“I'm not saying any of these things completely transformed some of these lives in the same way, like a new medicine would,” says Professor Edmans. “But what this did is make everyday chores, like washing the dishes, just a little bit easier for ordinary members of society.”
“And workers benefited as well; headcount grew by 50%, if they were empowered, a lot of innovation bubbled up from the ground below. And clearly all the good performance I mentioned, was not due to Bart, it was due to all his employees, but they were paid well and also the environment benefited.”
“If we think about the company's value being represented by a pie, we often think about how is that pie split between shareholders and maybe executives and stakeholders, customers, employees and the environment, and we often think about a responsible business as one where maybe the CEO pays herself less or investors don't engage in share buybacks.”
“What's more important about responsible business is the idea of growing the pie to generate, more value for both investors and society. So investors actually generating high returns that need not be irresponsible. When we think about the division of the pie, that is important, but the size of the pie is even more critical.”
Responsibility on the march
Ioannis Ioannou, LBS Associate Professor of Strategy and Entrepreneurship, has been researching how responsible business practices are becoming more widespread.
Between 2012 and 2017 he looked at whether responsible governance and best practices are becoming more common and firms are converging on a consensus. He wants to answer the question of whether responsible business is something that can establish a competitive advantage, or is it going to become best practice that is going to become a necessary condition for survival.
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