Capitalism must 'reform and rewire' to survive

(Edmonton) Short-sighted CEOs obsessed with quarterly results and pleasing shareholders need to “reform and rewire” to gain public trust and better serve society, says the University of Alberta’s newest honorary doctor of laws.

Charles Hantho, a U of A chemical engineering alumnus with a 35-year business career in the Canadian manufacturing sector, said public trust in capitalism is at an all-time low due to greed, bad management or bad governance exemplified by the financial meltdown. Business leaders need to think and act differently, especially when it comes to sustainability and the environment.

“Individuals with the scientific, technological and problem-solving skills that you have acquired over your years at the U of A are ideally suited to playing a leadership role in addressing these pressing issues,” Hantho told the graduands, upon receiving an honorary doctor of laws degree Nov. 20.

Hantho, whose career achievements included serving as CEO of Canadian Industries Ltd. among other manufacturing companies, said business must serve more than shareholders—it must also serve employees, suppliers, customers, communities and the environment. This “multi-stakeholder model” has been employed with success by companies like the health-care consumer product manufacturer Unilever, which has created a 10-year plan for sustainable growth.

“This plan applies across the entire value chain, taking responsibility for their suppliers, distributors and, crucially, how the ultimate consumers use their products,” he said. “Sustainability is at the heart of their business model.”

Closer to home, oilsands and pipeline companies are deeply enmeshed in debates and perception about environmental sustainability and safety—issues of vital importance to the economy, he said.

Hantho noted that enlightened companies think proactively about these issues and incorporate strategies into their business model to gain a competitive advantage. He also urged graduands to demand that kind of leadership and innovation when entering the workforce.

“I’ve had the good fortune to be involved with companies with very high standards of business ethics, and where concern for employees, health and safety, the environment and the welfare of communities in which they operated were paramount,” he said. “They were not perfect, but they all had a built-in culture of doing the right things for the long-term success of the business.”