Ever since the Great Recession began in 2008 there has been an understandable focus on the moral and ethical behaviour of banks and other financial institutions – or the lack of it.
However, there has been a wider discussion rumbling along since May, when a conference was held in London on so-called “inclusive capitalism” where discussions touched on the so-called social contract of common values that tacitly exists in the market , whether it is in finance, business or government.
This theme has since been taken up in comment pieces, including Anthony Hilton in the London E Standard, reflecting on the ways in which businesses can treat customers unfairly, without it being obvious, for example instead of a price increase the manufacturers change the shape of a package or reduce its size to sell less for the same price.
His question was whether the responsibility for such behaviour rested with a company’s board of directors, with its CEO or managers, or with regulators to ensure fair dealing.
More recently Lord Digby Jones weighed into the discussion, arguing that the relationship between government, businesses creating wealth and society was broken. He put forward the notion of a business covenant, like the military covenant, that might set out simply and clearly the obligations of a business to its customers and its community, and what business might expect from government as part of the covenant.
Covenants, while not legally binding involve a clear statement of intent as to how the parties should deal with each other.
Despite the caution “caveat emptor” an economy and society can only function effectively when consumers and clients trust the businesses that supply their goods and services.
While consumers also need to take some responsibility for their purchasing and financing decisions, inclusive capitalism relies on there being a level of confidence that customers will be treated in a moral and ethical manner by those institutions, financial and commercial, that supply them.