This article was first published on the World Economic Forum website.
Chief Executive Officer
BMO Financial Group
Over the years, I have had many conversations with young people encouraging them to pursue careers in business. Consistently, they’ve shared a view held by many of their peers that the choice they’ve made to study business somehow equates to a lack of support for their community and, at worst, a tacit acceptance of historic ethical failures or excesses of greed.
I’ve also observed the rise of populism leading to increasingly negative views – among people of all ages – of the “establishment”, commerce and business. In turn, this has led to a growing suspicion of global trade, which we now see expressed throughout the developed world.
To be sure, the immediate challenges of poverty and inequality seem so significant that it is easy to be cynical about how far we’ve advanced as a global society. But we must consider the benefits that free trade and globalization have brought, and the role that businesses have played along the way. It is important for all of us to stand behind what is fundamentally true – business and commerce improve lives.
According to the World Bank, global trade flows have helped to cut the number of people living in extreme poverty from around 36% in 1990 to 10% by 2015. However, while trade agreements negotiated between countries have been vital to this achievement, it wasn’t governments that went the last mile. That accomplishment is owed to individual businesses competing and trading with each other.
These realities provide a ready-made rebuttal to those who would tear down all that has been achieved. These arguments must be heard and those who have helped drive economic growth are best placed to deliver them. The business community must take up the responsibility of sharing its impact as a powerful tool for promoting social good. We must also get better at sharing our values and our stories, particularly with younger generations.
I am proud to say that my own organization, BMO Financial Group, is driven by a strong sense of corporate responsibility. When I think about the purpose of our bank, we are all bankers, but we’re not just bankers. We exist to convene, catalyze and empower change that sustains growth for good. Driving sustainable economic growth over the long term relies, in part, on our efforts to build stronger, healthier, and more prosperous communities that have greater opportunities to grow and endure.
We have several examples of activities that are fundamental to our operations, but when viewed in isolation or through outdated models of good corporate citizenship, they can seem removed from the income we earn or the short-term financial risk we take. For instance, in our relationships with employees, customers, business partners and other stakeholders, we ensure that our policies and practices align with the United Nations Guiding Principles on Business and Human Rights. In facilitating the transition to a lower-carbon economy, we assess social and environmental risk as part of our responsible banking approach. In fact, we were one of the first banks globally to adopt the recommendations of the Task Force on Climate-related Financial Disclosure.
At the same time, we must all recognize that the tremendous achievements that the business community has brought to wider society, and in particular to jurisdictions with high levels of poverty, rely on continued economic growth in high-income countries flowing to developing countries and underserved communities. This is clearly a challenge. We know that imbalances are growing throughout the developed world, with recent growth in wealth being concentrated into the hands of top income-earners.
These imbalances often represent the driving force behind the anxiety articulated by our young people. But what they fundamentally want is hope in the future and confidence that greater opportunities are ahead of them. I strongly believe that business leaders at all levels can inspire and instil that deeper sense of hope in and for young people. But they need evidence that their values are shared.
The question of how the business community can support under-employed and vulnerable populations is fundamental. We need to look for solutions throughout society, including ensuring equal opportunities for women and those affected by disabilities, and timely and targeted training for in-demand skills for those recently laid off. Making meaningful changes to employment and training policies will result in more people working, and working more productively.
Consider that in Canada alone, the province of Québec has the country’s highest female participation rate in the workforce among those of working age, thanks to public policy promoting more equal access for women to employment opportunities. If the rest of Canada saw female participation levels rise to those seen in Québec, roughly 300,000 women would be added to the Canadian labour force overnight. We must look to solutions such as this, that lead to more people working more productively and sharing opportunity more equitably.
Finding solutions means working with other community stakeholders – in business and other sectors alike – to develop a future that is more inclusive, fair and equal for everyone. If we don’t, we limit the long-term growth potential and the sustainability of the economy.
Creating opportunities to bring business leaders together represents an important way forward. In Toronto, a city with its own challenges with economic inequality, I chair a Local Economic Opportunity Leadership Roundtable. Private sector leaders have joined the Roundtable to help identify the levers available to them to create change, and formulate and steer new solutions to address issues facing our communities, such as growing income disparity and the need for inclusive local economic opportunity. Our goal is to drive meaningful change and stimulate local economic growth, with scalable initiatives. This is a model that can easily be replicated in cities around the world.
Business leaders need to take up these two challenges: standing up to share the virtues of business and modern commerce, and working together within our communities to address vital issues of economic inequality. If, collectively as leaders, we can do that, we’ll have done our part to create a stronger, healthier, more resilient and ultimately more prosperous society.