Tuesday, 22 November 2011

Equality Matters!

Sure does!

There is a considerable body of evidence that businesses and organisations that take equality seriously, do better. Their results are better. Their employees are happier, reducing absenteeism, staff turnover and increasing productivity.

And what about countries where equality is taken seriously? Evidence shows  (http://www.equalitytrust.org.uk) people in more equal societies live longer, experience less mental illness; people are less likely to use illegal drugs, children do better in schools, Unicef measures of child well-being are high; fewer people are imprisoned; obesity is less common; communities are more cohesive; teenage motherhood is less common... I could go on...

So, it is quite concerning today to read in the news (http://www.bbc.co.uk/news/business) that the CEOs of our major banks have a pay differential of 70-150 over the average (and note, the average, not the lowest paid) employee. Now that’s not equal. In 1980 it was around 13 times. That’s not progress. Not in my mind.

Who genuinely needs £4.5million a year to live on? Who justifies being rewarded at this level? People who save lives? People who care for others? Who teach skills and knowledge to the younger generation? Our society’s values seem so twisted.

And did those organisations with such enormous pay differentials succeed? No, they failed massively causing global problems we have yet to fully appreciate the enormity of. Are they succeeding now? Maybe the shareholders think so, but what about the customers? What about those trying to buy a home for the first time? What about those who have saved for a lifetime planning to live on the interest provided by those savings?

So what do we do about it? I’m not naive enough to think we can reduce a CEOs pay from £4.5million to £250k tops overnight. We can’t wipe out the changes to organisations that have happened over the last 30 years.

We’ll have to start at the bottom by creating ethical businesses. Social Enterprises, Community Interest Companies. We need to support them as they grow. Organisations that take equality seriously. That genuinely see a responsibility to the environment and are not just ticking boxes and writing off their carbon consumption.

There are some really exciting examples around not only producing great products and services but doing so in a way that can improve the lives of other people.

I’ve just discovered Lend with Care (www.lendwithcare.org) and am trying to see how to best channel a proportion of my profits to providing loans to entrepreneurs in the developing world. – to help them turn their ideas into life changing opportunities – just as I am doing with my business here. It provides an extra impetus to ensure my business does well as it just doesn’t affect me and my family, but other people in other countries.

That gives me such a great feeling. Far more than a £4.5million salary would.

4 comments:

  1. Playing devil's advocate - CEOs, by the very nature of their job do have greater responsibilities and stresses. Doesn't that justify them getting paid a higher salary?

    And while we are on this, how about the entertainment industry? How can we justify movie stars making the kind of money they make?

    ReplyDelete
  2. This comment has been removed by the author.

    ReplyDelete
  3. I seem to recall that Warren Buffet, the richest man in the world, judging by the company he founded and owns (Berkshire Hathaway), only takes home $200,00 a year, because he says that's all he needs, and his wife has to remind him to change his car every few years when it gets shabby.

    It makes you think!

    ReplyDelete
  4. I totally agree, Asha, that those at the top of an organisation need to be paid an amount which reflect the levels of responsibility they carry, but I can't think of anyone who holds more responsibility than, say, a Prime Minister or the head of one of the armed services and they certainly don't earn anything like 4.5million. I also don't see us having a problem attracting people to those positions - another arguement often used to justify extortionate pay levels.

    I am totally with you about the entertainment industry too! Not just movie stars, but footballers and "celebrities".

    Interesting article yesterday about banking attracting ethical students to work in the industry by suggesting they could then use their salaries to benefit many people by using it in a charitable form. Colin - I think you make this point excellently with your example.

    ReplyDelete