People, Principles and Profits
Diarrhoea and pneumonia are the biggest cause of death in children worldwide. The recent decision of the leading pharmaceutical company, GlaxoSmithKline (GSK), to radically reduce the cost of vaccinations against these diseases in low-income countries is welcome to all fair-minded people. The same is true of the company's commitment to ensuring that the world's first malaria vaccine, which GSK is close to creating, will be sold in such countries for only just over cost price.
The company's rationale for taking these decisions bears consideration. In a recent article in The Times, GSK's CEO Andrew Witty admits to having a vested interest in immunisation because of the profit it delivers. But profit, he points out, is important for three reasons: it makes a healthy return to the company's shareholders; delivers sustainable financial growth to invest in research into new drugs and vaccines; and provides jobs for its workers. To make and sustain such profits, Witty contends, the company's operations need to be 'in step with society and its expectations'.
Two aspects of this are particularly striking. First is the emphasis on achieving a 'healthy' return and 'sustainable' financial growth. It stands in stark contrast to the 'maximisation' of returns and growth that is often taken to be the purpose of business, by business proponents and detractors alike.
Second is the mention of things that are so fundamental to the role of business in society that they only need spelling out in a culture that, while deeply consumerist, is also deeply cynical and suspicious towards business. So, we have the director of a major company feeling the need to point out - at greater length in his article - that the profitability of his company allows beneficial goods to be provided, jobs to be created; and that for such profitability to be maintained it must fulfil what is expected of them by the communities in which they operate.
These things have always held true of trusted companies. They act as a reminder that we live in a moral universe in which the spheres of society - including business - are called to serve the common good. Because of this, no commercial enterprise can expect to be unaffected in the long-term by its lack of ethical integrity - a lesson some banks have recently discovered to their cost. Required of companies are three things highlighted by an ancient Hebrew prophet: justice, kindness and humility (Micah 6.8).
Peter Heslam
Transforming Business, University of Cambridge
Links
The article by Andrew Witty, CEO of GlaxoSmithKline (GSK), was published in The Times of 06-06-11 (p. 20).
For an interview with Andrew Witty published in The Sunday Times on 26-07-09, click here.
The World Health Organization operates an Initiative for Vaccine Research (IVR), the mission of which is 'to guide, provide vision, enable, support, and facilitate the development, clinical evaluation and world-wide access to safe, effective and affordable vaccines against infectious diseases of public health importance, especially in developing countries.'
One of the companies absorbed into GSK is Allen & Hanburys, which had strong Quaker roots going back to its foundation as Plough Court Pharmacy in 1715. For a history of A&H, see Through a City Archway: The Story of Allen & Hanburys, by Desmond Chapman-Huston and Ernest Cripps (London: John Murray, 1954). The company was incorporated into Glaxo Laboratories in 1958.
For two influential works on the purpose of business, see Charles Handy's article published in the Harvard Business Review (December 2002) entitled 'What is Business For?', available here; and Peter Drucker's The Concept of the Corporation (New York: John Day, 1946).
For explicitly Christian perspectives on the role and purpose of business, see the following books:
Rethinking the Purpose of Business: Interdisciplinary Essays from the Catholic Social Tradition, edited by S.A. Cortright and Michael Naughton (Notre Dame, IN: Notre Dame Press, 2002).
The Church on Capitalism: Theology and the Market, by Eve Poole (London: Palgrave Macmillan, 2010).
Why Business Matters to God, by Jeff Van Duzer (Downers Grove, IL: IVP Academic, 2010).
Business for the Common Good: A Christian Vision for the Marketplace, by Kenman Wong & Scott Rae (Downers Grove, IL: IVP Academic, 2011).
It is very encouraging to see Christianity engaging constructively on business matters. The responsibilities of businesses to society are an emerging theme of proposals being developed in Brussels, in response to the financial crisis, relating to the governance of European companies. Also, in the UK, most leading institutional investors have now signed up for a Stewardship Code. Stewardship is a term which Christians and institutional investors now share in common - there are of course differences of definition but the Code is an evolving one and the direction of travel is encouraging, although it is still early days.
Date:
2011-06-10 09:20:58
Author:
Guy Jubb