The New Realities for Boards in the Age of CONSCIOUS CAPITALISM · 2012-12-11 · The New Realities...

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

$467 $453 $566

$596

$615 $667

$873

$1,262

$2,113

$6,055

2010: $7,278 Real GDP per Capita (2000 $)

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Sources: www.VisualizingEconomics.com; Angus Maddison, University of Groningen; www.prb.org; www.worldbank.org

0 2000 500 1000 1500

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Capitalism is Ending Poverty on Earth

World Population Living on <$1/Day

0%

50%

100%

1800 1950 1980 2003

Source: World Bank (2003 dollars)

If current trends continue, extreme poverty will be virtually eliminated in the next 50 years.

“One day our grandchildren will go to museums to see what poverty was like.”

Muhammad Yunus

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 Business is

0%

5%

10%

15%

20%

25%

30%

35%

40%

Yet, Trust in Big Business has Plummeted % of Americans with a "Great Deal" or "Quite a Lot" of Confidence in Big Business

Such cynicism and distrust have very high societal costs

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

In 1989, for the first time in U.S. history,

the majority of adults were over 40

PCG TODAY 39-49

Who is this man?

What did he do to change the world?

Tim Berners-Lee

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

Peter Senge

Live in harmony with nature

Fully mindful and awake

Understand all the consequences of our actions

Reject violence

Greater commitment to the truth

A finer sense of right and wrong

“The dogmas of the quiet past are inadequate to the

stormy present.”

They must be aligned with the new realities of our world and they must

embody a more conscious way of being

What will it take for companies to flourish in the future?

100% SALARY TRANSPARENCY

80% LOWER SPEND ON MARKETING

1800% RETURN OVER 10 YEARS

THE FLOOD

A HIGHER PURPOSE

93% STOCK OPTIONS TO NON-EXECS

19:1 SALARY CAP

DECLARATION OF INTERDEPENDENCE

A BUSINESS BUILT ON LOVE, NOT FEAR

The Tenets of Conscious Capitalism

HIGHER PURPOSE

STAKEHOLDER INTEGRATION

CONSCIOUS LEADERSHIP

CONSCIOUS CULTURE &

MANAGEMENT

LOVE

JOY AUTHENTICITY

CARING

COMPASSION

SOULFUL

10.5-to-1

performance

“FoE”

(1646%)

Stock Returns over a

15 Year Period (’96-’11)

S&P 500

(157%)

15 Year 10 Year 5 Year 3 Year

Cumulative Annualized Cumulative Annualized Cumulative Annualized Cumulative Annualized

FoE Return 1646.1% 21% 254.4% 13.5% 56.4% 9.4% 77.4% 21.1%

GTG Return 177.5% 7% 14.0% 1.3% -35.6% -8.4% -23.2% -8.4%

S&P 500 Return 157% 6.5% 30.7% 2.7% 15.6% 2.9% 10.3% 3.3%

FoE Compared to Good to Great

Businesses Create But Can Also Destroy Many Kinds of Wealth

intellectual financial social emotional

spiritual cultural physical natural

25

We are all in the same boat

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