The New Realities for Boards in the Age of CONSCIOUS CAPITALISM Raj Sisodia Director, Mastek Ltd. Professor of Marketing, Bentley University Chairman, Conscious Capitalism Institute
What Capitalism has Enabled Real GDP per Capita (2000 $) 2010: $7,278 1750: Industrial Revolution Begins 1776: Wealth of Nations/US DoI $6,055 $2,113 $1,262 $873 $596 $667 $615 $566 $453 $467 0 500 1000 1500 2000 Sources: www.VisualizingEconomics.com; Angus Maddison, University of Groningen; www.prb.org; www.worldbank.org
Capitalism is Ending Poverty on Earth If current trends World Population Living on <$1/Day continue, extreme 100% poverty will be virtually eliminated in the next 50 years. 50% “One day our grandchildren will go 0% to museums to see 1800 1950 1980 2003 what poverty was like .” Muhammad Yunus Source: World Bank (2003 dollars)
Business is good because it creates value ethical because it based on voluntary exchange noble because it can elevate our existence heroic because it lifts people out of poverty
Yet, Trust in Big Business has Plummeted % of Americans with a "Great Deal" or "Quite a Lot" of Confidence in Big Business 40% 35% 30% 25% 20% 15% 10% Such cynicism and distrust have 5% very high societal costs 0% Source: Gallup
An Epidemic of Apathy The Shame of “Management”?
WHY has this happened? THE WORLD has changed PEOPLE have evolved BUSINESSES have not adapted
1989 THE WORLD CHANGES
PCG In 1989, for the first time in U.S. history, TODAY 39-49 the majority of adults were over 40
Who is this man? What did he do to change the Tim Berners-Lee world? He invented the World Wide Web in 1989
There are now more active phone numbers than people Facebook has over 1 billion members
THE FLYNN EFFECT
Fully mindful and awake Understand all the consequences of our actions Greater commitment to the truth A finer sense of right and wrong Reject violence Live in harmony with nature Peter Senge
“The dogmas of the quiet past are inadequate to the stormy present.”
What will it take for companies to flourish in the future? They must be aligned with the new realities of our world and they must embody a more conscious way of being
A BUSINESS BUILT ON LOVE, NOT FEAR A HIGHER PURPOSE DECLARATION OF INTERDEPENDENCE 19:1 SALARY CAP 93% STOCK OPTIONS TO NON-EXECS 100% SALARY TRANSPARENCY 80% LOWER SPEND ON MARKETING 1800% RETURN OVER 10 YEARS THE FLOOD
The Tenets of Conscious Capitalism STAKEHOLDER HIGHER INTEGRATION PURPOSE CONSCIOUS CONSCIOUS CULTURE & LEADERSHIP MANAGEMENT
COMPASSION LOVE CARING SOULFUL JOY AUTHENTICITY
10.5-to-1 performance “FoE” (1646%) S&P 500 (157%) Stock Returns over a 15 Year Period ( ’96 - ’11)
FoE Compared to Good to Great 15 Year 10 Year 5 Year 3 Year Cumulative Annualized Cumulative Annualized Cumulative Annualized Cumulative Annualized 1646.1% 21% 254.4% 13.5% 56.4% 9.4% 77.4% 21.1% FoE Return 177.5% 7% 14.0% 1.3% -35.6% -8.4% -23.2% -8.4% GTG Return 157% 6.5% 30.7% 2.7% 15.6% 2.9% 10.3% 3.3% S&P 500 Return
Businesses Create But Can Also Destroy Many Kinds of Wealth financial intellectual social emotional spiritual cultural physical natural
We are all in the same boat 25
Our Opportunity Those of us alive today can choose to lead the most meaningful lives humans have ever led Our challenges are greater than ever, but so is our consciousness of those challenges and our ability to change things We just need to unleash human ingenuity on our challenges in a holistic, caring and conscious way Adapted from Lynne Twist
Books for Conscious Capitalists
www.ConsciousCapitalism.org Raj.Sisodia@ConsciousCapitalism.org
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