The Audit Quality Forum has considered a very big question: how can business reduce inequalities? Peter Mandich reports
The latest Audit Quality Forum (AQF) debate began by considering the inequality question from a national and international perspective, reflected in the opening provocation by Lord Blunkett, the former Labour home secretary. He argued that Brexit had highlighted divisions within the UK with many people feeling excluded and voting for change in the hope that it would improve their economic position. Lord Blunkett argued business faced a choice: it could be part of the process of healing and developing a united society that would lead to gains for business, or it could exploit society and face people’s resentment. He spoke about how international trade had reduced inequality globally, but had accelerated inequality within nations, particularly in the developed world.
Lord Blunkett highlighted how his home city of Sheffield has been forced to adapt and change from its reliance on high-quality engineering and steel production, to focus more on academia, the service sector and the developing technology industry. He advocated the importance of the business role in promoting inclusion by pointing out that it was the governor of the Bank of England, Mark Carney, who said that prosperity required that business invest not just in economic capital but also in social capital. Lord Blunkett suggested that one role that business could play would be to offer microcredit in the most deprived neighbourhoods where individuals typically lack collateral, steady employment and a verifiable credit history.
He argued that business plays an inclusive role where it acts ethically, pays its taxes and partners with local organisations that provide social value. Lord Blunkett also called for the definition of ‘profit’ to be broadened so that a company is judged on how it performs over the long term rather than on short-run gains. He described his view as: “Inclusive businesses in an inclusive society, ensuring that there is a raison d’etre of healing and pulling together rather than dividing and exploiting.”
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