I would love to see New Zealand lead on bringing true ‘stakeholder capitalism’ to life, and my time at the World Economic Forum suggests the world is up for it, too, writes Shruthi Vijayakumar.
I strapped on the crampons and stepped onto the icy, main street of Davos, the Promenade. The cafes, ski stores and restaurants that usually lined this street were all rented out and replaced by big brands and governments. Facebook, Accenture, SAP, “India Lounge”: all were trying to lure people to events they were hosting in their space. Up ahead was the Congress Centre where the main events took place.
As I scanned the main lobby, through the sea of suits I could see Yo-Yo Ma getting ready for his cello performance, Christine Lagarde, Al Gore and others who I’d only ever seen on screens, having conversations. Typically, companies pay anywhere from 60,000 to 600,000 Swiss Francs to become partners of the World Economic Forum (WEF) and get access to these meetings. Ministers, heads of state and civil society leaders are also invited, as well as members of the forum’s communities. One of those is the Global Shapers, which I am fortunate to be a part of. Fifty of us attended from the Global Shapers Community and were excited to contribute to the conversation given this year’s theme on “Stakeholder Capitalism”.
For many decades, the founder and chairman of the WEF, Klaus Schwab, has been advocating for a reformed capitalism that serves all stakeholders – communities, employees, customers, shareholders, nature – a move away from the shareholder primacy model advocated by economists such as Milton Friedman through the 80s which has become today’s norm. The latest Global Risk Report by the WEF highlighted that the greatest risks facing humanity in 2020 are environment related, specifically climate change and biodiversity loss. This provided the foundation of many sessions, which focused on how we safeguard nature and the changing role of business and capitalism to do so.
Most of the sessions and what we see through media, make up a small fraction of what takes place at Davos. The panels and talks are fascinating, and a treat to the intellectually inclined learner – from exploring economic history with Nobel Laureates to hearing Sundar Picchai, Google CEO speak about the AI and quantum technology. However, it’s beyond these flashy sessions that the ministers, CEOs, and others meet in closed rooms.
Davos is often criticised for being a meeting of the super wealthy to further their own interests. And no doubt many business deals are signed behind these closed doors and many come to Davos to be able to connect with clients and customers in person, build their brands and ultimately grow their bottom lines. However, I also feel many leaders across public and private sector are realising that we need greater leadership in the face of an ecological and social crisis. There were several meetings and spaces, such as a Dinner for Nature & People hosted by WWF where I felt leaders sincerely came together to explore what collective efforts could be taken. The WEF has incredible convening power and few spaces exist globally where so many cross sectoral leaders can sit in a room together and engage in dialogue and decisions. In this light, various new initiatives such as the WEF’s new initiative to plant 1 trillion trees have launched.
I had the opportunity to lead a session on systems thinking & culture change and sit on a panel on how leaders can create a prosperous future – through both, I voiced the need for redesign of the systems and structures, which felt as if it were the elephant in the room. We spoke of stakeholder capitalism, yet I felt many companies are only willing to act to serve the needs of other stakeholder so long as shareholders are still getting profits and business is growing. When there are trade-offs to be made between profits and planet, there is little desire to make them, and little desire to make sacrifice which I feel may be necessary given the scale of the ecological and social crisis we’re witnessing.
Every year at Davos, Oxfam launches its global inequality report, which this year showed that the world’s 2000 richest billionaires, many whom attend the WEF, own more wealth than 4.6 billion people who make up 60% of the world’s population. Yet would they be willing to let go of some of this wealth? Pay more taxes? Reduce wage inequality in their companies? While some leaders like Sathya Nadella announced Microsoft’s move to be carbon negative by 2030, I felt many companies would only take act if customers or employees demand it and it makes “business sense” – reinforcing to me how critical it is for us as consumers to ensure we buy ethical products (and less stuff) and work for values aligned companies.
In light of system redesign however, I believe New Zealand has a unique opportunity for leadership on the global stage here. When people I met realised I was from New Zealand, I was typically greeted with much warmth and excitement and remarks of “I love your prime minister!” I would love to see governments like New Zealand lead on bringing true “stakeholder capitalism” to life and show the world how an economic system, grounded in wellbeing of people and planet could work in practice and provide inspiration for other economies to follow suit. I believe our current government holds this intention – yet much work must be done in questioning the very purpose of our organisations, and ensuring policies, structures, metrics are fit for purpose and support wellbeing of people and planet. How might we all support this vision, from how we live our personal lives to the role of our organisations and the ways we engage in society?
All in all I am very grateful to have had a seat at the table, to have my world views challenged, and to realise that as much as we put heads of state, corporate CEOs and celebrities on pedestals, just like everyone else, they struggle to find food at meal times and sometimes slip on the ice.
The Spinoff Weekly compiles the best stories of the week – an essential guide to modern life in New Zealand, emailed out on Monday evenings.