BUSINESSES exist to make profit. No argument there. The question is whether this is an all-encompassing expression of their raison d’être.

If this was so, then the business model employed at African Bank could have been excused in light of the spectacular profits it had generated in the past. Such an interpretation would also have sanctioned the role that the (last-minute) disinvestment by Coronation may have played in African Bank’s demise in the name of “protecting shareholder wealth”.

Under such an interpretation, we could even feel sympathy for another unsecured lender, Bridge, which is now facing the consequences of a turn in investors’ sentiment, which has destabilised a whole industry. While we are at it, let’s also forgive the debt collectors and high-return investment schemes which are run off the back of micro-lending just because they are so “profitable”.

Of course, it has to be said that an argument for a myopic focus solely on financial performance seems sensible. For one thing, numbers are concrete indicators of performance.

Second, profitable companies create shareholder wealth and provide employment opportunities, which does benefit the wider society. In fact, the more profit they make, the higher their contribution to society in the form of taxes. In this way, so the argument goes, business profits trickle down to society and so there is no need to intentionally assign any social duty to business.

That all sounds reasonable and sane — except for the fact that not too much of that “benefit” is actually trickling down to society, or, where it has, it has only done so at an immense cost.

Economists Joseph Stiglitz and Thomas Piketty are independently pointing to how the current economic system (and businesses’ involvement in it) has caused income inequality at unprecedented levels.

At the same time, increasingly powerful corporations are greedily devouring natural resources -much of which cannot replenished at the same rate that it is used. This is clearly not sustainable and points to a new frontier for corporate governance in which governance codes need to articulate and advocate a role for business that goes beyond simply profit generation.

That all sounds reasonable and sane — except for the fact that not too much of that “benefit” is actually trickling down to society, or, where it has, it has only done so at an immense cost.

It’s a popular fad to invoke War Strategy as a metaphor for business endeavours, so I turn to the notion of “Commander’s Intent”, which was developed by the US Army for inspiration (and was referred to by Chip and Dan Heath in the book Made to Stick).

Here’s the thinking: plans for military operations are, like most business plans, very thorough. They detail the scheme of manoeuvres, the equipment required, how munitions will be replaced and so forth. But there is still always one catch: no plan survives contact with the enemy.

Unpredictable events — such as weather changes or a surprise move by the enemy — can derail plans, so the idea that articulating the “Commander’s Intent” is a way to adapt to these eventualities. The idea is that generals, officers and soldiers should all understand what the intended outcome is so that they are able to adapt accordingly when plans go awry.

Corporations should take a leaf out of the army’s handbook and keep the “ultimate intent” doctrine front-of-mind as a beacon for behaviour and decision-making in the business.

If the intent is expressed solely as a “profit motive”, this isn’t very useful in galvanising employees’ passion towards a common purpose. It will most certainly also not help restoring trust and hurts the legitimacy of that business in the eyes of civil society. It also doesn’t help directors deal with a macro environment that is increasingly dominated by divergence and fragmentation.

This intent should go to the core of the business’ existence — but how do you give content to this abstract concept?

The World Economic Forum has resuscitated the argument of the “common good”, first debated more than 2000 years ago in the writings of Plato, Aristotle, and Cicero, as a potential higher-order value to create an aspirational meeting point between the diverging interest of government, business and society.

On the strength of the interdependent relationship that exists between business and society, the top scholars argue that a “shared value” approach is both socially responsible and increases profits.

Now apply this hypothesis of “shared value” to the micro-lending industry and it could look something like this: the “intent” should be to include those who have traditionally been excluded from meaningful participation in the economy by offering unsecured lending in a responsible way that empowers borrowers.

By following this socially adjusted business model, a micro-lender can build its future customer base while securing sustainable profits in the long term.

Idealistic? Indeed, and unapologetically so.

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