Recently, Rob Pye and Annabelle Lambert, of EthosVO – a network of social entrepreneurs and innovators who create sustainable solutions to some of society's most complex challenges, caught up with iGlobal columnist Professor Atul K. Shah for a webinar and podcast entitled ‘The Value Exchange’. This review of his new book – ‘Inclusive and Sustainable Finance: Leadership, Ethics and Culture’ – follows that in-depth interaction…
Atul pulls no punches in "holding truth to power" within the finance and accounting industry. It is packed with examples of how finance and accounting is ruining communities and our planet. However, the book is not all doom and gloom. It highlights many examples of how faith cultures use finance to serve communities rather than their own self-interest, and how these examples can inspire change in individuals and the industry as a whole.
Atul's call to action is to inject softer skills such as real-world community experience, values, beliefs and inter-generational family mindsets into both those who practice and lead the profession. He offers this as a kind of "antidote" to the "cultural neutrality" that seems to be the mantra of finance today.
Eminently readable (which surprised and impressed me!), the book is organised into five simple chapters: Morality, Tradition, Community, Purpose and Experience.
The book argues that ideological finance is a false and reckless individualist narrative. The culture of exploitation and expropriation has been deeply woven into human history, especially through the European colonisation of the world.
Looking at the rich and diverse cultural influences on finance presented in this book, one cannot help but conclude that a cultural economic ideology was just an extension of an empire. It was an intellectual and moral conspiracy to help subjugate the rest of the world into economic subservience. Multinational corporations and globalisation were used as vehicles to build new colonial empires in the name of free markets and neoliberal capitalism.
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Cultural diversity was ignored precisely because it had the power to challenge this orthodoxy and is still being ignored today in the drive towards standardisation and financialisaton.
Shah argues that finance and accounting is a technocracy devoid of culture, ethics, and, more than anything, morality. He suggests that action research is the way to get out into communities to find what works for real people rather than relying on top-down approaches.
One of the most inspiring parts of the book is the examples of social entrepreneurship in the east. My own views have been greatly inspired, for example, by Mohammed Yunnus' microfinance in Bangladesh which has transformed the lives of millions of people living in poverty. Yunnus' approach was based on the idea that everyone has the right to financial services and that providing these services could help people lift themselves out of poverty.
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Shah argues that the finance industry has lost touch with the idea that it should serve society rather than the other way around. This cultural driver conflicts deeply with the duty to act in the customer's best interests. He suggests that this is partly due to a lack of diversity within the industry. The industry is dominated by a particular type of person – usually white, male, and educated in elite institutions – who are trained to think in a particular way. This has led to a homogenisation of ideas within the industry and a lack of innovation.
The book also highlights the problems with current corporate social responsibility (CSR) practices within the industry. Shah argues that CSR is often little more than a box-ticking exercise designed to give companies a good reputation without actually changing anything. He suggests that a more holistic approach is needed, which takes into account the entire supply chain, as well as the impact on communities and the environment.
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However, the book does not just focus on the problems within the industry. It also provides a roadmap for how the industry can change for the better. Shah suggests that the industry needs to be more transparent, more diverse, and more accountable. He also suggests that the industry needs to be more proactive in its approach to sustainability rather than simply reacting to external pressures.
One of the key takeaways from the book is the importance of culture and values within the industry. Shah argues that the industry needs to move away from a focus on short-term profits, and towards a focus on long-term sustainability. This means embracing values such as kindness, empathy, and compassion, and using these values to guide decision-making.
In conclusion, Atul Shah's book ‘Inclusive and Sustainable Finance: Leadership, Ethics and Culture’ provides a much-needed critique of the finance and accounting industry, and offers a roadmap for how the industry can become more ethical and sustainable.
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The book is a must-read for anyone who is interested in the intersection between finance and society, and who wants to make a positive difference in the world. It is packed with examples of how finance can be used to serve communities, rather than self-interest, and provides a blueprint for how the industry can move towards a more sustainable future.