In our series "The Price of Profits," we're exploring corporations. What are they for? Who are they for? And how that impacts the economy and you.
Lord John Browne is the former CEO of BP and the co-author of "Connect: How Companies Succeed by Engaging Radically With Society." He spoke with Marketplace Morning Report host David Brancaccio about why incorporating society's needs in long-term thinking is the best strategy.
On the importance for companies to pay attention to society:
When that bond between the company and society is broken, reputations are damaged, trust is gone, and what's more, what's very important for shareholders, is the value of the company reduces. There's a significance value at stake, which we estimate to be on average 30 percent of the value of a company, that is damaged when a company does something which is not right for society.
On losing sight of the impact on society:
Everybody loses sight of it I believe. We certainly did, I certainly did. Companies do live in a bit of a bubble. So I think it's about understanding your context and then making sure all the things you want to do with people regardless, they're not just your shareholders or your staff, but all the other people and institutions, aligning them within your strategy and measuring what you're doing about it.
On the old model of corporate social responsibility:
While corporate social responsibility was a very well meaning and worthy thing to have started, it no longer serves a useful purpose in that it is detached from the basics of a business, and it is something, which in the words of one of my friends, that boards of directors only examine at 4:30 on a Friday afternoon.
"The Price of Profits," our series with Business Insider, looks at what happens when profits become a company’s product. For more, visit priceofprofits.org.