A name and an organisation to be remembered.
Dick Hubbard is Managing Director of Hubbard Foods Ltd. and Chairperson of
a new organisation called "New Zealand Businesses for Social
Responsibility" (BSR). The following article is based on a public address
Hubbard gave in Gisborne on 8 July 1998.
BSR produces a quarterly newsletter and membership is open to any
for-profit businesses,including public and private corporations, SOEs and
sole traders. BSR can be contacted through email to:
What is the function of business?
Dick Hubbard, or just "Dick" as he prefers to be known by employees, opened
his presentation by contraposing Roger Kerr's axiom, "The business of
businesses is business", with his own, that "The business of businesses is
more than business".
Kerr has gone so far as to suggest that any social contribution a business
makes is actually theft from the shareholders. The claim was made that a
significant shift in power has recently occurred which has transferred
economic responsibility from democratically elected governments to
financial entities, notably large corporations and their management
Hubbard argues that with the new economic power being exercised over local
communities and national economies comes a greater social
Of the top 100 economies in the world, 50 are companies, rather than
Many corporations now have a GDP in excess of New Zealand's. Of the 191
countries in the world in 1995 only 21 had economies which exceeded that of
the largest corporation, Mitsubishi of Japan. Mitsubishi had sales of
$184.5 billion, more than the GDP of Indonesia, the world's fourth most
Hubbard uses the proposition of 'Stakeholder Theory' in business to argue
that a company must have more to its purpose and/or highest priority than
the traditional role of making money for the owners (read shareholders -
which includes, in Hubbard's philosophy, the bank or financial institutions
backing an enterprise).
Hubbard makes a distinction between legal and moral ownership of a company.
Using the example of a young farmer being interviewed on TV who pointed out
that even though he had a piece of paper giving him title and control over
his farm to do as he wished with it, he was also a steward of the land,
responsible for its care and protection for future generations.
Moral ownership and leadership tries to take into consideration all the
ramifications of decisions, rather than just the financial implications.
A paradigm shift is evident in the wider culture to a more 'values based'
lifestyle and decision making process. This will be reflected in business,
both as a reflection of the demographics - the baby-boomers starting to
navel gaze and question the meaning of 'success' - and as a backlash against
the excesses and falsity of the 1980's materialistic mind-set.
A triple bottom line must exist for 'sustainable' businesses - financial,
social and physical (natural). Each environment is equally important and
success in each must become a priority for the stakeholders concerned.
Stakeholders in any enterprise include the often, but not always,
conflicting interests of shareholders, staff, suppliers, customers,
community impacted, and the natural environment.
The Soul of a Business
This approach will include a focus on a 'corporate soul' which makes
management decisions from the heart as well as the head - what Hubbard
calls below and above the line. Above the line decisions are win-win
situations for the business and the benefactor. These include most
transactions and also marketing tools like sponsorship and public donations
which engage a sympathetic inclination from morally minded potential
customers. Below the line decisions are those where the benefactors may not
be in a position to repay the offering - and where it may be to the
detriment of company profits or efficiency.
Hubbard gives the example of employing a man who was unemployed for seven
years, a man whom prospective employers were turning away simply because he
been out of work so long that they presumed there must be something wrong
Most companies seem to require employees to be schizophrenic, leaving their
brain at the door when they come to work, then going home to be a family
member and so on. Hubbard tries to keep up with family life for his
employees, seeing this as an important sphere of their well-being.
Open management principles of regular catch-up meetings and suggestion times
("accompanied by 'a big feed") are included in the company priorities.
Another example which crossed from below to above the line when the media
found out, was taking his work-force of 90 people to Samoa for a long
weekend. This was not just a holiday in the sun and surf as a reward for
good work and loyalty, but rather the entrepreneur saw it as a way of
recognising the Pacific Island communities that most of his staff come from
in Mangere and the value of their culture and place of origin.
As a result he has had, Pacific Island community leaders contact him
thanking the company's efforts in raising the mana of Samoan people and
contrasting its attitude with some of the prejudice against Samoan workers
in New Zealand. This was a personalised, and culturally appropriate way of
building a family feeling
What is Businesses for Social Responsibility (NZ)?
The new organisation, BSR, is being launched with the intention of opening
up the debate on these issues, showing businesses options for taking the
initiative in responsible management and pointing out some of the dangers
and pitfalls of becoming 'socially responsible'.
Hubbard is quick to give examples of businesses overseas who take a high
moral position and are subsequently under far more scrutiny and
vulnerability than others who may make far worse decisions and have little
He also wants to limit the organisation to corporate entities rather than
including individual members as previous attempts in the United States
attracted anti-business interests who curtailed the debate and scared-off
businesses who were genuinely interested in working through the issues and
needed a safe forum to do so.
He aims to make information available to interested parties, with an
emphasis on the need to work closely between the non-profit sector,
business and government. No strict criteria for joining seem to be applied.
The group seems more interested in discussing ideas than using the
name as a marketing gimmick. This will be an important point to monitor as
the tokenism evident in the 'greenwashing' phenomenon could potentially
discredit the organisation unless it has a publicised process for approval
or certification and the attendant strategies of review and development.
A Time for Change
Hubbard claims BSR is an idea whose time has come. Many would argue its
time was long ago, but BSR should be commended and supported by consumers
and all 'stakeholders' as at least an initial step in the right direction
for corporate accountability in an age of apparent irresponsibility and
It will be important for BSR to consider how it can interact with
non-business interests, how the democratic process could be applied to the
business sector, and how it can further refine over time key policies such
as employment goals, entry and exit criteria and the development of
long-term vision and strategies.