RUTH SUNDERLAND: Solutions for our lives do not lie with an elite in Davos but within ourselves, and on our doorsteps
By pulling out of Davos, investment giant Standard Life Aberdeen has lit the blue touchpaper on a debate about the World Economic Forum and corporate morality in the age of Covid-19.
As I revealed on these pages a couple of days ago, Standard Life’s boss, Keith Skeoch, has decided that parading round an exclusive Alpine resort is unthinkable at a time when people are dying of a deadly virus and unemployment is hitting the roof.
Even before the pandemic, Davos was increasingly irrelevant and seen as a byword for the arrogance and narcissism of an elite. The creed of globalisation – the free, unchecked flow of capital, goods and people – so dear to the heart of the Davos elite is under challenge. Initially this expressed itself as populism and nationalism, in support for Brexit and for Trump in the US.
Making a stand: Standard Life’s boss, Keith Skeoch, has decided that parading round an exclusive Alpine resort is unthinkable at a time when people are dying of a deadly virus
The pandemic has made us all aware of the importance of ‘localism’. Davos men and women may be citizens of nowhere with multiple homes, whose membership of a nebulous global elite is their most important allegiance. The rest of us depend on our local hospitals, care homes, schools and shops – on our communities.
Standard Life is right that the £3 million it lavished on sending top brass to Davos is better spent on local needs including food banks, deep-cleaning care homes and dementia support lines.
The two most important words for any business leader now are solidarity and resilience. Solidarity, because virtually all business is relying on taxpayers on an epic scale to keep them afloat. Public borrowing will balloon: quite literally, they owe us.
Chief executives, and the rest of the Davos-going elite, can no longer demand to be treated – and paid – as if they were a special breed apart from everyone else.
Many have taken short-term cuts, but there needs to be a more fundamental reform of the obscene packages persistently doled out to undeserving executives.
Mr Skeoch must use his powers to make this happen. He and his fellow institutional investors should also work to encourage companies to look again at business models that have been found wanting in the pandemic.
The money-managers looking after our pensions should put a premium on long-term durability over short-term profit. Too many companies are so indebted they cannot withstand even a brief drought in income. For years, keeping a cushion for security was considered wasteful, rather than prudent.
Now, ‘just-in-time’ is revealed as a far riskier philosophy than ‘just-in-case’. The crisis has revealed positives too. Britain and its businesses have discovered a resourcefulness and flexibility we did not realise we possessed.
When Covid-19 first struck in China, there were wry conversations about why we can’t build hospitals in a matter of days too. Turns out we can. What we need to do is think about how businesses, government and communities can come together at a local level to rebuild the economy.
One way millions could contribute would be through National – or Local – Reconstruction Bonds. Governments have in the past tapped citizens to loan them money, for example, through War Bonds. Reconstruction Bonds, modelled on National Savings and Investments products and paying decent interest, could raise money to finance infrastructure projects and green investment.
Solutions for our lives do not lie with an elite in Davos but within ourselves, and on our doorsteps.