What did it feel like to live through the collapse of AIG? What are the prospects for Brexit? Will actuaries be automated out of existence?
Aviva CEO Mark Wilson said he’d answer any question, and the audience at Saïd Business School took him at his word.
Wilson was speaking in conversation with Associate Dean Andrew White, as part of the Distinguished Speaker Seminar series.
‘Making money is not the purpose’
Wilson ‘s views on the role of business were ‘pretty strong’: ‘There is no business that exists for any period of time whose role is just to make money. And if you think it is, you won’t survive.’
That is not to say that businesses should not make a profit or grow, he said. In fact, ‘You must make a wonderful return for shareholders ... But making money is not the purpose. Making money is the outcome of what you’re doing, not the purpose of being.’
Challenged by White about the authenticity of some companies’ commitment to a social purpose, Wilson admitted that many CEOs did indulge in ‘greenwashing’, ‘doing a bit of charity or doing a bit of giving stuff’ to compensate for, or at least draw attention away from less savoury activities. He said, however, that Aviva was careful to ‘put our money where our mouth is’. It holds investments in oil companies, for example, and is prepared to say: ‘if you’re not doing something about becoming more carbon neutral and improving the environment, we will sell you.’ He also said that Aviva was currently in the process of exiting investment in tobacco companies.
‘It comes down to values,’ he said, ‘and I don’t mean values like honesty and integrity: if you haven’t got them, you shouldn’t be in business. It comes down to what you want to stand for as a business.’
A member of the audience questioned how he squared that with the fiduciary duty of the directors to promote the interests of the shareholders. Wilson’s answer was simply that long-term sustainability should be built into the definition of the fiduciary duty, and that he was in discussions with countries in the G7 and G20, the UN and the OECD to agree that new definition. ‘If you marry long term sustainability with economic interest, you can do a whole lot of good … I don’t want to be part of a business world and a business culture that screws up the world for future generations,’ he said.
‘Events, dear boy, events’
Wilson claimed that there were only two things that would keep him up at night: geopolitics and cybercrime.
‘In 1957, the then British Prime Minister, Harold McMillan, was asked by some fresh-faced reporter, “Sir. Prime Minister, Sir, what blows you off course?” And Harold McMillan looked at this young guy and he said, “Events, dear boy, events.” And it doesn’t matter what you do, it doesn’t matter how good you are as a leader or a CEO or whatever, there will be events that happen – just like the global financial crisis in 2008. There will be events that happen.’
He said that he was not worried about ‘events’ within the company, but, ‘I worry about people with their hands on big red buttons round the world. I worry about war. I worry about people doing dumb things politically, and from the UK perspective, I still worry about parts of Brexit – although I think we’ll get through it.’
He worried about cyber crime because ‘it doesn’t matter how good you are as a company or how many hundreds of millions or billions you spend on cyber crime, you will never be 100 per cent safe. It is not possible because the crooks will always go as fast as you can and it’s a constant arms race.’
‘Business is the biggest force for social good in history’
Asked about Brexit, Wilson’s biggest concern was a lack of support for business, believing that the UK ‘at the moment is one of the few countries in the world that doesn’t support its business’.
‘Business is the biggest force for social good in history. Have a look at China alone: over the last 15 to 20 years, 680 million people have been brought out of poverty… The UK right now needs business. It also needs big business. And I think it’s about time the government said, “We support business. We support big business and by doing that we support our economy and we support people in the UK,” because that’s how we improve people’s lives.’
On Brexit, he warned that, ‘there’s no point leaving and then being a rule taker – because the other countries are looking after their own interests and, make no mistake, they’re there to try and take jobs from the UK and put them in Paris and Frankfurt and everywhere else.’ But an implementation period has to be agreed as soon as possible in order to reduce uncertainty, because uncertainty is ‘Kryptonite’ to business.
He admitted that there was a certain amount of ‘courting’ going on, as other EU countries were keen to attract jobs, investment, and infrastructure to their own countries. The UK’s typically rather bureaucratic approach, with ‘gold-plated’ regulation, is not competitive, and it needs to become so, ‘or we will lose trade to the US and to Singapore and to China and Hong Kong.’
‘I look for three things in leaders … and experience is not one of them’
Wilson said that experience in today’s world is ‘massively overrated, because the things and business problems that I’m facing at the moment are not things we’ve ever faced before.’
When hiring leaders he said he wanted intellect (‘If you’ve got a computer that doesn’t have the processing power, it doesn’t do what you need. You’ve got to have intellect to make it work), values that are consistent with what the business wants to do at that time, and drive. But he was prepared to take a bet on people, even when they and others thought that they did not have enough experience.
‘Look at some of the hard stuff’
Having built his own career ‘doing the jobs no one else wanted to do’, it was inevitable that his advice to students in the room was to ‘look at some of the hard stuff ... industries that are going to be transformed, industries that are being disrupted.’
He urged young people to have courage and be prepared to break the rule book – not in the sense of ‘taking stupid risks and blowing stuff up’ – but in the sense of being comfortable trying something new.