Reimagining business: Why we must forge a new social contract

Nearly 400 years ago, during the Age of Enlightenment, political and moral philosophers began contemplating the need for a social contract — one that would establish a civil society and authorise the government to protect the security of citizens in exchange for their natural freedom. This social contract intended to create an alternative to a state of nature that Thomas Hobbes called “solitary, poor, nasty, brutish and short.” Since the mid-17^th century, academics and politicians have tried to refine the scope of government, its limits and its authority over the citizens of the country.

We have reached an inflection point in our history. Today, the dangers created by a multitude of threats — including climate change, nationalism, armed conflict and wealth inequality — are calling for the creation of a new social contract. But rather than form another agreement between the government and its citizens, this contract must be forged between business and society.

Here’s why: In the last 50 years, business has grown and evolved to the point where some corporations have greater reach and influence than many governments. Of course, we should not forget that business creation is at the core of economic growth. In China, for example, poverty rates have dropped significantly in the last four decades — from 840 million people in 1980 to 26 million people today — due to the rapid growth of businesses and economic activity. However, we must recognise that the role of business has moved beyond value creation as companies today have a greater influence on our environment, on the social fabric of our communities, and on information flows around the world, among many other non-economic influences.

Critical to this work is the Hoffmann Global Institute for Business and Society, established this year. The institute has seven research streams that examine tensions surrounding ethics, gender balance, humanitarian operations, social impact, sustainability, tech for good and wealth inequality. Beyond conducting research, the institute is focused on raising awareness about the challenges that the world is facing. Our goal is to shift mindsets so that, for instance, it becomes routine for leaders to consider the societal impact of their actions when making decisions, or it becomes unacceptable for businesses to destroy value for society while creating value for themselves.

While modelling these new norms, we must also bring an open mind and flexible approach to solving the greatest problems of our day. Sometimes, it takes new business models to get to a better place. Sometimes, it takes technological innovation. Other times, we need government intervention. And there are times when we shouldn’t rely on the government for help. There is no single approach that will satisfy every challenge.

Forging a new social contract is an enormous task for the INSEAD community. But it is one that I believe that we are uniquely equipped to tackle. We have more than 57,000 alumni around the globe who believe in the core values of tolerance, diversity and inclusiveness. If we are not the ones to model a new set of norms, then who will? And if we do not set forth on this journey now, then when will we?

The time is now. And so, I urge all of you, as INSEAD alumni, students, colleagues and friends: Please join me on this ambitious project to change social norms and advance business as a force for good. The world can’t wait, and neither can we.