders would no longer be put first in the pecking order.
And then last year I was intrigued to learn about a new corporate movement to introduce society and the environment as equal stakeholders. The concept of becoming a Certified B Corporation has now attracted the support of over 3000 companies globally, and enjoys a pretty simple motto: people, planet, profit. Vitally, these three elements aren’t considered in any order of importance; perhaps the best way to picture them are as equal feet of a three-legged stool. This idea very much resonated with me and felt like something of a validation to those concerns I’d felt after the economics lessons of my youth.
So, as I prepare for my new role as the guardian of this 120-year old business, I’ve been thinking about how this model relates to us at The Fry Group.
People means everyone involved with our business. Everyone we’re connected to matters. Our clients are an important part of this, of course, but equally so are my colleagues who trust the company to treat them fairly and help them advance their careers. Others too are included; our business partners, suppliers and those who live and work in the communities where we’re based.
Planet – in the long run, it’s going to be extremely difficult for any business to thrive if our planet doesn’t, and at the moment it’s facing real threat. This is not about fine words; it’s about specific, immediate, effective actions – from the smallest to the biggest, and from the easy and painless to the difficult and acutely painful – to make sure that whenever we win, the planet doesn’t lose.
And – with apologies for the cliché – last but not least comes profit. If we don’t make money, then we lose control of our future, and all our hopes and aspirations evaporate. Equally, when we do make profit, everyone can benefit; clients when we can invest in providing a better service, our team when we can help them achieve a better work/home balance, communities when we can afford to deliver a financial education programme for those most in need.
At The Fry Group, this all comes together in our purpose to help people achieve financial freedom. This refers to our clients, and the work we do helping them to plan their financial futures. It also encompasses our team, through exploring what financial freedom means to them. This translates in many ways, from supporting a healthy work and home balance, and equity ownership for all, to championing women in financial services. Helping people achieve financial freedom also includes our desire to work to improve financial literacy worldwide though partnering with local charities to help those most in need.
There’s a lot more I could say about how we’re implementing our purpose – perhaps it’s most simply summed up with the phrase “doing well by doing good”. But I think that’s enough for one blog. After all, I wouldn’t want you to imagine that our broader, big-picture ambitions have blunted our commercial focus. They haven’t.
I’m pleased to say that we do seem to have come on a long way from those dimly remembered economics tutorials about how the shareholders used to matter – but no one else did, much.