An encouraging set of results (relatively speaking) from the Co-operative Bank yesterday suggest it is, at last, beginning to turn itself around after a disastrous few years.
The lender cut pre-tax losses to £135.2m in the six months to the end of June, from £177m the year before, just as it embarked on a vast restructuring in which £443m of debt will be written-off while it raises £250m through a share issue.
Co-op Bank may have been a standard-bearer for ethical business, but the £1.5bn black hole discovered in its balance sheet in 2013 was a sign those high morals did not extend to corporate governance.
Its story demonstrates why, even in companies that place ethical values at their core, good business practice must be the priority.
Ben & Jerry’s is a tale of social responsibility done both right and wrong. Founded in the late 1970s, its owners, Jerry Greenfield and Ben Cohen, set up a foundation to invest profits into projects in the local community. As they sold to Unilever two decades later, the pair insisted the company should preserve their social mission and brand integrity. That was duly observed by Unilever chief executive Paul Polman, who has made improving the conglomerate's social responsibility a personal crusade.
Fast forward 17 years and Unilever found itself in the awkward position of having to fend off an approach by Kraft (a company whose own ethics were rather called into question following its messy takeover of Cadbury in 2010) after sales growth fell below analyst expectations in the fourth quarter of 2016. There were whispers by some that Polman had let his attention stray too far towards how the company can help others, and too far away from how it can help shareholders.
Those who put social responsibility before company profits forget who their shareholders are: for the large part, they are thousands of pensioners and savers, who lose out when the company loses out. The Co-operative Bank discovered, to its chagrin, that just because it boasts ethical values does not mean it is morally blameless. Its workers and investors deserve to benefit from its successes as much as anyone.