The World Economic Forum - Davos 2020

[Orphia Nay]

The World Economic Forum meets this year from 21 January to 24 January 2020 at Davos-Klosters, Switzerland.

The WEF was founded in 1970.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum has written a new Davos Manifesto to coincide with the WEF's 50th anniversary:

"The World Economic Forum is releasing a new Davos Manifesto (the original was written in 1973), which states that companies should pay their fair share of taxes, show zero tolerance for corruption, uphold human rights throughout their global supply chains, and advocate for a level playing field."

https://www.weforum.org/agenda/2019...-company-in-the-fourth-industrial-revolution/

I'll quote just the first sentence of each paragraph.

Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution

A. The purpose of a company is to engage all its stakeholders in shared and sustained value creation.

i. A company serves its customers by providing a value proposition that best meets their needs.

ii. A company treats its people with dignity and respect.

iii. A company considers its suppliers as true partners in value creation.

iv. A company serves society at large through its activities, supports the communities in which it works, and pays its fair share of taxes.

v. A company provides its shareholders with a return on investment that takes into account the incurred entrepreneurial risks and the need for continuous innovation and sustained investments.


B. A company is more than an economic unit generating wealth.


C. A company that has a multinational scope of activities not only serves all those stakeholders who are directly engaged, but acts itself as a stakeholder – together with governments and civil society – of our global future.


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I thought we could use a thread to keep an ear out for news.

 

[Orphia Nay]

And here is the original 1973 Davos Manifesto:

https://www.weforum.org/agenda/2019/12/davos-manifesto-1973-a-code-of-ethics-for-business-leaders

Its last paragraph:

"C. The management can achieve the above objectives through the economic enterprise for which it is responsible. For this reason, it is important to ensure the long-term existence of the enterprise. The long-term existence cannot be ensured without sufficient profitability. Thus, profitability is the necessary means to enable the management to serve its clients, shareholders, employees and society."


Discuss.

 

[Orphia Nay]

It starts on Tuesday 21 January.

Schedule:

https://registration.unglobalcompact.org/website/8745/schedule/

 

[Tippit]

And here is the original 1973 Davos Manifesto:

https://www.weforum.org/agenda/2019/12/davos-manifesto-1973-a-code-of-ethics-for-business-leaders

Its last paragraph:

"C. The management can achieve the above objectives through the economic enterprise for which it is responsible. For this reason, it is important to ensure the long-term existence of the enterprise. The long-term existence cannot be ensured without sufficient profitability. Thus, profitability is the necessary means to enable the management to serve its clients, shareholders, employees and society."

I am generally anti-corporate, don't subscribe to the idea of "corporate personhood", and I don't think corporations (at least in their current state) should be synonymous with capitalism. But I've studied equity valuation, and I learned (and agree with the concept) that the shareholder is the only balanced stakeholder claim. Suppliers would overcharge the enterprise and bankrupt it. Consumers would underpay the enterprise and bankrupt it. Unions would overcharge the enterprise for labor and bankrupt it. However, if the shareholder neglects any of these other stakeholders, the business will suffer. The shareholder has to balance their desire to profit with the knowledge that abusing any of the other stakeholders will undercut that aim, at least long term. This doesn't mean that externalizing environmental costs, not paying their fair share of taxes, or abusing employees should be incentivized or allowed, it just means that owners of a business have a balanced claim versus everyone else.

The idea that enterprises should treat other stakeholders equally as shareholders is a rather novel, and ridiculous concept, in my opinion. It's gaining a lot of traction these days, however. The big problem is wealth condensation, which is the result of a concentration of shares in fewer and fewer hands due to other reasons, not any specific problem with shareholders in general.

 

[Orphia Nay]

I am generally anti-corporate, don't subscribe to the idea of "corporate personhood", and I don't think corporations (at least in their current state) should be synonymous with capitalism. But I've studied equity valuation, and I learned (and agree with the concept) that the shareholder is the only balanced stakeholder claim. Suppliers would overcharge the enterprise and bankrupt it. Consumers would underpay the enterprise and bankrupt it. Unions would overcharge the enterprise for labor and bankrupt it. However, if the shareholder neglects any of these other stakeholders, the business will suffer. The shareholder has to balance their desire to profit with the knowledge that abusing any of the other stakeholders will undercut that aim, at least long term. This doesn't mean that externalizing environmental costs, not paying their fair share of taxes, or abusing employees should be incentivized or allowed, it just means that owners of a business have a balanced claim versus everyone else.

Wow, nice explanation.

The idea that enterprises should treat other stakeholders equally as shareholders is a rather novel, and ridiculous concept, in my opinion. It's gaining a lot of traction these days, however. The big problem is wealth condensation, which is the result of a concentration of shares in fewer and fewer hands due to other reasons, not any specific problem with shareholders in general.

I think in a Circular Economy (CE), wealth condensation is less wealth for each person over all demographics, by the interconnectedness of the sharing methods of CE. (Reuse, repair, regenerate, recycle, refer, etc).

We've seen it already. The big corporations are all heavily in transitioning to sustainable systems, while trying to retain current customers and sales.

Facebook and Twitter are using smaller companies to do research and compliance and oversight.

Big companies here like the supermarkets Coles and Woolworths are using smaller companies such as Glad to make compostable plastic food wrap, which can be recycled by Terracycle.

That sort of thing.

 

[psionl0]

I am generally anti-corporate, don't subscribe to the idea of "corporate personhood", and I don't think corporations (at least in their current state) should be synonymous with capitalism.

That depends on what you mean by "corporate personhood".

The idea of a separate legal entity that can enter into contracts, own property, be taxed, sue and be sued is a very useful one. It minimally means that you can invest in a business without putting everything you own on the line. It also prevents buck passing when you are trying to sue the business for something. (The fact that the Roman Catholic Church is not considered a legal entity has made it difficult to hold the church accountable for the wayward behaviour of individual priests).

It is when we subscribe to the idea that these corporations have other human rights that are guaranteed by the constitution that things get silly. Allowing corporations to get so big and powerful that they can bully governments is also unwise. Such corporations don't have to care about what puny humans put into a manifesto like this one.