Words alone are not enough

David Wighton: Business Editor’s Commentary

Davos has an image problem. Outside the international economic elite, it is widely seen as a glitzy talking shop where corporate bosses can spend a few days posturing about improving the state of the world before going straight back to improving the state of their profits.
For many outside observers, the financial crisis was the last straw. Investment bank bosses had spent years talking about corporate social responsibility at Davos, only for their employees to act with such extraordinary social irresponsibility that they brought the financial world to its knees.
Some Davos insiders believe this illustrates the more general gulf between corporate rhetoric and corporate behaviour.
As Maurice Levy, head of the media giant Publicis, said yesterday, there often seems to be a big gap between what companies do and what they say about ethics and the environment in their annual reports. Enraged by the financial crisis, the public is now demanding change and Mr Levy warned that if companies did not respond, they would pay a heavy price. He was referring particularly to companies’ commitment to sustainability. But many of his fellow chief executives believe it extends to companies’ wider role in society.

To be fair, many companies are taking their responsibilities seriously and are challenging the Anglo-Saxon orthodoxy about the pursuit of shareholder value. Many chief executives would agree with Unilever’s Paul Polman about the need to resist pressure from short-term shareholders, even if they would not have the nerve to express it so forcefully.
Critics of Davos claim that most of the promises made here are never kept. Insiders admit there is some truth to this, which is why many of the Davos initiatives — such as the sustainability programme in which Unilever is involved — are now focused on turning words into actions.
That is essential not only for the future of Davos but for public confidence in business as a whole.