A Post-Covid So­cial Con­tract

Business a.m. - - EXECUTIVE KNOWLEDGE SERIES - Karien van Gen­nip

HOW WE CAN MAN­I­FEST “THE next world” that serves us all.

Peace and pros­per­ity are a part of ev­ery­day life that we seem to have taken for granted. We used to be cer­tain about how life should be, what suc­cess looked like, and we used to feel in­vul­ner­a­ble. Along the way, there have been se­ri­ous alarms call­ing for our at­ten­tion: cli­mate change, po­lit­i­cal po­lar­i­sa­tion, mi­gra­tion and widen­ing in­equal­i­ties. But none of these frankly enor­mous prob­lems is of the mag­ni­tude of the cur­rent cri­sis. With all that Covid-19 has wrought, we must deeply re­con­sider our so­cial and eco­nomic model and think “the next world” into be­ing.

Es­sen­tial ques­tions

A new so­cial con­tract must ad­dress ques­tions that arise from our pre­vi­ous ex­pec­ta­tions.

How can we rec­on­cile re­lo­ca­tion and glob­al­i­sa­tion? Our habits must change. That time when we were fly­ing off for a long week­end in Barcelona or Prague, for ex­am­ple, al­ready seems long gone. Re­think­ing our at­ti­tudes to­wards travel may well be long over­due, if only for the ben­e­fit of the en­vi­ron­ment. Lock­down pe­ri­ods high­lighted the need to lo­cate the pro­duc­tion of cer­tain items, such as med­i­cal equip­ment, much closer to home. But as a for­mer Dutch Min­is­ter for For­eign Trade, I firmly be­lieve that we must not aban­don the idea of an open world, one that brings sta­bil­ity, con­nec­tion, eco­nomic growth and in­no­va­tion.

How can we pri­ori­tise both eco­nomic and en­vi­ron­men­tal ob­jec­tives? The Covid-19 cri­sis rep­re­sents a unique op­por­tu­nity to build an econ­omy on health­ier, more ag­ile and more sus­tain­able foun­da­tions. I do not agree with those who say, “We don’t have money to fi­nance a sus­tain­able ap­proach, it is a ques­tion of sur­viv­ing to­day.” Sus­tain­abil­ity is the an­swer to the cri­sis.

How can we en­sure so­cial dis­tanc­ing doesn’t con­trib­ute to so­cial dis­tance? Ac­cess to ed­u­ca­tion and health­care for all are the pil­lars of our Euro­pean so­ci­eties. We don’t have to mort­gage our homes when our par­ents get sick nor do we start our ca­reers with over­whelm­ing stu­dent debt. What­ever the in­ten­sity of the cri­sis hit­ting Europe, ours is a model to be pre­served to guar­an­tee sta­bil­ity and al­low real so­cial mo­bil­ity.

How can we truly in­vent the “fu­ture of work”? In terms of dig­i­tal­i­sa­tion, the last few months have been the equiv­a­lent of about a decade of ac­cel­er­ated progress. We can rein­vent our busi­ness models, re­think the role of work, be­come more ag­ile in the face of ex­ter­nal changes and bet­ter meet the ex­pec­ta­tions of our em­ploy­ees and our cus­tomers.

Found­ing prin­ci­ples

These ques­tions are es­sen­tial be­cause our chil­dren are cer­tain to look back and ask us what we did in 2020. Our gen­er­a­tion will be judged by our de­ci­sions at this mo­ment in time. And more than ever be­fore, we need real co­op­er­a­tion be­tween gov­ern­ment and busi­ness, co­op­er­a­tion be­tween busi­nesses them­selves and with all or­gan­i­sa­tions to find a new path.

At the start of the cri­sis, the French gov­ern­ment made em­ploy­ment more flex­i­ble by law and pro­vided fi­nan­cial sup­port to busi­nesses in dif­fi­culty. Now the ques­tion is not so much what com­pa­nies can ex­pect from the state, but what we as com­pa­nies can do proac­tively to as­sume our re­spon­si­bil­i­ties to­wards so­ci­ety. Many are call­ing for the re­turn of a “strate­gic state” in France – one that prac­tises di­rect in­ter­ven­tion in busi­ness, spec­i­fy­ing cer­tain eco­nomic sec­tors as pri­or­ity. I think that above all we need not only a “re­spon­si­ble state”, but also “re­spon­si­ble com­pa­nies”, with a re­in­forced di­a­logue to con­sol­i­date the four found­ing prin­ci­ples of the new world: sus­tain­abil­ity, in­clu­sive op­por­tu­nity, fi­nan­cial re­spon­si­bil­ity and so­cial re­spon­si­bil­ity.

Eco­nomic re­cov­ery is only truly pos­si­ble with a sus­tain­able “green re­cov­ery”. There can be no com­pro­mise on this point. Com­pa­nies must take the ini­tia­tive, as ING does with its sus­tain­able im­prove­ment loans, for ex­am­ple, which are loans with an in­ter­est rate linked to a firm’s sus­tain­able de­vel­op­ment am­bi­tion. For its part, France could use the lever of na­tional loans to sup­port this tran­si­tion.

Real in­clu­sion is one of the cru­cial chal­lenges of our time. Where are we? At the cur­rent rate, it would take over 250 years to bridge the gen­der gap in the lead­er­ship po­si­tions of com­pa­nies. The sit­u­a­tion is even more wor­ry­ing when we con­sider gaps re­gard­ing dis­abil­ity, race, LGBTQ+ and other kinds of di­ver­sity. We must be trans­par­ent and face re­al­ity. One pos­si­ble fea­ture of the new world is imag­in­ing a Péni­caud in­dex equiv­a­lent that cov­ers all forms of di­ver­sity to see how far we all have to go to achieve real in­clu­sion.

Com­pa­nies must, of course, be prof­itable and in­vest in in­no­va­tion, em­ploy­ment, train­ing and cus­tomer ex­pe­ri­ence. It is equally im­por­tant that they pay their taxes and thus con­trib­ute to the eco­nomic re­cov­ery. As tax­pay­ers, firms can in­sist on sound and ef­fi­cient man­age­ment of pub­lic funds by the gov­ern­ment and the pro­vi­sion of es­sen­tial pub­lic ser­vices (ed­u­ca­tion, health, se­cu­rity, for ex­am­ple).

In terms of so­cial re­spon­si­bil­ity, it is time for us as com­pa­nies to rede­fine our rai­son d’être. This process in­volves open re­flec­tion with our col­leagues, cus­tomers and dif­fer­ent stake­hold­ers; it can­not be im­posed from above. The re­def­i­ni­tion of our added value and our role as a re­spon­si­ble ac­tor in our so­ci­eties fol­lows from this re­newed sense of pur­pose.

A level play­ing field

We have long claimed that we are far too busy to break free from our es­tab­lished pat­terns. With the Covid-19 cri­sis, we have the op­por­tu­nity and the duty to re­think our so­cial con­tract. As com­pa­nies, we must also pro­vide trans­parency and re­sults. Let’s not wait for gov­ern­ments to is­sue guide­lines or level the play­ing field. Let’s take the op­por­tu­nity to­day to shoul­der our re­spon­si­bil­i­ties to­gether.

The orig­i­nal ver­sion of this ar­ti­cle ap­peared in L’Opin­ion.

Karien van Gen­nip is the CEO of ING France. She is the for­mer Vice-Pres­i­dent of the ICC (In­ter­na­tional Cham­ber of Com­merce) and for­mer Min­is­ter for For­eign Trade of the Nethe

“This ar­ti­cle is re­pub­lished courtesy of INSEAD Knowl­edge (http://knowl­edge.insead.edu). Copy­right INSEAD 2020

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