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The rules have changed

14 December 2015 by Henry Ker

The rules have changed - read more

Dame Barbara Stocking speaks to Henry Ker about tackling gender diversity, the ethical dilemma for companies and how to bring about change

Barbara was CEO of Oxfam for 12 years and recently returned to her former all-female college, Murray Edwards of Cambridge University, as President. 

 

Your mission at Oxfam was to ‘change the rules of the world for the poor’. Does this need to be embraced by companies outside of the charity sector?

A lack of regulation is common in developing countries. Nonetheless, companies have a responsibility to operate ethically in these places so that they have a positive impact on the people. However, most businesses will conform to the government’s regulations and feel it is not their job to push for good regulations. Companies should bring the same level of ethics that they would if operating in the US or the UK – this includes how employees, customers and suppliers are treated.

It is in the interest of companies to show their support for better regulations in some of the world’s poorest countries. This would mean that there is a level playing field between the companies who are trying to behave ethically and the others.

On a global level there are things that companies can do right. For example, an enormous number of companies have signed up to climate coalitions, although this is not completely altruistic. They need to know the future level of carbon tax and if this will affect their business. There needs to be a global agreement on climate change – businesses need to know how to invest and what to change. I think that is why so many of them have signed up. I am not saying the private sector can take on this challenge alone, however, it has an enormous role to play both locally and globally.

Do companies have an obligation to ensure they operate sustainably?

Definitely. At Oxfam we did a study with Unilever in Indonesia called ‘The poverty footprint’. We looked at every way that Unilever influences poverty in that country, through its supply chains, distribution networks and even through what it was charging poor people for its products.

The interesting thing was that Unilever stayed in that country throughout the East Asian financial crisis when many other companies left. Unilever kept marketing its products, so it was in its interest to do things that were positive in order to sustain its supply chains and in turn sustain its market. In terms of sustainability of businesses, that is very important for the future. Many companies know that it is the people in the poorer countries of the world who will be their customers of the future. We are saturated with business in the first world and, therefore, building good relationships in emerging countries makes business sense. A business that delivers for poor people is good news for both sides.

A recruiter once said to one of your students, ‘You may think what we do is immoral but we make a lot of money’ and that stopped her applying. Do you think we are seeing the emergence of an ethical generation?

From a female perspective, certainly. In a recent Murray Edwards alumni survey, 70% said that a good employer is one where the employee personally feels they are able to make a difference in the world. There is something within women that is very clear; they want change the world for the better.

There is a lack of trust in businesses around the world. The public, for many different reasons, holds companies in very low regard. Our students are apprehensive about beginning their career in the private sector because they value more than just making money.

A recent visitor to the college from a major investment house in the city said, ‘Sometimes I feel if I could take a massive cut in salary to do something that would really change the investment industry to be more positive, I would take it.’ A lot of people are motivated by something other than money – the difficulty is trying to wean people off it who have got used to having rather a lot of it. If people feel discomfort about the unethical private sector, that is the start of the change but it is not easy.

I learnt at Oxfam that it is employees who ultimately bring about change in a company – a good example is Nike. In the 1990s Nike was hit heavily by campaigning NGOs on how clothes were produced. They knew the facts of what was happening, but it was actually the employees who put the pressure on the company. The employees did not like working for a company where people said, ‘oh, you work for Nike, do you?’ Employee pressure is important to bring about change, but it has to be publically known what is egregious about what that company is doing.

I can imagine the same is happening in banks. It is ok when you are in your banking bubble, but when you speak about your job to the rest of society, people turn away. That is not very pleasant.

Companies’ failures are becoming more visible as mistakes are easily broadcast via the press and social media. Will this force them to operate differently?

It helps because there is a mix of pressure – the other major force for change is the consumers. The Starbucks example [a 2006 trademark dispute between Starbucks and Ethiopia over the company’s attempt to use the names of Ethiopian villages on their packaging without paying the communities] was an issue that people in the US and Europe voted against with their feet. Starbucks had to pay attention to it.

In the pharmaceutical industry example [in 2001 the pharmaceutical companies took the South African government to court over importing affordable generic versions of drugs for HIV/Aids], it was not so much consumer pressure as public outrage. People were dying in Africa from HIV and AIDS, yet drugs were available for them. Given that such large numbers of people were affected, it was possible to build a public campaign to make people aware of what was happening. The public was disgusted by it.

With employees wanting to feel reasonable about their employer, consumers putting the pressure on organisations and, where you absolutely need it, regulation forcing better standards, change can happen. Investors can also play a part, particularly pension funds that are representing large numbers of people. If they make enough fuss, they can manage to affect change without losing the income that they get out of those investments.

In a recent lecture at Murray Edwards, David Pitt-Watson [London Business School academic and former fund manager] spoke about a recent pharmaceutical case in India. Around six people wrote to an investment fund about what the company was doing ­– this was enough for the fund to speak to the company. The fund has tremendous power there.

An individual, NGO or journalist may bring the revelation to the public’s attention, however, it is then important to take action with investors or the company. Pressure must be mounted from all directions in order to affect change.

What are the challenges facing the charity sector? Can the corporate and charity sector learn from each other?

Corporates can learn from charities and public bodies because the levels of transparency, even with the difficulties, are much higher than the corporate sector. This willingness to be transparent and the knowledge of how to handle the public and the media is, surprisingly, often better than the corporate sector.

The charity sector has learnt a lot and still can learn a lot more from the private sector. It is about good management; the corporate sector is more professional and has been professionally managed for much longer. A lot of that is being taken on by the charity sector.

There are two different issues for the charity sector. One is fundraising – how you go about this is a tricky issue. Do people like chugging [street collectors, often called ‘charity muggers’]? Most people do not, but young people do not seem to mind. More recently, fundraising phone calls are causing distress and that is worrying. Therefore the big challenge that the charity sector faces in the UK, where the market is saturated, is explaining what it is that the charity is doing. That is at the heart of the fundraising difficulty.

There must be better regulation on this to establish a level playing field. In my time at Oxfam my fundraisers would often complain about the difficulty in competing in the sector with one arm tied around their backs as we did not use highly emotive imagery in our fundraising. I do not think that appeals to the public anyway.

The second issue is illustrated by Kids Company. It is worrying when charity leaders think that they are celebrities in their own right. Charity leaders are servants, both of their organisation and its mission. They are also servants of the supporters who trust them with their money to do things that they cannot do directly themselves.

If you lose that integrity, it is very bad in any sector: private, public or NGOs. If a charity does not have integrity in its purpose, it can cause people to distrust the rest of the sector. If we lose that relationship with the public, that is terrible.

As the former CEO of Oxfam, what made you return to education at Murray Edwards College, Cambridge?

I came back to this college because I felt the world had not got there in terms of gender equality. I had seen a lot of examples of gender discrimination through my career and I wanted to make sure that we were sending out today’s young women, the leaders for tomorrow, into the world with the best possible chance to succeed in what is still a challenging environment for them.

It is obvious that women are only rarely reaching the top posts. When speaking to younger women who I worked with at the NHS, they frequently said that they to do not want to attain the position of regional director [Barbara was Regional Director of the NHS Executive Board] because they saw the nature of the environment that I was working in and did not like it.

This attitude is common. We did a survey at Murray Edwards for our 60th anniversary of all our alumni. We asked ‘what has been the biggest challenge to your career?’ The results were not about family life – only 22% cited this. Most women had felt that they could accommodate this as they could work out a balance with their partners. The biggest challenge, they said, is an unsupported work environment where women have to do better in order to be promoted. There is also a lot of stereotyping in business and often women’s voices are not heard – this amounts to day-to-day sapping of confidence. I have seen that through my own career.

There is progress in top level gender diversity, but it is mainly in non-executive positions. How can we ensure all positions are genuinely diverse?

There is no one single solution. Having really good targets all the way up the system is important but organisations have still got to work hard to ensure they are achieved. That is why the issue is fundamentally workplace culture. It should be a leadership belief that diversity achieves better decision making and innovation – and these groups should be diverse in experience, race and class, not just gender. To do that you have to believe that people bring different perspectives and that their perspectives are equally valued – that is not currently the case.

Particularly at senior levels, where there are a lot of people who think the same way, they cannot deal with people who come in with a different type of approach to a problem. This is in fact exactly what is needed. If an organisation does not have leaders who show they want that diverse approach, progress cannot be made.

Targets may be set but if women do not feel as though they are genuinely accepted or listened to, they will not move up the system. A recent McKinsey survey shows that although some companies allow flexible working and have facilities such as crèches, in the end it is culture that is stopping change happening and that has got to be there from the top.

You are leading a mentoring scheme for female alumni at Murray Edwards. Could you explain how this is addressing the diversity issue?

The scheme is about making sure women feel supported as they hit cultural barriers in the workplace. Graduates of the college have said that it is between the ages of 25 and 35 that they run into issues. Between these ages, women are often making personal decisions – for example, thinking about their partner or having children or following a job to another continent. But it is also at this point that women start to experience stereotyping.

For example, when a woman first joins a company, she is considered very smart, well liked and has lots of vitality. A couple of jobs in, the competition starts and she begins to be challenged by assumptions of what she can do.

The mentoring scheme is there to help women think through what they need to do to progress in their careers. It also helps them to shape that with the balance of their work and family life. It helps young women to take charge of their own lives and maintain their own confidence about the direction they are going in.

Interview by Henry Ker, Deputy Editor of Governance and Compliance

 

New charity qualification

ICSA has launched a brand new Certificate in Charity Law and Governance

Celebrating governance

Visit the ICSA 125 page for a full list of articles and blogs celebrating 125 years of history of ICSA and looking to the future of governance.

 

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