Yesterday the Chairman of AMP David Murray stood down at the request of major shareholders. David Murray was the former Managing Director of the Commonwealth Bank. On his retirement from the bank he became a respected go to leader. His reputation was unimpeded so what went wrong?
In simple terms he failed to understand a company has to have a greater ambition than to make money for its shareholders. Shareholders make it clear they want their directors to make money for them. This is something he concentrated his efforts upon so what went wrong? David Murray lost sight of the fact that a business also has a social responsibility. It also has an environmental responsibility all of equal weight to profit.
It is a pity for David Murray he did not pay more attention to the work of John Ellington’ theory of the Triple bottom line: People, Planet and Profit. It has been taught for years in business schools. The shareholders should not have been surprised David Murray decided governance for profit was his aim as he was a known skeptic of Global Warming and Social responsibility.
This is not to play the man. I do not set out to demonise him. He is simply a man of his time. He is out of time. A director must keep up. A nation must keep up. Our nation is demonstrating an inability to keep up. It has announced plans of change to the funding of university courses. If a student chooses to study STEM subjects (science, technology, engineering and mathematics ) the courses will be cheaper. If the student chooses to study the humanities, (philosophy, literature, history, politics, economics, sociology) the course will be more expensive. Worse, if the student fails to pass the first year of study they will lose federal funding.
Many successful people are able to point to failure in tertiary study being the catalyst for them to choose a more appropriate area of study. From their “failure” they became better – more dedicated students. It should surprise no one ones youth is not a good indicator of how a person might grow through life. Sometimes failure is the wake up call an individual needs to reassess their goals. Cutting funding creates an unwanted economic barrier. It is short sighted.
It is short sighted to direct students into STEM subjects because universities are not training establishments whose job it is to train work ready people. Their job is to educate people in the higher skills of learning, synthesis, critical thinking, and evaluation. These are all things I have written about previously however they do need to be reinforced because when it comes to evaluation of education and company performance the bottom line is multidimensional.
To return to a hobbyhorse of mine it is important companies look to their social responsibility. I have a total dislike of the lack of social responsibility big tech show.
Here are some examples.
If you want to know something, anything, the common thing to do today is to Google an answer. The smallest state in the world is something Google knows. The last match played between football teams – when these two teams last met the scores were identical – Google throws up the answers in a fraction of a second. We have come to learn Google will tell you the answer. The last time Google paid tax in your country is the only one that stumps it.
One thing it can tell you with ease is , Jeff Bezos’s wealth increased by $637 billion in the first six months of the Covid 19 pandemic. That is because he is the largest shareholder of Amazon. Amazon in the wink of an eye is the largest distributor of products in the world. It’s largest competitions Alibaba – ebay and Tencent are not minnows either. Because normal shopping is disturbed people are spending more time online and these businesses are now the preferred locations search for goods they want.
In their company we find Apple, Facebook. These companies may pay a modicum of tax but here in Australia we have a Who’s Who of companies each with turnover in excess of AU$1b that pay No Tax. A company of the size of these companies avoiding tax is not living up to its social responsibility. They argue they remain within the law in country out of country across the globe, in each they escape the taxman’s grasp. Many of these companies have greater wealth than sovereign nations. The same nations unable to tax them are powerless. The only thing that can stop them is shareholder pressure. It should not be feint hope shareholders revolt at their inaction to accept they operate with a social responsibility to their countrymen. The time has come for shareholders to redirect their boards to the principles of the triple bottom line. To pay tax where the money is earned. To think globally and reject profits earned from environment damage.
If it helps you identify culprits here is a partial list from which to start: Chevron, Exon Mobil, Energy Australia, Santos, Amcor, Peabody, spotless group, Ford, Nissan, Healthscope, Foxtel,
Oh the list runs on And on.
If David Murray upset some shareholders because the firm promoted a man proven to be a sexual abuser, where are the upright shareholders of the miscreant companies? If the shareholders are so addicted to dividends they refuse to look how their money is earned then it is time to double tax them if the company uses loopholes to avoid tax.