It’s no longer going to be enough for businesses just to deliver shareholder returns in the face of the huge societal pressures we face today.
Delivering this year’s Grigor McLelland lecture at Alliance MBS, Co-op Group CEO Steve Murrells said it was the responsibility of businesses and their CEOs to demonstrate the effect they were having on growing their local communities and helping make them more prosperous.
“The needs of business should chime true with the needs of wider society. Are you treating your suppliers fairly? Are women and minority groups getting fair opportunities to progress and lead? Are you responsible about pay and conditions throughout your business? Are you mineseasuring and reducing the impact of your business on the global climate?”
Heart of communities
Murrells said people were recognising the need for a “more cooperative, cooperating style” of business that sits in the heart of communities. “A year ago we launched an ambition which said ‘stronger Co-op, stronger communities’ which said that you have to be commercially strong, but you also need to ensure you are focusing on local needs and communities, and putting back something rather than taking it away.
“Plcs are working out that they need to think wider in terms of their overall performance. For the Co-op this is a natural thing for us to do, but we are encouraging others to do it. I would encourage all business to do this because I think it is the right thing. What I’m proposing is a far more holistic view of what business is for. That we integrate commercial human endeavour with human values, rather than allow them to be in constant conflict.”
Turnaround
Murrells, who joined the Co-op as head of its food business in 2012 before becoming CEO in 2017, has also witnessed the turnaround of the Co-op itself, the UK’s largest mutual business with more than 4.5 million members. This followed the near collapse of Co-operative Bank which was rescued by a group of US hedge funds in 2013.
As he added: “My observations, having joined the business six years ago, were that we wrongly thought we needed to be more like a plc. We’d forgotten what being a cooperative was all about. I have been quite forceful about getting back to our past, taking what the pioneers used to do 175 years ago but giving it a modern twist. We are a Co-op today where the more value we create the more good we can do.
“It is well documented that we had a difficult and challenging period. But we rescued the Co-op, we rebuilt it and are still rebuilding it, and that gave us permission to set a new agenda to take us back to a different way of doing business.”
Brexit
Meanwhile Murrells said he couldn’t remember a time when there’s been so much uncertainty in our nation – economic, social, and political – and said he was preparing the business for a bumpy Brexit. “The business community is demanding certainty about Brexit, because business always wants certainty. That’s a reasonable expectation but I’m not sure we’re going to get it.
“At the Co-op we’re doing all we can to prepare for a bumpy EU departure. If we really do crash out on 29 March with no deal, it’s hard not to foresee some short term chaos at ports around the country. Availability will become an obvious challenge as we grapple with providing adequate supply to our millions of Co-op members and customers across 8,000 outlets. But you can’t stockpile fresh food, so there’s a limit to how much preparation is possible.”
He added that the Co-op did have more protection than many of its competitors because over the last few years it has made a huge commitment to supporting British farming.
“100% of our Co-op fresh and frozen meat is from British farmers all year round, as well as the meat in our sandwiches, ready meals and pizzas. It took quite an effort to get that supply chain in place two years ago. But now it’s giving a little more certainty for our farmers and our customers.”
*The Grigor McClelland lecture is held in memory of the first Director of Alliance Manchester Business School in 1965. Our lecture was followed by an audience Q&A facilitated by Ismail Erturk, Director for Social Responsibility at AMBS.
Watch the video of the event here: