The Innovation Age
Leading the companies that will build our future
Why have companies stopped working for society?
Growing Corporate Profits have coincided with an erosion of Public Trust in business.
creation & Distribution
The questions of ‘How do we create?’ and ‘How do we distribute?’ are often asked independently of each other. Innovation is a problem for the scientist, distribution for the politician. ‘Growth’ is the mantra of the political right-wing, ‘distribution’ the mantra of the political left. And yet, to distribute, we must first create, and to create we must be willing to distribute.
These questions of creation and distribution are deeply intertwined. A company’s ability to create value is integrally bound up with its ability to distribute that value fairly. And a company’s ability to reward its stakeholders fairly for their efforts is deeply linked to its ability to create value in the first place.
Too often, corporate governance is framed as being about the distribution of profits. However, this overlooks the critical role that corporate governance also plays in the creation of value - of which profit is just one part. Creation and distribution connect through the issue of corporate control: that is, how and for whom companies are run.
Communities have grappled for millennia with trying to strike the right balance between creating collective benefits and distributing them fairly. Communities that have succeeded in getting this balance right have thrived, while communities that got this balance wrong have disappeared. We must seek inspiration as to how to build the companies of the future - ones that innovatively solve our most pressing problems and then fairly share the proceeds - by studying how thriving communities have for millenia succeeded in striking the balance between creation and distribution.