Can You Guess Who Said This?
“I don’t respect the stock market at all.” “Once you’re public, you have lost control over the company, and you have to maximize profits for the shareholder, and then you become one of these irresponsible companies.” “...they (my children) embody the notion that every billionaire is a policy failure.”
A few months ago I wrote about Herman Daly, an economist whose life work has focused on creating a “steady state economy”. Daly believed that the constancy of growth for the benefit of building shareholder wealth has eroded both our culture and values. I’ve not even scratched the surface of his work, but my body tells me there is truth to what he is saying. My mentor, Dr. Elliott Jaques, always said the purpose of corporations was to build communities, provide workers fair wages to support their families and community…to build a society. He believed–and his analytic work proved–that trust based work systems not only build strong vibrant cultures creating opportunities for “all” but also create profit and build shareholder value.
So who have I quoted?
These strong opinions come from Yvon Chouinard, speaking of recent decisions to continue his company and sustain his dedication to the planet. Chouinard, the owner of Patagonia, is frequently considered a quirky billionaire. The Patagonia brand is highly regarded among outdoors enthusiasts for its quality and durability. It sells over $1B in outdoor apparel annually. Chouinard is 83 and an outdoorsman himself. Chouinard, along with his wife and two adult children, are now setting a new stage. Their mission? For companies to thrive financially while also ensuring the global social issues near and dear to their hearts can continue to be supported in perpetuity. Call it capitalism with a conscience.
Patagonia will continue to operate as a privately owned company but will no longer be owned by the Chouinards. The family has innovated once again while staying true to its global commitments and values. 98% of its shares have been placed into an Irrevocable Trust called the Patagonia Purpose Trust. This “set in stone” irrevocable trust demonstrates that Chouinard means business! Under this new model, Choinard family members will hold the company accountable to its commitments: to run a socially responsible business and to give away 100% of its profits. Not only that, but they have paid whatever taxes were/are due for this restructuring and gifting, receiving no tax breaks in the process. How refreshing!
Recently a senior executive from Patagonia has joined the Eileen Fisher Company as CEO. Lisa Williams, formerly chief product officer at Patagonia, will be accountable for overseeing daily operations, sustainable growth and responsible business practices. Eileen Fisher will stay on to oversee brand design. The company’s mission is to transform the apparel industry by repurposing, recycling, utilizing organic fibers and reducing waste. Under Williams’ direction, the company will address the glut of fabric that is found in landfills all over the world. I've been a fan of Eileen Fisher’s timeless clothing for over 30 years. I was disappointed to see how the company lost its way when she stepped away. My closet and I are thrilled she’s back.
There is hope on the horizon. It takes a person who is comfortable in his or her skin to create something that is outside of the norm. Both Eileen Fisher and Patagonia have sold a portion of their company to their employees. They've shown tenacity and vision, believing in what business could be. These two profitable companies founded by exceptional people have stayed true to their values and beliefs despite the business community looking askance. Now at a new phase of personal and business maturity, they still are moving forward to make sure their companies survive and thrive after their departures.
What might our world look like with more courageous business leaders? What might our children and grandchildren’s world look like? With younger people at the helm, will we see a brighter future? Any thoughts? Contact me today. I’d love to chat!