Episode: 1: David Logan

The Quakers in Business podcast will launch in May 2020. If you are interested in learning more, please contact podcast host Andrew Gray at qibpodcast@friendsjournal.org.

Here is a preview of the series, our interview with David Logan, a British Friend who has worked for almost 40 years on corporate responsibility and sustainability consulting.


David Logan

Transcript

Andrew Gray Hello, and welcome to the Quakers in Business podcast with me, Andrew Gray. I’m a Quaker. I’m an entrepreneur. And I’m here in the Penn Club in London, central London. With me I have David Logan.

And in the Penn Club, there are lots of people going between the rooms. We have traffic behind us. We have drilling. But this is what Quakers should do. We should be in the heart of what’s going on, interacting with the environment.

The point of the business podcast, this Quaker business podcast, is to nudge Quakers and attenders and Quaker sympathizers and anyone really towards a more gentle, kinder vision of capitalism. Not too long ago, ladies and gentlemen, I hope you agree that us Quakers, we dominated business. But where are we now?

I suspect we actually do still have a huge impact in business, but yet we don’t talk about it. Today I have with me a very well-known gentleman who has just written a book. His name is David Logan. Good afternoon, David. How are you?

David Logan Afternoon. I’m fine. Thank you, Andrew.

Andrew Gray David, I’ve taken these notes from what I could scour online in part from the book which you have just released, entitled Corporate Citizenship. I think you—if I can understand it, you went to some Methodist school in Manchester, originally from Nottingham. You got a master’s in philosophy, a diploma in higher education. It goes on.

You are an associate fellow at the Doughty Centre for Corporate Responsibility at Cranfield University. You’re a member of Quakers and Business. You’re involved in life and your local meeting. David, have I missed anything out about who you are so far?

David Logan No. That’ll do for the purposes of our conversation today. And it is important for people to understand I’m an attender at the Herstmonceux Meeting. And I do read widely about Quaker history and Quaker theory, Quaker practice. And I’m not a lifelong Quaker. I came to it rather late in life. But I’m very comfortable in the Quaker tradition.

Andrew Gray Thank you for that clarification. Now, David, would you just tell us about your business at the moment? And then we’ll go to your book in due course. What’s the name of the business? And how many people do you have? Where is it based?

David Logan Yes. The business I have, I’ve helped to create with my colleagues, it’s called Corporate Citizenship. It’s headquartered in London with offices in New York, San Francisco, Chile, Singapore, and Melbourne. We turn over about six million pounds a year [about 7.8 million US dollars]. We have about 60 staff.

Our core business offer is to work with companies, usually larger companies, not entirely, exclusively larger companies—but to work with companies around the economic, social, environmental, and ethical dimension of their business practices and decisions. So we’re very involved in the global economy, not just the European and the UK economy, but the global economy as it evolves and changes in the post-communist period. We’re very involved in helping companies face up to those additional dilemmas they have around how they conduct their business in the world.

Andrew Gray Thank you. And when did you set up and establish this business?

David Logan Well, the formal company was incorporated over 20 years ago. I had spent some time as a sole trader—six, seven years—working on corporate responsibility issues. And I realized that I was never going to get the big, juicy, interesting contracts unless I had a proper business, a proper firm.

And I went into business with a colleague, a man called Michael Tuffrey. He had skills which complemented mine. And the pair of us started a business off. And we grew it quite successfully. We were subsequently bought by Chime, the British advertising and public affairs and public relations agency, and merged with their small business, smallish business by their standards, called the SMART Company. And we became a larger, integrated business.

And we did that for a number of reasons, one of which was this whole idea of social responsibility of business has moved out of the executive office and into the marketplace. Consumers are interested. And we wanted to be alongside people who knew how to interact with consumers.

Because throughout my career, I’ve generally worked for the executive office, who have approached corporate responsibility based on the ethics and values of the business or its owners. And while that’s a very good thing, it’s not necessarily clued in or in any way connected with the marketplace. And I think what we’ve seen in the past 30, 40 years is a growing demand within the marketplace for corporate responsibility and sustainability.

Andrew Gray And was your motivation setting out—was it the Ferrari, the big house in the country? Or was it pushing society in a particular way? What was it, David?

David Logan Yeah. And I think this is a good question. Why do entrepreneurs do what they do? And it certainly was not the Ferrari. It was my business partner, who’s a trained accountant, who said we should have a properly constituted company. Then who knows? One day, we might be able to sell it.

And I thought he was bonkers. I thought, no, we’d never be able to sell this. We’re doing this because it’s a good thing to do or to make a living. We were not looking to build a great empire or make a fortune selling the business. All that sort of came subsequently. And I think you find—and I think this is part of the Quaker heritage—if you go out and do the right thing, then you find that paradoxically wealth comes to you.

Andrew Gray I agree. That’s been my discovery this last seven years. And it was a nice discovery. I didn’t think it would be that. You’ve written a recent book, this Corporate Citizenship, which is available on Amazon, and I’m sure other good booksellers and probably more ethical booksellers than that.

And my understanding is it’s your life’s work—sorry, I’ll explain again—it’s how you explain to your colleagues and people who are joining your business how the business ticks over, how it functions. Would you explain, if you can, in 200 words, into this bite-sized podcast?

David Logan Well, we never used to talk about corporate responsibility when I was young. Because we weren’t going to have corporations. I grew up in a mining town up North. And we were socialists. And the government was going to do it all.

And when the youngsters come into the office, I say, “Look, what we’re doing here is inventing, or indeed reinventing, a tradition of private enterprises showing voluntary responsibility around key issues.” Because the law doesn’t cover everything. Law is very conservative. It tends to come later.

Good businesses are already thinking about and practicing positive economic policies, positive social policies, and positive environmental policies. And our business is about helping those businesses. People say to me, “Oh, you’re converting these businesses.” On the whole, we’re not. We’re working with people who want solutions and don’t have capacity in-house to generate them.

So we work with them about how—what is a solution for a socially responsible business in palm oil, in petroleum in Africa, in aluminum mining in India? Those are my last three big clients. And the people who run the businesses are very tightly focused.

This was one of the things that Marx said that I always agreed with: that if you spend your life tightly focused on a narrow range of activities, you don’t develop as a human being. He called it “the integrated man.” He said you should do a bit of art. You should do a bit of manual work. You should do a bit of industrial work.

Because, that way, you’ll develop as a human being. We, in our business, are working with people who’ve had terribly intense, narrow focuses on their business objectives to broaden their perspective to see the wider ethical, social, environmental, and economic implications of their business decisions. And fortunately, quite a lot, not all, are very happy to take that sort of advice.

Andrew Gray Would it be a dereliction of a director’s duties to focus on the CSR [corporate social responsibility] side of the business rather than the bottom line—which surely the job of the director is to produce maximum return for the shareholders?

David Logan Well, Andrew, you’ve raised a point I have long debates about with my young colleagues. They’re taught in university that the purpose of business is to maximize profits. After all, Karl Marx said it. And Milton Friedman said it. And Joseph Stiglitz says it. I heard him say it in New York and thought, who am I, a mere MA in philosophy, to challenge a Nobel Prize winner in economics?

Because I don’t think the businesses I work with are profit-maximizing. They’re long-term profit optimizers. If you say the purpose of business is purely to maximize profits, then you can forget social responsibility. But if you accept the reality which you experience with a company like Cadbury, it didn’t get to be over 125 years old by being a short-term profit maximizer.

Even in my small business, I know how to maximize. But we don’t do it because we’re constrained by a sense of obligation to our stakeholders and our role in society. Maximization does occur in capitalism. It’d be foolish to deny it. But it’s not what drives a Unilever or a Vodafone or a GSK [GlaxoSmithKline]. It is optimizing that they go for. And that allows for a debate about responsible behavior.

Andrew Gray Changing tacks somewhat, David, why have Quaker businesses, some of the ones that you’ve mentioned already—why have they declined, do you think?

David Logan Well, the prior question is, why did they emerge? And we’ll always get the sociological argument that, because of the Test Acts, nonconformists and Catholics were disbarred from Oxford and Cambridge and from holding commissions in the Army and being part of the establishment. So the Quakers, being highly literate and numerate people, went into business. Now, personally, I think, yes, that makes sense to me.

But there’s more to it than that. I recently worked with a general engineer in India who was running an aluminum plant. And as I sat talking to him, behind him was a poster on the wall with a picture of Gandhi. And at the bottom, it said, “Work is worship.”

Because I think—there’s no question in my mind that Protestantism and the Protestant sects in particular changed the relationship between the individual and the profit motive and money. And in doing that, they had this idea that by doing a good business—and the Quakers tended to focus on what they called the innocent trades. They didn’t make cannons and bayonets and things like that. They made chocolate and innocent trades. And chocolate was made by the Cadburys as an alternative drink for women instead of alcohol.

They had a sense that, with business, you can affect people’s lives. You can create employment for people. And you can exercise your divine calling to behave well to people. Because when you create a business, you take power. And you exercise power. And I think the Quakers, the early Quakers, saw business not just as a route to an income, but as a way of giving testimony to God’s power in creating a better society.

Andrew Gray But why, though—

David Logan Have they declined?

Andrew Gray The decline, yes.

David Logan Well, that’s—why have they declined? Well—

Andrew Gray You may not know the answer. You can dodge it if you wish.

David Logan No. I would love to hear from other Quakers what they think. But Quakers and Business used to be an organization for Quaker businesspeople to meet together to work out their responses to the big issues of the day. And they could then live those responses within their businesses.

Why have they declined? I think today we’ve come through a long period of socialism, where the idea since 1917 until the fall of the Berlin Wall was to grow the state. And the state was going to do everything.

When I worked for the Trades Union Congress, we wanted to nationalize the banks. We’d already got British Steel, British Coal, British Gas, British Airways. We wanted to nationalize the banks. And we didn’t particularly want not-for-profits and charities. Because they were a sign of the state failing to do its job. And we were the most milk-and-water socialists in the Western world.

But that overhang has meant that, well, if you want to serve society instead of serving profit, go into public employment or not-for-profit employment. Because not-for-profits and the public sector serve people. Business serves profit. And therefore, it’s not as attractive a proposition to young people as I think it ought to be. Because business also serves society.

Andrew Gray Before we started recording this podcast, you were telling me that only 16 percent of workers, I think, in the UK work for the state.

David Logan Yes.

Andrew Gray The remaining is in the private sector. But yet we don’t talk about the overwhelming majority of people who are doing their work for whichever company that they’re working for. And I know in our local meeting, there doesn’t seem to be space to discuss matters of entrepreneurship at all.

I think in the past there were meetings that had it, but today we don’t seem to have it. There’s no space at the end of the meeting to say, “Well, how is your business going today, Mr. or Mrs. or whatever your name is?” I know it is very sad. Is that your experience at your local meeting as well?

David Logan Well, we’re a very small meeting. And thinking about it, there’s a number of artists, a number of people in the not-for-profit world. I’m the only person who approximates to a businessman, I think, in my meeting.

Because the cultural changes that have gone on in society have affected Quakers. I mean, the moment their kids could go to Oxford and Cambridge and start to study law and get on in the mainstream of the establishment, particularly the establishment of the state, they seem to have gone that route and not into the route of creating a business. And I think—you asked me why there is not a large presence of Quakers in substantial businesses today.

It’s because people do not see the idea of creating and growing a business as a testimony to the positive aspect of the spiritual life. It’s seen as a grubby, profit-seeking activity. And I can say, for some people, it is. But for many people, it is not. It’s a way of helping society.

I come from Nottingham. And Jesse Boot started Boots, the chemist in Nottingham. And he didn’t go to the state and say we need a National Health Service in 1840. He didn’t set up a charity to give away free medicine.

He set up a business, where people came to him with a penny. And he gave them the best that he could for their disease. He saw his business as helping people. And I think that has got lost now.

Andrew Gray I would agree with that wholeheartedly. Changing tack again, do you think of any hallmarks of any Quaker businesses today? I mean, is it particularly that we’re involved in sustainability or simplicity? Or are there any sort of interesting features or Quaker-specific features for businesses today?

David Logan I think the Quaker tradition is potentially very, very strong. The first thing I’d say, it’s not just Quakers who have these values. Historically, you could take the Parsis, the Tata family in India who were Parsis. They had values. Andrew Carnegie in America was a Presbyterian. [00:16:08 INAUDIBLE] was a Taoist Chinese.

What they had in common, what the Quakers had in a very clear and systematic way, was a belief that while you pursue your business mission, you should keep front and center in your mind the ethical dimension of life. And that is rooted in faith for the vast majority of people in the world.

When I arrived in America to work for Levi’s, they gave me a job that nobody else wanted, which was answering all these letters from the Little Sisters of the Poor, the African American church, the liberal synagogues, the Presbyterian Church of America questioning Levi’s on its behavior. I thought this was very hard. And then it slowly dawned on me that they didn’t question capitalism in a pseudoscientific way, like the Marxists did through dialectical historical materialism. They questioned capitalism from an ethical dimension. And the roots of their ethics were their faith.

And all of the different faiths had a view. Islam has a very strong view about what it is to be a good businessman. And that has stuck with me as being an important aspect of the Quaker tradition: that they were very systematic and very upfront about their values informing their business practices. And I think that’s something we have to get back to bigtime.

Andrew Gray Thank you. Now that you’re on a podcast, another podcast—in fact, you did one a few weeks ago—are there any businesses, ethical businesses or Quaker businesses, that my audience should, our audience should, know about? And here there is an opportunity to talk to people about businesses they may not know.

David Logan Yeah. I think the first thing to say, Andrew, is that you and I are talking about individual businesses. They are the agents of the market. Most of our public discourse is about the aggregate market. You know, people talk about the market. They talk about society. We’re here talking about the agents of the market, the businesses.

And you previously said things have changed a lot in terms of the size of the sectors. When Mrs. Thatcher came to power in England, 100 percent of the people of China worked for the state. It’s now only 22 percent. In England, it’s 16 percent of the people work for the state. If you allow 5 percent or 6 percent for the not-for-profits, you’re looking at about 80 percent of the people work in these private firms.

And the question is, how do they behave as individual entities, as corporate citizens? And I think what the Quakers offered was a model of how a thoughtful, reflective company can engage not just in its own practices, but help its employees, suppliers, and consumers develop their citizenship as well. Does that make sense?

Andrew Gray It does. But any you wish to highlight specifically?

David Logan Oh, sorry.

Andrew Gray No, no. Your answers I am enjoying. And I’m sure everyone else will as well. But I’m just thinking I don’t know enough Quaker businesses, hence part of the reason for the podcast. Perhaps you could introduce me to some people that we ought to interview on this podcast.

David Logan Well, I think you’ve got—Cadbury’s recently been bought. And I had the pleasure of working for Cadbury as a consultant for 10, 12 years. And there’s some issues there, which are for another discussion.

But there are people like Clarks, the shoe company, who’ve recently had to outsource their production. There are people like Scott Bader, the cooperative in Northampton. These are two of the larger Quaker firms.

Cadbury’s was probably the largest of its kind. But it has succumbed to the market in a way, like a lot of Quaker thinking has succumbed to the market. It’s not now an individual company. So beyond them, I’m struggling to find examples.

There are within Q&B people who run businesses. And that’s one of the reasons for being there. I mean, my business is quite small in terms of staff. But there are people in Q&B who run businesses, and it’s a good place to meet them. But the days of the huge businesses, the big banks, the ironworks, they’re gone. They are gone.

Andrew Gray Ladies and gentlemen, you can hear the kettle going on in the background, which is absolutely fine because we’re in a busy dining room here in London. And this is what Quakers should be doing. Now, David, when you sold your business—you said you sold your business—what did you do with the proceeds, if I may ask?

David Logan Well, I really think, when you’re in a business, you have to walk the talk. And when you sell a business, somebody comes along and looks at it and says, “We will give you x for the business, provided you work at it for another three, four, five years.” In our case, it was five years. And we were paid a sum to pass the ownership of the business over to the Chime Group.

What we did, my partner and I—he was raised a devout Catholic and was a Lib Dem on the City Council in London. We both had this sort of view. So we took about a third of the tranche money and shared it with the workers, the key workers in the business, not everybody—somebody who’d been there for a year, no. But if they had been in the business a while, and they’d contributed to growing the capital value of the business, we felt they should get a share.

To be absolutely clear, what they do when they buy a business, they give you a tranche when you sign on the bottom line. I kept that. Because for the first two or three years of my business, I lived on savings.

Andrew Gray (laughs) As did I.

David Logan And that put that—that took that off the table. The second two tranches, which were about 70 percent of the value of the business, that’s where we basically split it—a third, a third, a third between the two owners and the employees. And we treated them pretty much the same, almost identically the same, as ourselves in terms of the earn-out.

If they stayed with the business, which we had to do to get our earn-out, they got a share in the capital value of the business. And that seemed to us to be the right thing to do. I’m very comfortable having done it.

Andrew Gray And was the purchaser in any way perturbed by that?

David Logan Nope.

Andrew Gray Because maybe everyone will leave at the end of the earn-out perhaps.

David Logan No. Part of earn-outs is tying people in to keep the business going. They didn’t really have to in our case because we like what we do. We would’ve kept it going anyway. But, no, they were very good, I have to say, very good.

Because in the middle of it all, Gordon Brown changed the rules. And because we had set up a fund for the employees, and therefore we retained an interest in some of the shares, we were going to lose our tax-deductible status for a certain amount. And our owner said, “Oh, no, no, don’t. We’ll push it through before the change comes in.” So they helped us out. And I have to say, I’m indebted to the way we’ve been treated by the people who bought our business.

Andrew Gray Thank you. As it comes to the end of the podcast, David, is there any tips you’d like to give to entrepreneurs out there or budding entrepreneurs?

David Logan Well, I think you have to have a passion for what you do. When I set up my business, I read a book called Growing a Business by Paul Hawken, who is a new age hippie serial entrepreneur in California. And I loved what he said in the book.

He said, when you grow a business, you have to be a grownup. You have to take responsibility. You have to sort your life out. You’re responsible for what happens. You’re responsible for who you hire, who you fire, where you source, what you sell. You’re responsible.

You can’t avoid that. And I like that. You’re a grownup. You take a piece of power in taking a stand on business. And it gives you an opportunity—if you’re a Quaker or an attender like myself, it gives you an opportunity to live your values in another aspect of life, not just through the ballot box or going to meeting.

But everything you do every day, there’s an ethical, social, environmental question to be answered. You’re participating in life and trying to do your best. You won’t always get it right. Welcome to the world of grownups.

But it doesn’t matter. You’re trying. And I think that is the most important thing. If I was saying, found a business, please do. Because we’re back. Business is back bigtime now. And the question of how it behaves is front and center for our civilization, not just here in the UK, but all around the world.

And if you’re participating in the game, you understand the rules. If you’re sitting on the sideline whining about it, you’re not. You’ll never understand it. And you’ll never come up with a good answer to the problems we face.

Andrew Gray David Logan, ethical pragmatist, how do people find you and communicate with you?

David Logan Well, if you go to my website, corporate-citizenship.com, I’m on there for the time being. You could always google me. And if you’re listening to this as a member of Q&B, Quakers and Business, I’m modestly active in the group, always happy to talk to fellow Quakers who have these interests. And I generally go to the annual meeting of Quakers and Business. So, yeah, I’m findable in this day and age. I’m findable.

Andrew Gray I’m sure you are. Thank you for participating and being my sort of first victim. Best wishes with the book. I hope it’s a major success. Thank you for your time.

David Logan I don’t think the book will be huge. But it speaks to a small group of us who are working on those issues. That’s why I’ve written it. I don’t expect a mass readership.

But there are a lot of people inside companies now wrestling with, what is our role in the world as a citizen? And these are some thoughts after 40 years of experience there, very much a practical person’s view of the world. And I just hope people find it interesting and stimulating.

Andrew Gray I’m sure they will. Thank you for your time.

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