The because the word and, simply and the most powerful word in our language. Lets find out why in the power of and, responsible witness without tradeoff. Inc. Is to much for having m me. It is a real treat to be back, even if only virtually. Many years ago in a fit of youthful idealism, as david mentioned, i got a phd in philosophy. That was great. My father was always terrific pretty said well you will never have to worry about a job because i just open a bunch of philosophy factories. You will be fine. I got very lucky for the postdoc at wharton and ive always tied to business goals. I want to recapture today if i can on the sense of optimism and idealism in the shadows of awful pandemic and there really devastation that has occurred in the world. In many communities. I still remain incredibly optimistic that we are going to find our way out of it. That we are going to find our way to racial justice. And we are going to build a better world. Which is what all of us i think would like to do. I want to focus on the debates which exists about ethics and capitalism. Theres an old story about business not just in the u. S. And you know the old story its about the money. Its about profits. Vlasic was a 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. That whole story may have been useful at some point. But its not very useful, its not very useful anymore. The idea that making money and profits shareholders is all that matters. The idea that business not trying to do each other in. And people only worry about their shortterm economic self interest. When i tell somebody i teach Business Ethics people have to manage not to laugh or make jokes theoretical subject and if you have a new and put them in the chat ever since the Global Financial crisis, we have seen an increase thought about business or capitalism would be different. Im kind of a modernday adam smith he did write a lot about ethics that most people dont read. I see an increase the call for reform the first proms are called the 70 problem that comes from these studies that look at and engage some people are engaged with her work produced 70 number was found on the uss higher in many places of the world. Its lower in a few places like singapore and others. It says 70 of people are unengaged, and i love this, or actively unengaged in their job jobs. Now if you are unengaged, you just dont care. If you are actively unengaged, i guess you would show up every day and kind of take the place down. So that is a real problem i think. I real practical problem. Maybe they all like to think its better some will say well we got to work on that there is a standard issue, its been there long time about trust in business and Business Executives is fairly low missing studies around 20 . People trust business less nitrous doctors. Less nitrous lawyers which hurts for some of us. The only group the only thing is politicians and ill let you decide or not it seems not to me still dealing with the aftermath from the financial crisis along comes the covid pandemic. Along comes the movement catalyzed by black lives matter. Business is not immune to any of these things. It has a part to play but we are not going to solve these problems with more of the wrong thing. Not to solve these problems to maximize shareholder values were not going to solve these problems by seeing business as just a bunch of greedy little trying to do each other in out competing each other. Always acting in the shortterm self interest. But when he is a new narrative. A new story of business. A new way to think about this. We need a new conceptualization of this. Now the good news, since i painted that is a fairly dark beginning, the good news is this is happening in the world. And it is easy to forget about. Think about the incredible interest. It started in the 60s. We have seen an incredible renewal interest in Corporate Responsibility and sustainability. We have seen social entrepreneurship come forward. We have seen organizations like just a capital. Like inclusive capitalism. Like richard brands group whose name i always forget. Like the grin impact investing. Conscious capitalism and socially responsible for capitalism. All of these movements and theyre all founded on real companies. Undoing the business in a different way. I was at a meeting in the white house in the waning days of the obama administration. The main port of the meeting was what was the right brand . And what could government in particular the department of labor, what could they do to encourage this movement . But whats the right brand . How did this get branded . Wouldnt it be better if we all sort of pull together under one brand . After sitting there for a while i began to think that maybe its the wrong question. Or a different question. A be 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, bobby parr mark sort of my colleague with Kristen Martin was a chair professor at notre dame. We decided to write the power of and, responsible business without tradeoff. And suggest key areas key principles five key ideas and maybe there are six or seven. We focused on they are connecte connected. Thinking of the old story i want to just briefly we can focus on any of them that you want to. The first one says look, we need to think about, still surrogates idea purpose wrong. The purpose of business is to make as much money as you can. Now look, i need red blood cells to live. But it does not 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 still had a fun weekend a few years ago, got my hips replaced. That was not a fun weekend. I had to focus on making red blood cells. It is not the purpose of my life even of that is what i had to d do. Business must have a profits. The idea that profits are bad or profits are evil is the same make us like red blood cells are evil. No, youve got to have them to live. Im a little bit of a musician we got a saying everybodys gotta get paid. It does not matter if your forprofit or notforprofit. Youve got to get paid and invest in the future. So profits are necessary. But that is not the purpose of a business. With an entrepreneur that starts a business and i have a student salmon to start something to make a lot of money i said you better get a job. Because youve got a better chance of getting a job than you do starting something. Entrepreneurs start a business because they have a purpose, they have a vision. They want to bring something into being. Purpose is what activates business ideas. Profits follow from purpose. And they are not, themselves the purpose of business. They are an outcome. Its a little bit like some of you i know people who spend a lot of their time focusing on being happy. Everything they do is about being happy. You got to be happy et cetera. These are the most miserable people on the planet. Because they dont understand that happiness is an outcome. It is an outcome of what your relationships are. What you are doing with your life. What your purposes. Profits of the same way. Profits are simply an outcome of how you make your purpose real. What are the ways that you create value for your stakeholders. So you need purpose and profits. Its not just profit. The second point is no surprise to any of you who are familiar, since the late 70s have written about this idea of stakeholders. I just thought thats how business works. Look, even on a dirt farm in georgia we knew you had to deal with the folks who could affect you. And that you could affect. That seems like completes common sense to me. Always has. Ive never understood why people thought that was a radical idea. But honestly even an interesting idea. I thought there were some interesting ideas than old book i wrote about how Strategic Management of stakeholders. But i do think the stakeholder idea was the most interesting one. I did not realize how embedded the old story was in our minds. How much, what my practice friends would say we are in the grip of that old story. Its a group we need to break. Every business has always and will always create an communities and the people with money building a business means getting these things going in the same direction. Even if you are the most staunch freedman nights in the world. And all you care about is shareholder value. How are you going to do it . This great products or customers you supplies to make you better. You going to have employees who are engaged. Going to have communities who want you there if you do that and are lucky you might make some money. And so seeing stakeholders versus shareholders these are interdependent. You cannot look at them as one versus another. The second thing to notice here is that thinking about stakeholders is a fundamentally different way most people want to think about business. Because you have to think about them in relational terms. Think about a stakeholder relationship. Relationship is very different than a transaction. Transactions are a one off things that might be repeated. But relationships endure over time. You expect them to continue. And, lease and personal relationships we try not to keep score. My wife and i have been married for 43 years. She is the reason i went to wharton in the first place. im very certain what the outcome of that would be since she is a Second Degree black belt in taiwan dough. Wouldnt about be for me. Relationships you dont have to keep score. Push comes to shove you help each other. But thats how business works. Its not just this transactional thing. Some parts of business that are like that but for the most part, to build a Great Company you build a set of relationships, and so its purpose and profits that stakeholders and share holders. Business doesnt exist in this world imagined by economists. Thats a pretty good story where its perfect competition, only market forces, all information is contained in the price, et cetera, et cetera. We know how that story goes. Business in the real world is connected with other societal institutions, and we as actors with businesses, we are at once consumers, thats sometimes employees, citizens, parents, partners, patients, and its very hart to separate out one institution from another. We need to see business as connected in society with these other institutions, and to try and understand how business can partner with them if you like, to improve our society. This is also true if we think about we call this this business imbeddedness. Business it imbedded in the physical world. We cant one thing we know we account forget out our intangible resources buzz our tangible resources and think about what is sustainability means, how business can be connected to lots of other societial institutions is a problem. Its a problem especially today in the u. S. And other places in the world because of crony capitalism, because of some businesses in cahoots we people in government to make special deals for themselves. Here in the cases not letting markets work enough and not seeing business as a part of society, but, rather, im doing this just to make as much money as i can. We need, if were going to solve problems like global warming, we really need people to start businesses and use their creative imagination, but fourth principle called the human complexity principle and the idea behind the complexity principle is that were not one dim meaningsal maximizers of shortterm selfinterests. There are people like that. We call them socialow paths. Sociopaths and for the most part we elect them to political offices. I just want to say completely nonpartisan statement coming from me. Human beings what are human beings . We can be selfish, of course. We can be incredibly other regarding. Anybody who has ever been in love or anyone who has ever had a child knows that this idea of focusing on 0 rational self and interests is just a logic mistake. Thats not what human beings are. Often said what a human being is could be illustrated by this iphone i have here. Think of the vote cack vocabularies we have to invent to get to iphones. Have to invent the terms, the problems, the issues. We had continue vent 0 vocabulary about about glass, he this physics that win on the inside. What a human being is, is a set of folks what a human being is a creature who can invent vocabularies to solve problems or to actually realize those solutions. Thats what business does. And its time that we recognize that. Business works because we can Work Together to create something, that no one of us can create alone. Its not the urge to compete that is so important for capitalism. Its the urge to create to be a part of the self, to Work Together in relationships with others. Thats what makes capitalism work, and its high time that we recognize that, as david said. There are a lot of examples of companies that are doing this, and thats the this is eds wish list of the way the world was. The way the world should be, its now my wish list. What im trying to argue is this is actually happening in the world. But with such the grip of the old story that sometimes we dont see it. The final issue is we have to put business and ethics together. Most people tell the truth and keep their promises. Business shouldnt work if they didnt. We have a crisis in society that we cant talk about this stuff anymore because you cant talk but race or gender or you cant talk but religion, these things are too sensitive, et cetera. And that honestly is the death knell of a Democratic Society. I we cant figure out how to talk critically but the things that affect all of us that Democratic Society i think is not here for very long. So, let me just summarize and say, five things. Purpose and profits, staining hold e holders and shareholed, business as a societial indisposition market institution. People with full humanity and economic interests and ethics and business, and if we put those five things together, i think we get a very different view of business and a different view of the world. We need moral leadership. We need people who lead critical conversations, not righteous one. No lectures on morality. We have to take people where they are and lead them to where they need to be. This requires i believe incredible emotional intelligence, requires humanity, and i think its best done with a good dose of humor. If we can address our own values, our own authenticity and contribute to others, were going to have rally good future. Let me end by saying two things. People whats the takeaway . So one takeaway is are you willing to see the results of your conversations in the newspaper . People always say, new york times, washington post. They never say Charlottesville Daily progress because if they did the test would be are there at least five factual errors, is the caption under the picture correct . And you have a vague idea you read this two days before somewhere else. So the newspaper test doesnt work for news tinily little charlottesville. So we had to invent a new one and the new test is something i would call the ben, emma and molly test, my three kids. Can i go home at the end of the day and say to ben, emma and molly, let me tell you what i did today that im proud of, that it want you to learn from. Pause if were not making our becauser wife nor making organizations, companies, synagogues and mosques, community centers, our educational institutions, not make them not trying to make them places for our children to live in, we have the bar too low. The second thing is comes from one of my favorite musicians, guitar player named Warren Haynes. He is a great blues guitarist, the leader of government mules, played with the allman brothers and im trying to thrown my slide guitar. Sounds like youre basically killing the cat, and that you are doing it to calls the cat the cause the cat the most pain possible. Just the way it sounds. So im struggling with this and all of a sudden Warren Haynes stops and says, look, when you play the blues, it doesnt really matter how many notes you play. You just have to mean the notes that you play. My challenge to all of you is to figure out what are the notes that you mean to play, because in todays world, theres a lot comping at you. Theres an awful lot that we dont know. Listening to someone like Warren Haynes or bb king, play that onenote pulloff in which theres more humanity in that one note than in the hundred others that people can play, is a rule that would do us well. Let me stop there and turn it back over to david. Thank you so much. That was great. We are ralphing off 50 copies of your book, and in your book you give a number of concrete examples of companies that are playing great notes, to use your analogy. Could you share with us a couple of examples and why you chose the companies you chose . Well, sure. There are lots of them. Of course theres some that get a lot of press, like whole foods. We have also done led by bobby and jinny, a film called fishing with dynamite and that is about a 70minute film on the shear haledderen sophisticateholder idea. And a lot of stakeholder idea and there are three companies we picked out. The Container Store as a medium size retailer, lukes lobster, Startup Company that is fully sustainable back through the fishing in maine, and a chemical company, eastman chemical, in tennessee. And those are pretty interesting companies. We looked at new york life, which has been in business for a very long time, and they have basically embodied the principles. We look at car max, which is revolutionized the used car industry which used to be the car max used the used car salesman used to be the icon of unethical behavior, and there are a lot of others. Eight important to note we are not trying to argue that any of these Companies Get it right all the time. The old story tells us, look, you have to think about these like saints and sinners. Most businesses, theyre sinners. Theyre just in it for the money. Middle east be a few that are saints might be a few that are saints and when the saints make a mistake, see, theyre just in it for the money. The saints and sinners thinking this hallmark of the old story hatnt called. Oscar wilde says every saints got a past, every sinners got a future. I dont know many sinners that are sinners all the time. And i certainly dont know any saints, as human beings, we are going to get some stuff wrong. And if every time we get something wrong i have to good straight to