How times have changed. It is remarkable to think that it was just eight weeks ago that business and political leaders from around the world gathered in the Alpine town of Davos.
The 50th World Economic Forum was dominated by discussion of the climate crisis, global trade and artificial intelligence. US President Donald Trump declared that the US was enjoying a “boom the likes of which the world has never seen”.
There was also much high minded discussion about the role of “purpose” in business and the concept of stakeholder capitalism.
Just a few months on, in the midst of the coronavirus crisis, it’s clear that now is the time for business to put its words on purpose into action.
Many companies are hitting the right note. Timpson’s announced that it was closing its 2,150 stores but keeping all staff on full pay. Supermarkets are reserving special opening hours for the elderly and emergency workers. Barclays was quick off the mark with its £14bn lending fund for SMEs.
On the other side of the ledger, too many businesses have been seen to behave badly. The actions of Britannia Hotel Group in sacking workers on the spot by sending a cold-hearted letter went down very badly on social media. Wetherspoon’s boss Tim Martin’s call for pubs to stay open, saying he would “take his chances with coronavirus”, was seen as irresponsible.
The pandemic has already caused the actions of companies to be put under greater scrutiny than ever before. How you behave now, towards employees, customers and suppliers, will have a long-lasting effect on your reputation and license to operate. This could be a perilous time.
Portland is running a daily tracker of public attitudes to Covid-19. Here are some of the things that it shows.
First, the public agree with additional economic support in these difficult times for business, but want strings attached for this support. Some 71 per cent favour restricting chief executive pay, 57 per cent want to restrict dividends, and more (32 per cent versus 28 per cent) favour commercial rates of interest on loans than don’t.
Second, the government’s handling of the crisis is scoring consistently higher than any sector of business — and this sentiment has increased in recent days. 70 per cent approve of the government’s handling of the crisis, and 69 per cent approve of Boris Johnson’s response in particular. The average approval of large businesses lags at 55 per cent, and this varies considerably by sector.
Third, the public now favour increased regulation of essential sectors — a significant proportion of the public say that the outbreak has made them more likely to support government intervention, especially in the healthcare (up 37 per cent), food (up 32 per cent), and energy (up 30 per cent) sectors.
Unless businesses can assert their purpose to provide solutions for people’s lives, there is a risk of a powerful shift in people’s attitudes towards the state and against business. Just as the global financial crisis set corporate reputations in concrete for a decade, so will this worldwide pandemic.
Businesses must respond in a way that meets the moment and the expectations of their customers.
Mark Flanagan is chief executive of Portland.