Help fix broken reputation of business, says Lord Digby Jones

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Lord Digby Jones

Enterprise in the UK is under fire from all corners and only proactive business leaders can turn the tide, argues Lord Digby Jones

Business is getting a bad rap. In the media, and by society at large, the process of wealth creation is often unfairly seen as “an entirely selfish activity carried out by untrustworthy rogues”. Such is the view of Lord Digby Jones of Birmingham – crossbench peer, non-executive director and former both director general of the CBI and government minister – and it has come about, he says, from a fragmentation of the relationship between business, government and society. This “lack of understanding and misrepresentation” of commerce, he writes in new book Fixing Business, is a “shattering crisis” – and the only person who can start the repair job is you.

“What 99 per cent of businesswomen and businessmen do – from the sole trader through to the biggest public company director – is a force for good and they’ve got everything to be proud of,” he tells Director. “But then there are the things elsewhere that aren’t so good, or the bad things that get absolutely exaggerated in the media and crowd out the good. The reputation is broken. But we are where we are – we’ve got to stop bleating and do something about it. The average businessperson could do so much more to fix the reputation of business.”

This could begin right away, he argues, by business owners fostering new relationships within their local communities: “So much more could be done in the education and training space, for example. That is everything from more liaisons with the local primary school, the local secondary school, the local college. It’s not all about apprenticeships, a lot of it is just about saying, ‘Come and have a couple of weeks in business’ – get the parents and teachers in to see what it’s like in business. In other words, it’s nurturing an understanding that men and women who risk their houses to make profit and employ people and pay the tax that supports our society, do not have little red ears, a forked tail and go round laughing manically! They are human beings, they are just the same as everybody else.”

Another quite different issue besieging business has a part to play here too, says Jones – with the blight of late payments from big firms to their smaller suppliers harming the ability of small companies to invest in skills and training. “Bigger businesses will use the phrase ‘creditor stretch’ and say, ‘We can take another 30 days out of these people and keep the money in our bank.’ But big firms must understand they have a responsibility to their supply chain. They have a responsibility to the men and women who are employed by the smaller businesses, and by not paying them on time they’re denuding those enterprises of working capital.

“Of course, one thing we could do about this is make late payment a criminal offence and make it personal, not against the company but against the individual – the finance director or financial controller. But it should simply be a moral responsibility. Get that right and then it’s symbiosis. You can turn and say to the small business: ‘OK, we’ve done our bit, you’ve got your working capital, now what are you doing about taking on one extra youngster from your local school? Get her into an apprenticeship, get her skilled up – you’ve got the money now, because you’re getting paid on time.’”

Lord Digby Jones on a news programme

Businesspeople must help to put its reputation in order

Another area where firms could instantly begin to fix business’s broken reputation, he says, is executive pay. “I was brought up in a cornershop in a suburb of Birmingham, and my dad used to say ‘The three most important things in this shop, son, are the customer, the customer and the customer.’ And I would argue that this holds true today whether you’re a cornershop or a major multinational…

“But consider the frustrated customer of a big telecoms company, for example, who has to wait for half an hour on the phone to a call centre just to find out their problem can’t be resolved. And then, they’re reading a newspaper three months later and learn that this company just made a stonking load of profit and the chief exec has taken home a big bonus. Don’t be surprised if the juxtaposition of those two positions means that people don’t like business any more, they distrust it, they get angry with it, the reputation goes down and it needs fixing.

“I’m capitalist to the core, you will not find a socialist bone in my body, but I get so upset, past being angry, when I hear about BP’s Bob Dudley: the share price drops, the profits go down and yet his executive pay goes up by millions. If I – as a true-blooded capitalist – am saying that is disgraceful, then what is a neutral member of the public going to think? When you see the behaviour of someone taking this money, then what is failure? They will say ‘We’re contractually entitled to it’, but I don’t give a damn. Then we get asked the question: ‘Why do you think the reputation of business is broken?’”

Jones continues relentlessly in this vein in Fixing Business, with discussion ranging from the tax-paying policies of UK-based multinationals, to the challenges that the rise of artificial intelligence and robotics pose for business, to the steps small business leaders can take now to improve their environmental credentials – simultaneously helping to repair the tarnished image of enterprise. In the turbulent era of Brexit and Trump, he argues, it has never been more important for leaders to “stand up and be counted” on behalf of business.

“The most important people in society are those who can provide for the poor, ill and disadvantaged, with healthcare, pensions and benefits,” he says. “Unless they can do that, the poor and the unhealthy don’t get looked after. The people who do that are the people who create the wealth, from which comes employment and tax, from which comes the public sector – and those people are the businesspeople.” 

Lord Digby Jones CV

Born Birmingham

Education Scholarship Bromsgrove School; university cadetship in the Royal Navy (1974–1977); University College London

Early career Over 20 years with Birmingham-based law firm Edge & Ellison, rising to senior partner; KPMG in 1998 as vice chairman, corporate finance

2000–2006 Director general of the CBI; receives knighthood in 2006 for services to business

2006–2007 Holder of senior advisory posts to Deloitte, Barclays Capital, JCB, Ford, Wragge & Co, Thales and others; NED for Alba, i-Clean Systems and Leicester Tigers; adviser to Duke of York

2007–2008 Minister of state for trade and investment; UK skills envoy; made life peer in 2007

2011 First book Fixing Britain: The business of reshaping our nation published

Today Author, speaker and holder of a number of non-exec roles including Triumph Motorcycles, Thatchers Cider, Celixir and Leicester Tigers. Senior advisory roles with Babcock International, Argentex LLP, AON and Unipart

Fixing Business: Making profitable business work for the good of all by Lord Digby Jones is out now, published by Wiley (wiley.com)

To watch Digby Jones offering business advice go to
digbylordjones.com

About author

Chris Maxwell

Chris Maxwell

Director’s editor spent nine years interviewing TV and film stars for Sky before joining the IoD in 2011 and turning the microphone on Britain’s business leaders. Since then he’s grilled everyone from Boris to Branson and, away from work, maintains an unhealthy obsession with lower league football.

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