Business and Finance are Undergoing Profound Change

As the size and influence of multinational corporations have grown to levels that today rival nation states, the importance of business for our prosperity, wellbeing – and for our very survival – has never been more evident. And despite the 2008 crisis that shook the pillars of business and society; despite hundreds of books, publications, conferences, and global initiatives on the topic of sustainability and corporate social responsibility; despite all this, we still live in a world where people and the planet are in service of business; business is, in turn, is in service of finance, and finance is primarily in service of itself.

This model is neither sustainable nor fair, and the level of trust in business and in business leaders has reached a dramatic low point. A profound transformation in the way business operates is needed.  This is both a duty and an opportunity for the business leaders of today and tomorrow to embrace.  

It was against this backdrop that the third annual Economics of Mutuality Forum took place on 18 and 19 May 2018 at Saïd Business School, University of Oxford. Over 500 attended, including senior executives from businesses, foundations and NGOs, academics, investors, government policymakers, and MBA students.

Organized jointly by Saïd and Mars Catalyst, the think-tank of Mars, Incorporated, as part of their multi-year joint research program, this year’s Forum built on the success of the previous two annual events and on more than a decade of in-depth research and practical business application to introduce the Economics of Mutuality, a breakthrough management innovation that proposes a more complete and more mutual model of value creation. Based on new performance metrics, new management practices and new modes of profit construction, the Economics of Mutuality aims to restore the positive role of business and finance in society, to rebuild trust in business and finance and to create opportunities for businesses to grow faster, more profitably and responsibly.

Key Themes

Key themes emerging from this year’s forum included the realisation that business leaders are ill-equipped to handle the new complexities, size and influence their businesses confer on them, and the inadequacy of the management sciences field at present to support the fast-evolving nature of the challenges that modern businesses face.  More specifically, through a series of keynote speeches, case studies and master classes that enabled delegates to go deep into various aspects of the Economics of Mutuality approach, the forum explored recent advances in measuring and managing business performance beyond financial capital alone, as well as innovative new management accounting practices based on the concept of ‘mutual profit’ that embrace different forms of capital – financial and non-financial. The forum also explored new forms of governance and education, highlighting the responsibility on the shoulders of business leaders to reposition the corporation positively, in ways that reflect the changing needs of society and the planet, thereby restoring trust in the institution.

During the forum, the concept of mutuality was introduced as ‘an invitation to join a network of reciprocal relationships in an ecosystem,’ and the Economics of Mutuality was presented as a management innovation proposing a ‘Copernican’ type revolution, whereby the firm and maximising profit are at the periphery of a broader ecosystem of stakeholders rather than at the center. In such a business model, Purpose is meant to be at the center and to be the central driving force for the firm to ‘develop solutions to people and planet profitably and at scale’.  And, once the firm commits to its purpose, it also commits to those contributing to that purpose, giving rise to a reciprocal relationship of trust. In that mutually beneficial (reciprocal) process business will generate growth and profit (potentially even more than traditional models that focus on maximising profit alone), but profit itself is not the purpose of business. 

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