The Problem with Criticism of Business in the Senscot Bulletin

The Problem with Criticism of Business in the Senscot Bulletin
Martin Stepek
09.11.12

Laurence has kindly invited views contrary to those expressed in the Senscot bulletin on the private sector. Even that phrase “the private sector” is problematic because having read and enjoyed the bulletins for years it is not easy to pinpoint exactly what Laurence actually dislikes. My estimate is this: values such as greed-based businesses, top directors getting paid extremely high salaries, private companies trying to move into public and third sector roles, lack of community participation and ownership. I hope this partially pinpoints the areas because it is vital if we are to have a discussion that we start by knowing what we are to discuss.

I am writing this because I was born into and remain in the private sector, though I also work in social enterprise, charity and other sectors in a fluid flexible way. My family had by Scottish standards a major business, one of the top 500 by size and profitability. My dad had two Rolls Royces – at the same time – which frankly we, his children, hated because it was such a display of wealth. But the same person, my Dad, constantly brought homeless people to eat lunch at our kitchen table with my mum and my brothers, sisters and I, and we had a homeless man live with us for over a year. Dad entered into the world of football to help save Hamilton Accies from merger with Clyde in 1969, poured in his own money to save what is essentially a community asset. Our business funded Polish language and culture degrees at Glasgow Uni and organised food and medical aid to Solidarity during martial law in Poland. We supported countless – and I mean countless – charities in Lanarkshire and Glasgow.

Now does that make my family business a greedy, opportunistic entity, a social enterprise, a hybrid, or just a reflection on the array of values and differing aspirations of a typical family?

I have grave misgivings about the stock-listed corporation model, largely because its ownership structure is anonymous and distant from employees and community. I have a strong instinctive dislike of disproportionate earnings of top executives. But I know a lot of people in these corporations, some in the highest paid positions. So many of them share our common social concerns, most have misgivings about their own salaries and company structures. But short of martyring themselves by denouncing the hand that feeds them so well what can they as individuals do? If they leave – and many do in an attempt to find work that complements their own values – another manager will replace them. If they accept a lower salary the money just goes to the anonymous shareholders (which of course includes most people who have a normal pension.)

If Scotland, or indeed the UK, were to unilaterally clamp down on top salaries, the PLC ownership structure, and other issues perceived as unfair or amoral, it is so easy for shareholders, top directors, investors to just up ship and leave. We might say good riddance but ask an unemployed person what type of corporate structure he’d like his job to be based within and he’d take any. We have a thoroughly horrendous economic system based on nation competing against nation for private investment, which filters down to region or town competing against town. If my town of Hamilton gets £10m investment by say John Lewis for a call centre, that means every other town in Scotland, UK, the world doesn’t get that, so they’ve lost out. I don’t want to get jobs for my home town at the expense of jobs elsewhere but that’s the system and it is global so we need to address it at a global level. Anything done locally is window dressing.

So we’re stuck between the proverbial rock and hard place. But we need to have conversation, and dialogue is better than monologue. My worry is not about Laurence’s values and views – mine are virtually identical – but the language and labels he sometimes uses. It alienates the very people in the private sector who would most like to explore this stuff in depth. Frankly the third sector as a whole and all who are generally perceived to be supportive of radical business and economic change, let alone the social enterprise movement, does not have the strength on its own to make any of the profound and usually necessarily global changes we need.

Hard though it might be for some to stomach, we need the Richard Bransons, Bill Gates, Warren Buffets and the local, Scottish and British equivalents, as well as top socially concerned lawyers and accountants from the PWCs, KPMGs, Deloittes and Ernst and Youngs of this world to be part of this exploration on how on earth we get from a crap skewed system to a sustainable (in all its senses) one. It is not easy to effect radical change and get it right – my grandmother’s death from starvation at the hands of Stalin’s Russia makes me wary of revolutionary steps – so we need thoughtfulness and we need friends and coalitions, not fractured groups.

I agree entirely with Laurence’s fears and concerns that by allowing the big business groups into the halls of the social enterprise movement there could be an erosion of the core values and purpose of the movement. But this is a risk I think we all have to take, and have the self-belief that you won’t stray too far. The alternative is to be like the sad sights of far-left groups so effectively mocked by Monty Python’s Life of Brian – marginalised, squabbling amongst themselves, never able to influence of attain power – while the ills of society continue to be ignored or inadequately redressed.

So let’s talk, and let’s have the courage to be inclusive without compromising what matters most to us, and let’s use language that attracts rather than alienates. All that said, keep up the very important good work that Senscot does.

Martin Stepek
CEO
Scottish Family Business Association