Inclusive Innovation: A Conversation About the Future of Finance
By Jo Mackness, Executive Director, Center for Responsible Business (MBA ‘04)
More than three years from its most serious crisis in decades, the global banking and financial services sector still faces an uncertain future. Its central role to economies worldwide makes it one of the most critical influences on economic recovery and social progress—one reason why its role in society has led to division and discord. Since the crisis, stakeholders seeking to influence how the financial sector operates and is structured have joined the debate on all sides.
As a follow-up to a report we recently published with research partner GlobeScan, we hosted an event last week in lower Manhattan to discuss “The Future of Finance”.
What does it mean to be responsible, inclusive, and sustainable in the financial services sector? This topic, which makes regular appearances in the press these days, was the primary focus as 75 professionals and MBA students gathered to hear Berkeley-Haas Dean Rich Lyons moderate an engaging and enlightening conversation with three companies that are leading “inclusive innovation” from three very different corners of the financial serves sector. Panelists envisioned a future where stakeholder perspectives are taken into account more widely than they are today, delivering value not only to the firm’s bottom line but also to society more broadly (think: servicing the “unbanked”, financing access to medicine in emerging markets and creating programs that prevent domestic foreclosures).
To panelist Peter Knight, President and Co-Founder (alongside Al Gore and David Blood) of the investment management firm Generation, “staying humble” is the key to embracing inclusive innovation and shared value. Citing the fact that the holding period for stocks has diminished from seven years to just seven months, Peter also stressed the importance of moving beyond living quarter-to-quarter.
To panelist Tarrus Richardson, founder of private equity firm IMB Development Corporation which invests in mid-size women- and minority-owned companies, economic empowerment was of the utmost importance in this conversation. Tarrus emphasized that in addition to stripping carbon from the air as part of the corporate sustainability agenda, companies mustn’t overlook their potential to deliver economic and social value to our increasingly diverse communities. With purchasing power of women and minorities in the US adding up to nearly 70% of the total, and credit afforded to this same group flatlining at just 2% (while it rises for all other groups), Tarrus challenged the audience of seasoned finance professionals and prospective MBA students to do “big things in big ways”.
The final perspective, from panelist Pam Flaherty, CEO of Citi Foundation and Director of Corporate Citizenship at Citi, emphasized the value that executive-level leadership can play in creating an environment in which inclusive innovations can flourish. She highlighted the leadership of Citi’s CEO Vikram Pandit, which has led the company’s unwavering focus on staying true to the basic functions of banking and serving the true interests of customers above all else.
Ironically, these words of wisdom graced the audience just hours before Gregg Smith’s now famous “Why I am Leaving Goldman Sachs” Op-Ed piece went live , calling into question the firm’s culture, leadership practices and uninclusive client focus.
The evening concluded with some inspired words that align with Dean Lyons’ concept of path-bending leadership and Berkeley-Haas’ defining principles: question the status quo, student always, confidence without attitude and beyond yourself. Noting the central role that sustainability is and will continue to play in driving economic development in the coming decades, Peter encouraged the audience by reminding them that “you don’t have to give up value for values” while Tarrus offered that if we all spent just 10% of our time and money giving back to things that matter, the world would be in a very different place. Words to live by…