Here are six events I’ve noticed recently. I think there’s a connection, and perhaps even a trend in them. Help me sort out what that connection and trend might be, will you?
1. In mid-October, 100 of the world’s leading authorities on corporate disclosure gathered at Harvard Business School to attend an event called “A Workshop on Integrated Reporting: Frameworks and Action Plan” sponsored by the school’s Business and Environment Initiative. (Very briefly: Integrated reporting means combining traditional financial reporting with non-financial, i.e. Environmental, Social and Governance, issues). You can download a free ebook from the event with papers by about half the participants—it’s excellent.
2. The new Dean of Harvard Business School—who among other things had been a counselor to the MBA Oath program the year before—opened the conference, saying: "It’s a matter of great concern to me that society has lost so much trust in business. It’s something that I think each and every one of us needs to pay great and serious attention to. We live in a time in which business leaders are often trusted even less than politicians."
3. The New Yorker magazine printed an article titled, “What Good is Wall Street? Much of What Investment Bankers Do is Socially Useless,” whose tone is considerably less strident than its title might suggest.
4. October saw the release of the documentary “Inside Job,” a serious (and seriously critical) look at the recent financial crisis by Charles Ferguson, an MIT PhD in political science.
5. The MBA Oath, something that many considered faddish a year ago, seems to be gaining steam.
6. Robert Ketchum, head of FINRA, seems to be advocating for a fiduciary standard of some sort for the brokerage business.
One robin doth not a Spring make; and maybe I’m generally an optimist. But I think there’s something positive going on here.
When I see integrated reporting discussed by 100 people—not just non-financial reporting, but integrated reporting—I think that’s significant.
When I see global business institutions like the Harvard Graduate School of Business Administration making serious trust-talk at the Dean’s level (and Dean Nitin Nohria was appointed in part, I’m sure, because he talks that way), I think that’s significant.
I realize the New Yorker is not Forbes magazine, but when they decide that it’s time to write a serious business article, and to do so with their high standards of journalism, I think that’s significant.
When the financial legislation was passed earlier this year, the fiduciary issue was left out of the mandated laws, and left to the discretion of the SEC. Given the recent election results, I wouldn’t have predicted FINRA’s reaction. That feels significant.
What I think is significant about all this is not that an argument is being won or lost. This strikes me as refreshingly not about good and evil. It’s about a new willingness to take seriously some complex issues of trust. How do we integrate stakeholders? What does trust mean for governance? Can we have intelligent regulations that increase trust?
Most of all, I sense a willingness to bring trust to the business table as a core and valid agenda item—a willingness that I don’t think was there as recently as just 12 months ago.
Is something going on? Or am I on drugs? What do you think?