Tomorrow’s Capitalist

Alan Murray, CEO of Fortune, is a fine journalist and an accomplished business leader. But he’s also an effective advocate for responsible capitalism. His book, Tomorrow’s Capitalist: My Search for the Soul of Business (released today), outlines his journey, which began with the Fortune-sponsored CEO visit with Pope Francis in 2016.

In my interview with Alan in a Page Conversation last week, he agreed with my assessment. “You said I was an advocate; I am an advocate. I didn’t go into this as an advocate; I went into this as a journalist. I just, over the course of a decade, kept hearing CEOs talk about their jobs in a very different way than they ever had before, and then start to act differently … about their responsibilities to society than they did 10 years ago.”

Alan grants that the skeptics have some points. But clearly, from his point of view, businesses are fundamentally changing the way they think about their responsibilities to society and taking concrete actions to create societal value. He acknowledges, for example, that in the short-term, there can be negative tradeoffs between purpose and profits, but “over the long term, those tradeoffs tend to diminish and then go away.”

He sees businesses making key commitments in several important areas.

“Climate is the most obvious example,” he told me. “In the last two years, the percentage of Fortune 500 companies who either have made net zero commitments or plan to make net zero commitments … in our research is now a majority of Fortune 500 companies.” He mentioned General Motors and Moller-Maersk as outstanding examples of profound commitments to change their entire business models. In today’s CEO Daily, he cites an IBM study with more evidence.

A second example is the business commitment to new ways of working. In the book, he notes the massive changes underway in response to “an empowered workforce” and the global pandemic, and also addresses the commitment many businesses are making to what he calls “the upskill revolution” to address the growing reality that many mundane and repetitive tasks are being replaced by AI-driven machines. He cites many companies that are responding with reskilling training programs.

Third, he notes the growing commitment to embrace diversity, citing, among others, the OneTen initiative, which Merck Executive Chairman described in detail at the Page Spring Seminar. In the spirit of “what gets measured gets managed,” he described a Fortune partnership with Refinitiv. He told me, “After the George Floyd [murder] I reached out to the CEO of Refinitiv and said, ‘This is wrong; we should change this. Companies should be willing to disclose their EEOC data so their employees and investors and everyone else can hold them accountable.’” Although the Fortune-Refinitiv partnership died when Refinitiv was purchased, Alan believes the SEC will soon require this.

Alan speaks compellingly of the increasing value of intangibles, including intellectual property, software and brand, which today represent more than 85% of public company value. He noted that “All these things are not tied to physical stuff or financial capital. They’re tied to people. So, what we’re seeing is the logical result of the capitalist system moving from capital to people.” He believes this is leading to a strong commitment to human values, and cites the subtitle of his book, which references the soul of business.

I noted that the focus on intangible value and people is a compelling argument for the elevation of the role of the chief communication officer to a central place in the strategic deliberations of every business. Our responsibility for corporate reputation and liaison to stakeholders places us at the center of stakeholder capitalism. For more on how to make this role come to life, watch for the new Page CCO Guide to Stakeholder Capitalism, coming soon.