Thank you very much for having me. Its a real treat and feedback even if only virtually at fordham. Many years ago in a fit of youthful idealism as dave mentioned i got a phd in philosophy and that was great and my father was always terrific and said will never have to worry about a job because they just opened a bunch of philosophy factories by the interstate and you will be fine. I was very lucky to get a post doctorate at wharton and have always taught in Business Schools but i want to recapture today, if i can, that sense of optimism and idealism in the shadows of this awful pandemic and the really devastation that has occurred in the world and in many communities. I still remain incredibly optimistic that we will find our way out of it that we will find our way to Racial Justice and that we will build a better world which is what all of us, i think, would like to do. I want to focus on the debate which exists about ethics and capitalism. There is an old story about business that is deeply rooted and all over the world and not just in the u. S. And you know the old story is this is about the money and about profit and last week was the 50th anniversary of the very famous paper by Milton Freedman that the only task of managers is to make as much money as possible for shareholders and that old story may have been useful at some point and i dont want to know but it is not very useful and not very useful anymore. The idea that making money and profits is all that matters in the idea that shareholders are all that matter and the idea that businesses are about greedy old bastards trying to do each other in and people only worry about their shortterm economic selfinterest and when i tell someone i teach Business Ethics people have to manage not to laugh or make jokes all of which i have heard. Its an oxymoron. Its like jumbo shrimp or must be short course or i do know business had any theoretical subjects. If you have new ones, put them in the chat so i can use them. Ever since the Global Financial crisis we have seen an increase in the sort of clarion calls for can we think about business or capitalism different . I will use those two terms interchangeably and im kind of a modernday adam smith fan. Smith never use the word capitalism and he did write a lot about ethics than most people dont reed so the aftermath of a Global Financial crisis saw an increase in the calls for reform. I want to juxtapose that again several problems that are there and first problems were called the 70 problem. Semi present problem comes from the studies that look at engagement and how much our people engaged in their work and the 70 number was done on the u. S. And is higher in many places or lower in a few places like singapore and others and 70 of people are unengaged and i love this, or actively unengaged in their jobs. Now, if you are unengaged you just dont care. If you are actively unengaged i guess you would show up every day and try to take the place down so thats a real problem i think, a real practical problem. Ive asked many ceos what are those numbers in their organizations say and they all like to think its better but some will say well, you know, weve got to work on this. There is a standard issue about that is been there for a long time about trust in business and trust in business and Business Executives is fairly low. Youve seen studies on 10 and people trust business less than they trust lawyers and doctors which hurts for some of us in the only Group Business beats in terms of trust is politicians. I will let you decide whether thats a victory or not. It seems not to me. Were still dealing with the aftermath of the Global Financial crisis and along comes the covid pandemic and along comes the movement catalyzed by black lives matter and the search for Racial Justice. Business isnt immune to any of these inc. s and has a part to play in all of them but we are not going to solve these problems with more of the wrong thing we will not solve these problems by trying harder to maximize shareholder value. We are not going to solve these problems by seeing business as just a bunch of greedy bastards trying to outcompete each other and always acting in their shortterm self interest and what we need is a new narrative in a new story of business in a new way to think about this and we need a new conceptualization of this business. The good news since ive painted a fairly dark beginning in the good news is this isnt happening in the world and is easy to forget about it. Think about the incredible interests or it started in the 60s but weve seen an incredible renewal of interest in corporate responsibility, and sustainability and weve seen social on governorship come to the fore and organizations like just capital like Inclusive Capitalism and like richard brand in the thing i always forget that like the gri and Impact Investing and Conscious Capitalism and social responsible investing and stakeholder capitalism all of these movements and they are all founded on Real Companies out doing business in a different way. I was at a meeting at the white house in the waning days of the administration and the point of the meeting was to try to figure out what is the right brand and what could government in particular department of labor what could they do to encourage this movement but what is the right brand and how does this get branded and wouldnt it be better if we all sort of pull together under one brand and after sitting there a while and began to think that maybe its the wrong question. Or a different question. Maybe a better question is to think about what are the four or five absolutely necessary things that whatever the brand turns out to be this new story of business, this new story of capitalism has to deal with and so we decided to write an one of my colleagues a chair professor at notre dame decided to write the power of and responsible business without tradeoffs and suggest that there five key areas, key principles, five key ideas and maybe six or seven and we focused on these five and they are connected. They give us a way out of thinking about business in the old story but they do require a fair amount of imagination. I want to briefly talk about these five in the q as focus on any of them that you want to but the first one says look, we need to think about the story of purpose is wrong. It says purpose of business is to make as much money as you can. Look, i need red blood cells to live. But it doesnt follow from that that the purpose of my life is to make red blood cells. Even when i might have to focus on making red blood cells i had a fun weekend a few years ago and got my hip replaced. Thats not a fun weekend and i had focus on making red blood cells and it still wasnt the purpose of my life even though thats what i had to do. Business must have profits. The idea that profits are bad or profits are evil is like red blood cells are evil. No, youve got to have them to live. Im a little bit of a musician and we have a say and everyone has to get paid and it doesnt matter whether youre forprofit or notforprofit but you got to get paid and invest in the future. Profits are necessary but that is not the purpose of a business. That is not why entrepreneurs start business. They dont say i will start something so i can make money but id say you better get a job because you got a better chance of making money getting a job then you do starting something. On schnurs starting business because they have a purpose and a vision and they want to bring something into being in purpose is what activates Business Ideas and profits follow from purpose and they are not themselves the purpose of business but they are its a little bit like some of you may know people who spend a lot of their time focusing on being happy and everything they do is about being happy and got to be happy et cetera and they think these are the most mythical people on the planet because they dont understand that happiness is an outcome. Its an outcome of what your relationships are and what youre doing with your life and what your purpose is. Profits are the same way. Simply an outcome of how you make your purpose real and what are the ways that you create value for your stakeholders. We need purpose and profit, not just profit. The second point is no surprise to any of you that familiar with anything ive done and since the late 70s of written about this idea of stakeholders and how i thought thats just the way business worked. Ive never understood why people thought that was a radical idea or even an interesting idea. Although there were some interesting ideas within a book i wrote. I didnt think this was the most interesting one. I didnt realize how embedded the old story was in her mind. We are in the grip group of the old story, a group that in there. It will always create, and sometimes destroy, value for suppliers and communities and the people with money. Building and leading a business means getting these things going in the same direction. Even if you are the most freeman night in the world and all you care about shareholder value, how are you going to do it . Great products with customers, suppliers who want to make you better, employees who are engaged, communities who want that and if youre lucky, you might make some money. Being stakeholders versus shareholders, these are interdependent you cant look at them as one versus another. The second thing to notice is thinking about stakeholders is a fundamentally different way that most people want to think about business because you have to think about them in relational terms think about relationships. A relationship is very different than a transaction. Transactions are one of things that might be repeated but relationships indoor overtime. You expect them continue. In personal relationships, kind of go for. My wife and i have been married 43 years. She is the reason i went in the first place. She went to grad school and i followed her along. I went to another room in our house and i said you know hon, ive been keeping score and i think you owe me three. I wasnt certain of what the outcome would be but i dont think it would be good for me. Relationships, you dont have to keep score. Push comes to shove, you help each other, that is how business works. Its not just this transactional thing. There some parts of business that are like that but for the most part, to build a great company, you build a center relationship so its purpose and profit stakeholders and shareholders. Business doesnt exist in this world imagined by economists, this is a pretty good story where there is perfect competition, there are only market forces, all information is contained in the price, etc. We know how that story goes. Business in the real world is connected with other societal institutions and we, as far as actors with business, we are one, consumers. Employees, citizens, parents, partners, patients and its very hard to separate out one institution from another. We need to see business as connected in society with these other institutions and try and understand how business can partner with them, if you like, to improve. Its also true if you think about, we call this business embedded in the physical world and one of the things we know, we cant forget about not only intangible resources but tangible resources. Thinking about what sustainability means, how business can be connected, also societal institutes is the problem. It is a problem especially today in the u. S. , and other places of the world because of capitalism. Because of some businesses in cahoots with people in government to make special deals for themselves. Here, the case is not letting markets work enough and not seen business as part of society but rather look, im doing this to make as much money as i can. We need, if we are going to solve problems like global warming, we need people to start businesses and use their creative imagination. As a principal called a human complexity and the idea behind this is that we are not onedimensional maximize some short term, there are people like that. We call them sociopaths. [laughter] the most part, we elect them to political office. Completely nonpartisan. Human beings, what are human beings . We can be selfish, of course and we can be completely other regarding. Anybody ever been in love or who has had a child knows that this idea of focusing on our rational self and others, its just a logical mistake. Thats not what human beings are. So said human beings can be excited by this iphone i have here, think of the vocabularies weve had to literally invent to get to iphones. Invent the terms, the problems, the issues. We have to invent vocabulary and physics that went on the inside. What a human being is, a set a creature who can invent vocabularies to solve problems and actually realize solutions. That is what business does and it is time we recognize that. Business works because we can Work Together to create. No one of us can do it alone. Its the urge to create, Work Together in relationships with others. Thats what makes capitalism work and it is time we recognize this. There are lots of examples of companies doing this dont take this as this is the wish list of the way the world was. The way the world should be. What im trying to argue is, this is actually happening in the world but in the grip of the old story that sometimes we dont get. The final issue is, weve got to put business and ethics together. Most people dont keep their promises, business should work in we have a crisis in society we cant talk about this stuff anymore because you cant talk about race or gender or you cant talk about religion. These things are too sensitive and that honestly is the best of a democratic society. Cant figure out how to talk critically about the things that affect all of us. I think its not here for very long. Let me summarize and say five things. Purpose and promise, stay care stakeholders and shareholders. A market institution. People with whole humanity and economic interest in ethics and business. With those altogether, i think we get a different view of business in a different view of the world. We need this leadership, people who lead critical conversations, i just ones. Lectures on will have to lead people to where they need to be. This requires Emotional Intelligence and humility. I think it is best done can address our own values and contribute to others, will have a really good future. And by saying two things. What is the take away . One take away is, are you willing to see the results of your conversations never say this will probably they did, test would be under five errors, is the caption under the picture correct . Didnt work for us in charlottesville so the new test is something i would call the names of my three kids. Chemical at the end of the day and let me because we are not making your organizations, companies and synagogues and mosques, community centers, educational institutions, and to make them places for our children to live in, we got far too long. The second thing comes from one of my favorite musicians, guitar player, Warren Haynes is a great guitarist, leader of government, and of trying to learn by listening on video. It sounds like your basically killing the cat, calling for cap the most pain, just the way it sounds. Im struggling with this and all of a sudden, one stops and says look, you play the blues, it is a matter how many notes he played, he just have to mean the notes he played. My challenge to all of you is to figure out, what are the notes you need to play . In todays world, there is a lot coming at you. There is an awful lot that we dont know. Listen to someone like warren or bb king, a one note pull off in which theres more humanity in that one note and in the 100 others people play. I think its a rule that would do well. Let me stop the turn it back over to david. Thank you. That was great. Fifty copies of your book, in your book, you give a number of concrete examples of companies laying great notes to use your analogy. You share a couple of examples and why you chose the companies that you did. Sure. There are lots of them. Of course there are some that get a lot of press like whole foods. Weve also been led by bobby, a film called ms. Dynamite and fishing with dynamite is about a 70 minute film on the shareholder stakeholder idea. Love the people who comment on including Michael Jensen and others and we pick up three companies, the container store, mediumsize retailer, a company thats fully sustainable. Typical company, their interest in companies. We looked at this business has been in business a very long time and basically embody principles. We look at carmax which is revolutionized the used car industry which used to be icon of unethical behavior. There are lots of others. It is important to note we are not trying to argue any of these Companies Get it right all the time. The old story tells us, you got to think about this like date and senate. Most businesses are just in it for the money. There might be a few that are saints and then when they make a saint, they are just in it for the money. Seems sinners, the hallmark of the old story, oscar wilde told us how to do it. Every saint has a path, every sinner has a future. I dont know many sinners that are sinners all the time and i dont know any saint. As beings, we are going to get some stuff wrong. Every time we get something wrong, i have to go straight to hell, not passing go, it will keep interest. Right. In my on here for the next question . Can you hear me . Okay. So james would like to know, he says to the best of his knowledge, all intro finance textbook except one, theres a purpose, maximize shareholder wealth. What can we do to get finance faculty textbook authors to wake up . I think we will see them waking up in the near future for several reasons. One, the Business Roundtable, the shareholder value stuff doesnt help very much, we need a broader idea about stakeholders. Two, the principles of responsible investment, which theres 9 trillion under management by banks that have signed those. Three, the ceo of letters, the companies, it is not but when it textbook tell Us Technology of how to do stuff and they are important, just dont help you solve problems on how to build a great business. I often ask students most certainly are of the 2020 year reduction when doing their taxable, i cant even imagine people do that anymore. Im more optimistic about this and youre probably the author of the one that doesnt do that,