From shareholder to stakeholder

Unilever has had a reputation for quite some time as a company that takes sustainability seriously. But recent comments from its new chief executive, Paul Polman, suggest that it may be more visionary than previously suspected. Mr Polman, talking to the Financial Times, suggested that he was focused less on delivering shareholder value, and more interested in meeting the needs of the customer. Specifically, “I do not work for the shareholder, to be honest; I work for the consumer, the customer . . . I’m not driven and I don’t drive this business model by driving shareholder value.”

His point is well made - if your customer is happy, it's more than likely your shareholders will end up happy too. Sounds obvious when you put it like that. But an approach that recognises that a business's health, viability and sustainability is predicated upon balancing the needs of all its different stakeholders is more likely to deliver value to shareholders in the long run than a model that focuses on driving quarterly earnings performance may sound like common sense but is in truth a radical and substantial shift for most companies. If Chief Executives could embed this thinking into the way they approach all their decision making, and encourage their employees to do the same, we'd see a massive step forward in terms of the way business interacts with society. Not to mention the fact I'd probably be out of a job...