Arthur W. Page Society

Changing the World

At the Arthur W. Page Society, we believe business has a responsibility to build social value, not just customer and shareholder value. We also believe that the most senior corporate communications executive of the enterprise, the chief communications officer, is well positioned to help businesses see and seize the opportunity to do just that.

Now, I'm pleased to see that FORTUNE magazine is celebrating the success of companies that are creating social value. FORTUNE's new Change the World list "is meant to shine a spotlight on companies that have made significant progress in addressing major social problems as a part of their core business strategy. It is based on our belief that capitalism should be not just tolerated but celebrated for its power to do good. At a time when governments are flailing, its powers are needed more than ever," according to FORTUNE Editor Alan Murray.

This focus on building value for society – making the world better, if you will – is important for several reasons:

  1. The world needs improving, and, as Murray suggests, no institution is better placed to do it than business. Governments and NGOs are important, too, and the three sectors should work closely and cooperatively, but only business creates its own sustainable funding.
  2. If business fails to create broad societal value, it risks losing its permission to operate. Stakeholders increasingly expect business to act responsibly and to create value for society. Those that do so win public approval.
  3. There is huge opportunity for business in building markets where none currently exist. By lifting people out of poverty or subsistence living, they become consumers (customers for business) and contributors to world growth and prosperity.

The Page Model for Enterprise Communication posits that enterprises should define a corporate character by aligning mission, purpose, values, culture, business model, strategy and brand to create a unique, differentiating identity. The best way to earn trust is to have a trustworthy character – one that stakeholders, including civil society, sees as being aligned with their own interests. The concept of mutuality holds that we trust others who share our interests and values.

Even Jack Welch rejects the idea that the primary responsibility of business is to deliver a profit to shareholders. In the wake of the global financial crisis, he told the The Financial Times, "On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy."

Here's the point: With all due respect to Milton Friedman, business shouldn't be concerned with creating PROFIT, but rather with creating VALUE. It's the value creation that is rewarded with profit, which provides a living for the creator and also the investment capital to enable more value creation. Kudos to FORTUNE for giving some recognition to a few dozen companies that are leading the way in changing the world. For the better.

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