July 28, 2020
In this episode of “Purpose, Inc.,” podcast host Michael Young talks with Alice Korngold, president and CEO of the New York-based Korngold Consulting. Alice provides advisory services for the boards and executive teams of multinational corporations. She developed the methodology that the Drucker Institute uses to rank Fortune 250 companies on social responsibility. And she is the author of A Better World, Inc.: How Companies Profit by Solving Global Problems Where Governments Cannot.
Key Takeaway: “When a company uses its most valuable assets—human, technological, financial—to find innovative solutions to our most vital social, economic, and environmental challenges, it will really grow its value.”
When Alice was finishing A Better World, which had taken her three years to research and analyze, the data told her a story that surprised her: “Only companies have the vast resources to truly solve our most challenging problems—social, economic, and environmental—because companies have the vast human resources and financial technology,” she concluded, “And companies have the global footprints and the market incentives.”
Now, that eye-opening realization came with a few caveats. The only companies that succesfully found innovative solutions had to do three things well:
One other caveat: Society, and investors, must hold corporations accountable for how they treat their workers and the communities they serve. That’s becoming particularly obvious during the pandemic.
“it’s becoming clearer than ever the companies can only maximize their value and their growth in the context of a healthy and vibrant community,” she says. “lf we’re learning anything today, it’s that the health and welfare of every member of the community is interconnected, and it’s now glaringly apparent that we depend on the well-being of hourly wage workers.” Those workers, now considered “essential,” are also the most vulnerable.
Michael and Alice talk about how placing employees of corporations on nonprofit boards benefits both for-profits and nonprofits. In her experience, mid-career employees who join nonprofit boards gain real skills that help them succeed as they advance. Serving on nonprofit boards helps them build relationships with stakeholders from diverse backgrounds—and helps connect the organization with many more resources their employer may bring to the table.
The biggest lesson board members may take away, Alice says: “They develop an understanding of the connection between the health of the community and the company’s success.”