Sir Richard Branson: Business should focus more on social problems

So how is this put in to practice by his Virgin corporation?

This for example, was the email sent on 16th March 2009, to Virgin Unite.

Hello Virgin Team,

I’d submitted several suggestions to your website with no response and this was a follow to explain our work.

At the Ukrainian lunch in Davos, Richard Branson gave a talk suggesting that business should focus more on social problems.

http://pinchukfund.org/en/news/archive/2009/01/29/986.html

This is what we’ve been doing in Ukraine for 7 years to reach the point that our efforts have persuaded government to adopt changes to childcare policy. We’re a small business rendering 100% profit to do something about the plight of orphans and street children in Ukraine.

One of my submitted suggestions was about raising funds to help the founder of a charity Happy Child who support sick and disabled children in Ukraine. She herself is disabled and in need of surgery.

Another suggestion is the proposal to create 10 models of excellence for the rehab centres Ukraine’s government agreed to last year. Little has been done since the announcement.

If the Ukraine lunch speech was an indication of intent to apply this in Ukraine, then we’re able to show the way.

Regards,

Jeff Mowatt

The meeting I refer to, known as the Davos Ukrainian Lunch had some interesting guests.

“42nd President of the United States Bill Clinton; former  Prime-Minister Of Great Britain Tony Blair; businessman and philanthropist Richard Branson; Laureate of 2006 Nobel Peace Prize Muhammad Yunus; actor and founder of the One Foundation Jet Li, founder of the Bill and Melinda Gates Foundation Bill Gates and also Victor Pinchuk, the Roundtable organiser, public leader and businessman. Matthew Bishop, Chief Business Editor of The Economist and co-author of the book “Philanthrocapitalism: How the Rich Can Save the World” acted as a moderator of the discussion.”

Clinton had been the original recipient of the P-CED white paper in 1996 and is reputed to have a mind like a steel trap. It forgets nothing.

Muhammad Yunus had by then published his book on ‘Creating a World Without Poverty’ describing the Social Business model as the future of capitalism.,

Bill Gates had described his vision of Creative Capitalism at Davos the previous year.

Around the same time as the 2008 Ukrainian lunch it has been Albert Pavlov of Happy Child who’d said It’s not possible to keep silent, on discovery of a child in an advance state of starvation in Kalinovka.  The location featured in Kate Blewett’s recent documentary on Ukraine’s Forgotten Children.

“Capitalism is the only economic system that really works”, he underlined, saying that the downside of the capitalist system is accumulation of great wealth in hands of relatively small number of people. “Not all of these people use their assets to create new jobs and new opportunities.” Branson stated.

This is precisely why social role of business, as said by Richard Branson, is so important in modern world. “A modern company should focus not only on making money, but also on solving social problems and investing in protection of environment.” he said reminding the participants about his own initiative to establish an award for development of know-how to reduce emissions

What Sir Richard said at Davos, was a point made   in our 2003 proposal for Crimea’s Tatars:

“Traditional capitalism results in profits for the few people who own an enterprise. Over time, this often results in enormous amounts of money for a few people. This is the appeal of capitalism: the possibility of gaining great personal wealth, becoming rich. The problem is that money is not an unlimited resource. If money piles up in the hands of a few people, this must come at the expense of others who will then have less, or nothing at all. There is no other possibility. This is the basic flaw and weakness of capitalism, and was the central point of the 1996 paper.”

We were still in Ukraine, where our ‘Marshall Plan’ had set out a national scale strategy for business with social objectives, saying:

“An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

 That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise.”

Of those attending the Ukrainian Lunch, the odd one out perhaps was the host, who’d been identified by Kyiv Post as one of Ukraine’s Scrooges

He’d also been identified in the research describing Death Camps, For Children, which had said:

“Excuses won’t work, particularly in light of a handful of oligarchs in Ukraine having been allowed to loot Ukraine’s economy for tens of billions of dollars. I point specifically to Akhmetov, Pinchuk, Poroshenko, and Kuchma, and this is certainly not an exhaustive list. These people can single-handedly finance 100% of all that will ever be needed to save Ukraine’s orphans. None of them evidently bother to think past their bank accounts, and seem to have at least tacit blessings at this point from the new regime to keep their loot while no one wants to consider Ukraine’s death camps, and the widespread poverty that produced them..”

Earlier this year, we weren’t the only ones to draw attention to the 9 billion Euros spent on Euro 2012 and what it would cost to place all children in loving family homes.  In 2006 we’d said:

“We see a staggering array of social problems arising directly from poverty, including but not limited to tens of thousands of children in orphanages or other state care; crime; disrespect for civil government because government cannot be felt or seen as civil for anyone left to suffer in poverty; young people prostituting themselves on the street; drug abuse to alleviate the aches and pains of the suffering that arises from poverty and misery; HIV/AIDS spreading like a plague amidst prostitution, unprotected sex, and drug abuse; more children being born into this mix and ending up in state care at further cost to the state; criminals coming from poverty backgrounds, ending up as bandits, returning to communities after prison, with few options except further criminal activity. These are all part and parcel of the vicious negative cycle of poverty, and this threatens to destroy Ukraine, if Ukraine is defined in terms of people rather than mere geographic boundaries. Overall, population is steadily declining; families have not sufficient confidence in tomorrow to reproduce more than 1.2 children on average per couple.”

Last week The Economist informed us that Sir Richard was about to create a better capitalism and it was interesting to note this sentence in particular:

“There were too few candidates from the business world of sufficiently unimpeachable character, it seems, and, more positively, some members of the B Team are likely to be relatively young.”

The B team has a powerful adversary. We still have a problem and there’s still no-one to go to.

2014 Update

Paul Polman of Unilever writes of where our moral compass meets the bottom line. Again It’s a familiar argument.

Two years on and there’s an uprising again in Ukraine. I reflect on what was said in Crimea back in 2003 when we drew attention to the plight of the repatriated Tatars:

“Once a nation or government puts people in the position of defending their own lives, or that of family and friends, and they all will die if they do nothing about it, at that point all laws, social contracts and covenants end. Laws, social contracts and covenants define civilization. Without them, there is no civilization at all, there is only the law of the jungle: kill, or be killed. This is where we started, tens of thousands of years ago.

By leaving people in poverty, at risk of their lives due to lack of basic living essentials, we have stepped across the boundary of civilization. We have conceded that these people do not matter, are not important. Allowing them to starve to death, freeze to death, die from deprivation, or simply shooting them, is in the end exactly the same thing. Inflicting or allowing poverty on a group of people or an entire country is a formula for disaster.”

Back to Davos, and the usual suspects: