Philanthropy

Andrew Hill

As part of my investigation into benefit corporations – a new legal corporate form springing up across the US – I asked early adopters a simple question: “Are you a capitalist?”

It put some of them on the spot. Benefit corporations are set up to serve a “triple bottom line” of social, environmental and economic objectives and their backers don’t fit the capitalist stereotype of cigar-chewing plutocrats running smoke-belching industrial behemoths. (Gary Gerber, who runs Californian solar energy company Sun Light & Power, is the first chief executive I’ve interviewed who apologised for coming to find me in his hybrid Toyota Prius because the two electric cars he uses were unavailable.)

I tend to agree with Christopher Meyer and Julia Kirby, whose book Standing on the Sun points out that capitalism is “only a term for what capitalists tend to believe and do”. They suggest that in time “puzzling exceptions to the pursuit [of financial profit maximisation] – corporate social responsibility, venture philanthropy, sustainability – will be recognised to have a logic consistent with capitalism”. Which would mean that even contrarian “reluctant businessmen” like Yvon Chouinard, the surfing and mountaineering founder of Patagonia, the biggest benefit corporation, are capitalists. Read more

Andrew Hill

Real Madrid says it has an estimated 300m fans globally, more than half based in Asia. So I shouldn’t be surprised that it wants to put its name to a $1bn theme park in the United Arab Emirates, closer to that growing fan-base.

Computer-generated image of Real Madrid Resort Island (AFP Photo / Real Madrid)

Even so, I worry that such hubristic brand-building projects – the chief executive of Real Madrid Resort Island describes it as “sportainment”, a term I dearly hope never catches on – could distance football clubs further from their roots. Read more

Andrew Hill

I wish David Cameron and his government would make their minds up about what they think of business. One week they endorse the stripping of titles from disgraced banking barons and allow the flames of the campaign against bonuses to spread; the next, the UK prime minister is out warning about “dangerous rhetoric” that implies “wealth creation is somehow anti-social”.

It is a bit like the club chairman showing football fans a pre-match video of heinous fouls committed by the visiting team’s players and then complaining when the same fans become abusive during the match.

Mr Cameron — and his opposite number Ed Miliband, who made a cack-handed attempt to start separating business into “good” and “bad” sectors in a speech last year — must start to realise that there is nothing to be gained by such confused debate, and much to lose. Read more

Andrew Hill

In its new report, the High Pay Commission makes much of the risk that Britain will slide back to “Victorian levels of pay inequality” if runaway executive pay awards are not somehow reined in.

The parallel with the Victorian era is a resonant one. Even some of the characters in the modern-day saga are Dickensian. The avuncular Vince Cable, Britain’s business secretary and supporter of the thrust of the independent commission’s proposals, is half-Micawber, half-Cheeryble. John Varley, former chief executive of Barclays, seems a stiff-collared braces-wearing throwback to an earlier era in most respects – except one: the commission points out that top pay at his old bank is now 75 times that of the average worker, compared with a ratio of only 14.5 times in 1979.  Read more

Andrew Hill

Even Europhile economists must have pricked up their ears at the offer of £250,000 to the person who comes up with the best plan for winding up the euro. Only the Nobel offers a more valuable bounty to the dismal scientists.

But whatever you think of the goal, is the Wolfson Economics Prize – offered by Lord Wolfson, the youthful, Eurosceptic, Conservative chief executive of Next, the UK retailer – the best way to achieve it? These days, bright business ideas often emerge through collaboration, rather than competition. Read more

Andrew Hill

Andrew Witty, GlaxoSmithKline’s chief executive, won plenty of column inches and airtime on Monday with the UK drug company’s offer to supply developing countries with millions of doses of its vaccine against rotavirus gastroenteritis, at a 95 per cent discount to the western market price.

Your first reaction might well be: if $2.50 a shot still covers GSK’s costs, Mr Witty’s making quite a margin on the $50 he charges the developed world for the drug. Read more

“Strong banks want strong regulation.” That fact has been misunderstood in the wake of the financial crisis, according to Bob Diamond, Barclays chief executive.

“No one has suffered more than those strong banks that have been thrown in the same reputational basket as weak banks”, he said at a panel this morning at the Clinton Global Initiative in New York. Read more

Jasmine Whitbread

The hotel vestibules were buzzing as I arrived – seems President Sarkozy pulled no punches in his address yesterday and people are up for ‘rethinking and redesigning’.  But, I asked my dinner companions, to what extent? If you were going to redesign a global economic system right now, would you tolerate design flaws that leave 70m kids out of school?

But what grabs people’s attention is the Tiger Woods back-story and how well his erstwhile corporate sponsors handled the PR crisis – must say I never expected that as a Davos theme. Read more

John Gapper

I have a review in the FT of Matthew Bishop and Michael Green’s book Philanthrocapitalism, a look at the growth of giving by rich people in recent years. This is how it starts:

This is not the ideal time to publish a book on how very wealthy people – including many bankers and business leaders – can do great things. Read more

John Gapper

Today being National Corporate Philanthropy Day in the US (the first I had heard of it, I have to admit), I went to a gathering of chief executives whose companies give money to good causes or encourage employees to volunteer.

I had a chance to quiz three of the CEOs there – Jim Rohr of PNC Financial Services, Ivan Seidenberg of Verizon and Sidney Taurel of Eli Lilly – about their companies’ involvement in something that, on the face of it, does not benefit shareholders.

Famously, Milton Friedman argued that “the social responsibility of business is to increase its profits” and that a lot of corporate philanthropy was at best misguided, although some could be justified if it served other corporate purposes, such as increasing the loyalty of customers. Read more

One thing that struck me at the Clinton Global Initiative conference last week was how its priorities – cleaning up the environment, eradicating poverty, improving education in developing countries etc – have been adopted seamlessly by many companies.

It is a stark contrast with a few years ago, when the anti-globalisation movement clashed with corporations over their lack of social and environmental standards. Many US corporations, for example, seem notably more enthusiastic than the US government about initiatives to halt global warming.

Michael Porter, the Harvard professor and management guru, turned up at the CGI with a theory to back this notion.

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Angelina_jolie_2 To the Clinton Global Initiative annual philanthropy summit, which is being held a block away from the FT office in New York, to see Angelina Jolie.

Ms Jolie was giving a press conference jointly with Gene Sperling of the Council on Foreign Relations about their initiative to promote education in conflict-hit regions of the world. They had assembled 18 projects that will place 350,000 children in school.

Quite a few others seemed to have had the same idea. As Mr Sperling introduced the event, he was lit by a battery of flashes from the cameras trained on Ms Jolie. "Boy, this happens to me everywhere I go," he remarked.

My impressions were, in the following order:

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