Australian businesses need to rediscover their purpose if they are to have any hope of navigating the complex social and economic environment they now find themselves in.

This was the key theme delivered by chief executive of the Business Council of Australia, Jennifer Westacott AO at Aon’s Advanced Risk Conference 2018 in Melbourne.

Westacott contended that amongst the many climatic and geopolitical risks that exist in the world today, the greatest risk faced by businesses in Australia today was an ideological pushback from the community. The resultant potential to generate regulatory responses that would inevitably destroy shareholder value.

“Purpose is not return on equity,” she said. “Purpose is not just the financial metrics.”

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“Companies need to build an innate understanding of their customers; and an innate understanding of how the community perceives them,” Westacott said.

Westacott said those organisations that lost their sense of purpose often began to focus on factors that were beyond their control, and instead needed to be clearly focused on their customers and how they were perceived in the community.

Those companies that did not focus on building community trust, reputation and good governance would create fertile ground for popularist and protectionist ideologies, and bad policies that would flow from them. Organisations must double down on core business and look beyond short-term profits to earn community trust.

Westacott contended that community responsibility and corporate success were not incompatible but suggested also that businesses needed to become better at resolving these two goals.

She also said that businesses that failed to take risks were – ironically – placing themselves in great peril, as risk was essential when making investments that would enable future success, such as developing new markets. Those that failed to take risks would be left behind and managing those risks could be greatly facilitated by ensuring the organisation was better focused on its core purpose.

And while she acknowledged that economies needed to become more resilient to deal with shocks and disruptions, this did not mean running for cover. From a government perspective this meant focusing on policies that that gave business the flexibility and capacity to grasp opportunities and quickly deal with challenges, starting with a fairer and more competitive tax system, while creating an open, agile, innovative economy with a lower cost of doing business.

This would also be essential as business and society embraced new technologies which would bring their own shocks to business. Westacott stressed that business had a responsibility to be transparent with staff and teams regarding the impact of technology on jobs, and be utterly and totally honest with customers about how data will be used, stored and moved around.

While government could not risk putting up barriers to protect jobs, it could work to protect the skills and capabilities of citizens by creating one of the best education and training systems in the world – giving people the capacity to retrain and reskill.

“Those are the policies that will give us the resilience, the adaptation capability and the ability to withstand shocks that all companies need to think about,” Westacott said

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