2023-07-01 00:50:48
Saturday, July 1, 2023, 00:50
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The classic finance manuals define profit as the economic gain – only economic – that is obtained from a business or investment. They do not say anything about the consequences that, inside and outside the production centers, their search may cause. The mission of a company is to make money, they explain with a firmness that today sounds outdated. Companies have long had a broader perception of their purposes, although the old definition continues to constitute an obstacle when it comes to claiming their contribution to social welfare. «The companies have already internalized that they must return a part of what they have received and that this generates benefits for the staff, for the clients… And, of course, for the owner, who is the one who assumes the risks, and that many Sometimes he is a highly undervalued figure”, explained Pablo Sanz, partner responsible for the northern area of EY, to those attending the business meeting ‘The impact beyond the income statement’, organized by the consultancy together with EL CORREO.
Xabier Sagredo, president of BBK; José Galíndez, president of the Círculo de Empresarios Vascos and vice president of Solarpack; Jordi Albareda, founder of the Fair Saturday Foundation, and Leire Bilbao, general director of the Basque Innovation Agency (Innobasque), who opened the debate by ensuring that “company benefits should have social recognition, but this can only be acquired if the benefits imply reinvestment in the organization itself and its people, on the one hand, and in society, on the other. We need capitalism, but also humanism.
«The company itself already has a social purpose. In Bizkaia we would not have the quality of life that we enjoy if it were not for the business development of the last 40 or 50 years and that must be valued. We should ask ourselves, then, why companies are demonized to have profits when what we should be concerned about are asymmetries, which are becoming more acute,” added Albareda. In his opinion, despite the fact that “the world has never been better than now and the average is doing well”, not only are social and economic inequalities growing, but also generational and knowledge inequalities. “Obviously it is necessary for companies to have benefits, but also for society to perceive that they have a genuine commitment to try to correct these asymmetries.”
Social work
Precisely, the attempt to alleviate some situations of inequality from the private sphere is at the origin of the social work of financial institutions, historically associated with savings banks and now inherited by banking foundations. As for regulatory reasons they have to find a way to be self-sufficient, many of them have become investors. «Before we did more or less social work according to the benefits we obtained as a box. Today, the financial business and social work are separated and for it to be sustainable it must have a solid economic structure behind it. That is what has led us to invest in other companies; a clear interest in diversifying income and risk beyond the banking sector, and thereby guarantee the future of our social work. Furthermore, in our case, we want to act without sharing decisions with investment funds”, explained Xabier Sagredo, president of BBK.
Given that in this case the social implications are unavoidable, the destination of these investments must be specially evaluated. «We find out the needs that society already detects in its environment and that the Administration does not reach. From there, we look for companies that fit our risk appetite and profitability policy, that offer eligible products and services in accordance with our values and that, in addition, we can consider strategic, with an indefinite permanence that will contribute growth» , indicated the president of BBK.
«Until recently we did not have many investment mechanisms that allowed companies that needed capital to grow to find it nearby, without having to put themselves in other hands. It is something that you have to continue working on, because together with the availability of talent, it is one of the keys for a company to take root. When SMEs get bigger and enter the global economy, sometimes that rooting is in danger. But there are examples in countries around us that show that roots are not an impediment to growth,” added José Galíndez, who also wanted to erase the image of the businessman “obsessed with improving his margins.”
«Having benefits is a ‘sine qua non’ condition to continue being a company, but throughout my career I have not seen them be stubborn in any. On the other hand, it is optimizing what you have and working on products and services that are leaders in your market. The contribution to society of a company is that; improve those products and services, and in doing so they generate employment, pay taxes and improve life in their environment –he explained–. If you become obsessed with what you should do, the benefits arrive and these have social consequences within the company, with motivated employees, and outside, with a citizen environment that is proud of the companies it hosts».
That well-focused “obsession”, recalled Leire Bilbao, “is what Enrique de Sendagorta –one of the founders of Sener– called ‘affection for the company’”. “Wanting it to be better is what makes them, for example, make an effort to maintain investment levels in innovation despite uncertainty or to ensure that the people who integrate them work in a healthy environment.” «In fact – added Jordi Albareda – clients may not always be in a position to reward firms that perform well, but where this trend is already undeniable is in attracting and retaining talent. Corporate social responsibility provides differential value”.
Olatz Garamendi, Minister of Public Governance and Self-Government. MS
“Each person is the horizon, beyond those of results”
«In a decade we have managed to reduce the unemployment rate in half. This can only be achieved if there is public-private collaboration and we share a priority; service to society.” The Minister of Public Governance and Self-Government of the Basque Government, Olatz Garamendi, took the search for profit beyond economic results to the institutional sphere, stressing the need for administrations to “gain prestige and legitimacy before our organisations”. «The way to achieve this is to present, defend and fulfill a program that assumes the commitment to strengthen the community. That is corporate social responsibility; keep people at the center of the action. Make each person our horizon, beyond the income statement », she underlined.
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