As part of France’s presidency of the G7 in 2019, the "Rendez-vous de Bercy" organized by the Ministry of Economy and Finance yesterday brought together decision makers, academics and business leaders around the theme "Redefining capitalism in the 21st century". Following the debate "Faced with inequality, what role should businesses play in society?" Antoine Frérot, Veolia’s Chairman and CEO, presented his vision of business.
Antoine Frérot believes the paradigm of businesses now needs to change.
Historically, capitalism was initially built on a patrimonial model: the person that created the business also headed it. From the beginning of the 20th century, a managerial model dominated in which businesses were being run by professional managers. In the 1970s, this model gave way to a shareholder vision, in which a business’ main goal is making a profit: "businesses are useful because they prosper"
This shareholder vision has now reached its limits for 2 reasons:
- A large section of the population in France and elsewhere see businesses as creating wealth for the few and not creating prosperity for everyone;
- At the same time, society is now facing new social and environmental issues: inequality, the consequences of globalization on the territories, the younger generation’s new expectations as regards work... Businesses have a contribution to make in responding to these issues, otherwise their usefulness will be called into question even more.
Businesses have several goals and so multiple performances. It is a question of defining, measuring, combining and optimizing them. In the coming years it will therefore be necessary to define the decision making bodies that will balance the different criteria.