Programme Updates

The Difficulties in Doing the Right Thing – Discussion Summary

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This discussion took place in March 2022 as part of the
Ahead of the Curves series, in partnership with Stifel Europe. This phase of the programme focuses on the expectation placed on businesses to do and be seen to be doing ‘The Right Thing’.  

You can also listen to the podcast interviews which provoked
this discussion here.


It seems only yesterday when the purpose of a business was to find a customer and keep shareholders happy with the results. And that was it. How times have changed. Now it seems any business must have an opinion (even a moral “active stance”) on Ukraine, climate change, sexual politics, Brexit, animal welfare, child labour…The list is almost infinite.

This is no mere reductio ad absurdum. What a company – and not just Speedo – thinks about, for example, Trans Women professional swimmers can win or lose it custom if it comes up with the wrong answer when asked. And, of course, there is no universally accepted right answer to this particular dilemma. However, businesses have no choice but to attempt to signal virtue.

Corporations have become “closer” – even if this remains largely a faux intimacy –  to their customers. And vice versa. There is where the Trust debate comes in.  In the same way that you’d be unlikely to give houseroom to an acquaintance or a friend with views you find unsympathetic, so you will not associate with a business with whom you disagree – you decline to give them your custom.

Corporates now routinely self-regulate beyond government regulation which, of course, includes the question of Russian sanctions.  They are intensely wary of being caught out in a hail of damaging social media criticism. Corporate virtue has become highly important but working out the path to virtue is often far from straightforward. So, with huge businesses like McDonalds, Renault and Danone fighting front page news battles about the ethics of staying or leaving their Russian markets, ‘Doing The Right Thing’ was the subject of the latest in the Jericho/Stifel: Ahead of the Curves discussion series.

Eithne O’Leary opened the conversation admitting: “This is a huge canvas for discussion. Suddenly with Ukraine these subjects have been thrown into sharp relief. Business is being put on the spot.  I’m curious when considering the response to Russia’s invasion that I wonder how their equivalents behaved during the 1930s. Did UK concert halls ban Bach and Wagner?

“In a UK context, the institutions of state have been giving cause for concern with some of their behaviours recently – the royal family, prime minister, the BBC on the verge of being defunded and the overwhelming of the NHS – it’s hard to get excited about the outlook. Is it rational to expect business to step into that vacuum and provide the leadership on top of all the other things it is supposed to be doing?”

The economist Vicky Pryce took part as the co-founder of GoodCorporation a company set up to promote corporate social responsibility.” Behaving ethically is rising up the agenda for good reputational and business reasons but also because of regulation. The consultancy tries to ensure that board decisions on expected norms are followed across the organisation and as many firms we work for in fact work across the world , it is important to check how they incorporate ethics into their agendas wherever they operate. It makes good business sense too of course. Everything that happens has a business impact that organisations have to be aware of if they are to retain the licence to operate, and to do so profitably.

“Shareholder value can be better sustained in the long term if firms do the right thing in their day-to-day operations. The investment pays off. But how do you measure any of the ways that the company behaves? There are some general basic CSR norms that firms tend to sign up to, including of course on the environment, but additionally GoodCorporation tries to devise metrics that are specific to an organisation and that take account of its distinctive social and environmental impact. In general, there is concern that we see too much box ticking by firms that achieves very little but there are rays of hope that organisations are now taking their wider responsibilities much more seriously while also realising that this is the best way to ensure long term sustainability for the business.”

Sue Garrard who has long experience in this area having been Paul Polman’s right hand woman in his sustainability push at Unilever. She said: “No matter how ethical you want to be as a CEO, the only thing that shareholders understand is the business case. That means that operating for the longer term good is very difficult. If your shareholder base is likely to beat something out of you then it is impossible to manage that trade off. If I was still at Unilever – for whom the Russian market is small – the operational issues were already a nightmare:  the level of corruption and systemic issues are ridiculous. However, it remains true that they’re selling everyday essentials and those civilians in Russia who don’t want this war will suffer. But the trend is there and you simply cannot swim against it.”

Sue was also concerned what the Ukraine crisis and need for energy security might mean for the race to Net Zero in the energy world. “The whole ESG agenda could be put back a long way. What we need to ask is ‘How do you use this as an accelerant towards a low carbon economy?’ Government and everyone will have to invest, we will all feel some pain here so why not do so in a way that creates jobs, weans us off of fossil fuels, set timelines for North Sea oil and gas, don’t play into the return of fracking, for example.

Hannah Leach said that she runs a non-profit organization called Venture ESG which is trying to get venture capitals funds to think more about ESG. She said there is already trickle down to the early-stage companies with which she’s involved. “EU regulation is coming down the line and when the UK version rolls out many companies will be forced to do their stuff, in the next 5-10 years we will see many coming around and facing issues that they need to.”

Lesley Smith who has recently stepped down as VP for Corporate Comms and Public Affairs at the fintech Revolut said; “In financial services there are many who have stepped up to the plate and supported new ways of doing business. The balance between ethics and pragmatism is always there. I’ve recently left a business where both the workforce and customer base were very young and so there was an alignment between their views which is probably atypical of most shareholder only views.

The risk function in fintechs like Revolut is large and powerful, and is a strong lever in how the business is run and has a direct relationship with the board. These days morality and the interests of shareholders just have to be aligned.”

Patience Wheatcroft wondered how objective criteria in a world awash with greenwash. “No company will succeed by branding itself unethical, it is a subjective feast. However, I think a reasonable question to ask, would Putin have stayed in power if so many global companies hadn’t gone into Russia and sustained his regime and improved the lives of the people? Was that the right decision or was it for profit motive? We all knew that origins of Russian companies were founded on ill-gotten gains at the expense of the Russian people. What is ethical? It does tend to vary. The move to sustainability has a cost and do investors really want to bear that? In theory they do.”

The problem of knowing corporate virtue when you see it and being able to detect it reverse, vice, can be very hard. Madison Kominski is an analyst at Stifel “You constantly apply sense checks. There is a multitude of providers of ESG data and they are frequently not compatible with each other. A lot of the data is simply extracted from annual reports. We have to consider if a company has a real ESG proposition or if they are trying to pretend that they do. But concerns are very real. Our lens is often what are the companies that we want to do business with and who will investors want to invest in longer term? It’s a key driving factor for us now.”

Jane McCormick agreed that strong, audited data is going to be critical if the relatively immature ESG industry is going to grow up. “Auditors will audit and provide assurance over numbers which are presented in relation to ESG. The problem they have is having those numbers in a consistent format and as such it’s an area of big risk. Effort is going into to trying to get consistent and properly auditable data – the big ESG question is how far down the supply chain do you look?

“Business is a collective enterprise, the success of which depends on all of its stakeholders who include the capital providers, the employees, the customers. But it also includes the wider society in which it operates and if ultimately it does not create benefit there it will suffer. Business has failed to spend enough time engaging with wider society and finding out what the wishes are. If business can pivot into taking this into account, it would make the decision making more coherent and we wouldn’t need to ESG as an add on.”

Angie Hobbs gave a professional philosopher’s view: ”What is my advice when asked about ethical compromises? I suggest a two-step process. You can start by taking a consequentialist approach and asking whether it is a good thing for the planet that my organization exists – are we contributing a product or service which is beneficial to the wider community – local, national or global?  If yes, we are doing well and it’s a good thing we are here, and some ethical compromises are O.K. if not making them means we would go out of business. For example, we would love to pay more than the minimum wage but if we did we would go out of business and the beneficial product or service would be lost. But at least we are paying the minimum wage and not doing anything wicked or illegal. According to the consequentialist approach, that is a legitimate ethical compromise.

However, the second stage is to look at the matter from a deontological perspective, a perspective of rights and duties, and check that the ethical compromise does not fall foul of this.  Because there are some acts which are so wrong and wicked that they simply should not happen, even if avoiding them means your organisation goes bust. You have a duty not to do them. For instance, suppose it is not just a case of not paying people as much as you would like, but actually being engaged in modern day slavery. That has to stop, not just legally but also morally, whatever the consequences for your organisation. Not every organisation should survive.

I wanted to add that I could not agree more with Eithne that we need good ethical leadership where the board and CEO work out a clear statement of values and purpose and when difficult ethical situations they work together to listen, consult and decide what to do in accordance with those values.”

One of the things that brought this conversation about was whether we are asking too much of businesses right now? Encouraging it to stray into the world of politics and attempt to set the world to rights. Eithne O’Leary wondered what kind of a moral example business and society was currently being set by those whose trade is politics. “In a business sense I’d have been fired if I’d have done any of the things that politicians have done over the past year. I’m not going to stand in defence of financial services per se  but we are all making decisions that are imperfect based on information we have to do the least bad thing. I think we should reflect on is what withdrawing from Russia leaves citizens there thinking of the west and how much it drives Russia towards China – splitting the world in two.”

Wendy Jepshon added: “It’s so difficult in organisations when ethics is done on the side. At my new business Let’s think, we decided we wanted to go for B-Corp certification. We are working towards it and it changes your mindset as you begin setting up. It is hard if you haven’t been in that mode and haven’t had any experience of it before.”

Sanjay Patnaik suggested; “I think business here is acting now due to pressure from the government, consumers and the operational issues we’ve been discussing. We forget how crucial business can be in sustaining autocratic regimes. If Western companies and governments had not invested so much in Russia, bought so many of its energy resources and allowed its oligarchs to enjoy a Western lifestyle while supporting an autocratic regime at home, Russia might not have had all the resources needed for the current war.

On the ESG front: the issue with ESG is that it’s too vague, and so often times companies hire one “ESG” person to do window dressing. However, for ESG to actually mean something, companies would need to be incorporating these values all the way into their core business strategy. If you have one ESG person on your team, but act in a way that deteriorates your relationship with the communities you’re working in, then it will be detrimental for your business.

Finally, on business ethics: I personally don’t think you can teach business ethics. It’s often taught in a way that is too abstract and removed from real life. At the end of the day, it comes down to the personal values of each manager”.

Eithne reminded us that anyone who thinks ethical decisions are a simple black and white affair is kidding themselves. “There are a range of ages in this meeting and as you move through an organization it’s rare that you get a black and white decision on which all is agreed. Leaders do their best in an imperfect world.  It isn’t possible to be quite so definite about things and that most people set out to do the right thing is true but the consequences are difficult to predict going forward.”

It was also pointed out by several speakers that technically Section 172 of the Companies Act gives little protection if directors try to trade off the benefits of shareholders over other stakeholders including Mother Earth. As Sue Garrard pointed out: “As a CFO when you look at delivery in a quarter, it’s a handful of days but many investment decisions require a timeframe of years. The long-term arc of how you balance benefit to all stakeholders is exceptionally difficult to execute at the same time as delivering short term. Regulation cannot supplement ethics and the tradeoffs companies are having to make now are impossible within the current set of constraints.”

Finally, Matthew Gwyther wondered whether the part that business plays in Western liberal democracy and free markets wasn’t worth a small shout. “After all, in Ukraine at the moment the people have seen the possibility of the life that they liked a lot more than what was offered by Russia. I think business should remember that what it’s done post 1991 is a good thing and can be proud of. Maybe one should quietly and modestly accentuate the positive here.”


The discussion was attended by:

  • Kate Birkinshaw, Manager, GoodCorporation
  • Sue Garrard, Senior Associate, Cambridge Institute for Sustainability Leadership
  • Matthew Gwyther, Partner, Jericho Chambers
  • Angie Hobbs, Professor of the Public Understanding of Philosophy, University of Sheffield
  • Wendy Jephson, Founder, LetsThink
  • Denise Kingsmill, Former Chair, Monzo
  • Madison Kominski, Investment Banking Analyst, Stifel
  • Hannah Leach, Partner, Houghton Street Ventures
  • Jane McCormick former Head of Global Tax KPMG
  • Eithne O’Leary, President, Stifel Europe
  • Sanjay Patnaik, Director, Center on Regulation and Markets (CRM)
  • Vicky Pryce, Economist and Business Consultant, Board Member, Cebr
  • Lesley Smith, Vice President of Corporate Communications & Public Affairs, Revolut
  • Baroness Wheatcroft, Member House of Lords

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