by Dr. Daniel Malan
There is something surreal about being in Bali for the B20 Summit. Pristine beaches and sumptuous meals are on offer for discussions about conflict, climate change and corruption, all within the confines of what must be one of the most secure parts of the planet at the moment. The security, of course, is not for people like me, but rather for the heads of state and business leaders who are here for the G20 and B20 Summits.
The G20 members represent more than 80 percent of world GDP, 75 percent of international trade and 60 percent of the world population. The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union. It was established in 1999, initially to convene finance ministers and central bank governors, but has evolved into a yearly summit involving the heads of state of member countries. The Business Twenty (B20) is the official business voice that communicates with the G20. It was established in 2010 and formulates and presents policy recommendations on designated issues to the G20 on an annual basis. The B20 has a number of task forces, including the Integrity and Compliance Task Force.
I am here in my capacity as co-chair of the B20 Integrity and Compliance Task Force. Since January 2022, our task force, comprising more than 100 representatives from the business community, met regularly to formulate policy recommendations that have now been handed over to the G20. The core recommendations focus on sustainable governance to support ESG initiatives, collective action to alleviate integrity risks and measures to address risks associated with money laundering, terrorist financing and cybercrime.
It is beyond dispute that this is a meeting of the world’s elite (excluding a few people like me). The Elite Quality Index of St Gallen University describes elites as follows: “Elites are narrow, coordinated groups with business models that successfully accumulate wealth; they are an empirical inevitability and exist in every society on earth”. The Index makes an interesting distinction between high quality elites (those that are growing the pie) and low quality elites (those who are growing only their slice of the pie). Although both parts are present in Bali, thankfully those who want to grow the pie are in the majority. From an integrity perspective, it is somewhat ironic that the headline speakers at the B20 Summit include some of the world’s most controversial business leaders: Elon Musk and Jeff Bezos. Of course, they are drawcards as business celebrities, but both individuals – and their companies – are currently facing substantial ethical scrutiny. Musk mostly because of Twitter, and Bezos because of concerns about working conditions at Amazon. Bezos has also been sued by his former housekeeper, but that is a process that must be played out in the courts of law. However, their presence should also be seen in the context of what Ed Freeman has described as the need to move away from the saints or sinners dichotomy. There are very few companies without ethical blemishes – the way they deal with the issues are often more insightful than the issues themselves.
When I was approached recently for comment on the Twitter transaction, I said it was like Schrodinger’s Cat – both good and bad at the same time. Good because Musk seems committed to fix security holes, remove fake accounts and improve transparency overall. But bad because he seems to have a very naive view of free speech. I am afraid it has not been a good start for him, particularly in the light of the increase, rather than decrease, in fake (blue tick) accounts.
But engagement at the level of global policy calls for pragmatism. The recommendations of our task force, together with those of many other task forces, have now been incorporated into the official G20 Communique. Even if only a small percentage of the G20 members adopt a small percentage of the recommendations, the impact will still be huge. For example, every disclosure about beneficial ownership brings more transparency, and every regulation in favour of more sustainable corporate behaviour makes a difference.
Together with a few of my co-chairs, we also argue that our recommendations could be viewed as a framework for voluntary corporate action. The business community does not have to sit back and wait for governments to implement policy. The recommendations are there because the business community wants change, and change can also be achieved through voluntary action. The role of collective action, and in particular public-private partnerships, will be critical.
The work of the B20 Task Force is very much in line with the Trinity Business School mission of transforming business for good, and through my involvement with the task force I am proud to have been able to make a small contribution in this regard.