A Sustainable Future: Dambisa Moyo and How Boards Work

Dambisa Moyo, international economist and author, discusses how boards can work better and why the nature of board oversight is evolving.

How do corporate boards work? Listen to Jason Mitchell discuss with Dambisa Moyo, international economist and author, how the nature of board oversight is evolving, what that means in the context of greater pressure on socio-environmental issues and why calls to reform capitalism ultimately mean a turn towards a multi-stakeholder model and away from traditional shareholder-centrism.

Recording date: 23 April 2021

Dr. Dambisa Moyo

Dambisa Moyo is a global economist and author who focuses on international business and the global economy. Dambisa currently serves on the boards of 3M, Chevron, Conde Nast and the Investment Committee of Oxford University’s endowment. She previously served on the boards of Barclays Bank, Barrick Gold, Seagate Technology and SAB Miller. She was an economist at Goldman Sachs and worked at the World Bank. She is the author of a number of books including four New York Times bestsellers. Her latest book, How Boards Work: And How They Can Work Better in a Chaotic World, is out in May 2021.


Episode Transcript

Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.

Jason Mitchell (00:16):

Hi everyone. Welcome back to the podcast and I hope everyone is staying safe and well.

One of the great things about this podcast is the opportunity to speak to people who’ve had a big influence in my own development. One of those people is Dambisa Moyo.

Why? Because more than a decade ago when I was advising the UK Commonwealth Enterprise and Investment Council on water infrastructure, I distinctly remember picking up and reading Dambisa’s first book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. The book challenged many of the prevailing assumptions about development theory. For me, it was made all the more powerful and relevant by the backdrop of the Global Financial Crisis. From conferences in Ghana and Nigeria to the World Economic Forum in Cape Town, I listened to economic ministers debate the merits of Western and Chinese development policy and even the legitimacy of capitalism itself.

Since then, Dambisa has gone on to become an incredibly influential and prolific voice on economics, development, political economy and corporate governance. And she continues to challenge prevailing assumptions.

Which is why it’s great to interview Dambisa on the launch of her new book, How Boards Work. We cover a lot of ground in this conversation. We talk about how the nature of board oversight is evolving, what that means in the context of greater pressure on socio-environmental issues and why calls to reform capitalism ultimately mean a turn towards a multi-stakeholder model and away from traditional shareholder-centrism./p>

Dambisa is a global economist and author who focuses on international business and the global economy. Dambisa currently serves on the boards of 3M, Chevron, Conde Nast and the Investment Committee of Oxford University’s endowment, and previously served on the boards of Barclays Bank, Barrick Gold, Seagate Technology and SAB Miller. She’s the author of not one but four New York Times bestsellers. Her latest book How Boards Work: And How They Can Work Better in a Chaotic World is out this month.

Jason Mitchell (02:38):

Welcome to the podcast Dambisa Moyo, it's great to have you here and thanks so much for taking the time.

Dr. Dambisa Moyo (02:41):

Thank you, Jason. I'm delighted to be here. Thanks for the opportunity.

Jason Mitchell (02:45):

Great. I'm really excited about this. So we've got a lot to talk about, but let's start out with your new book, How Boards Work. I'm kind of curious, how did the idea to write this book first come about, why now?

You cover an incredible amount of ground in the book, but I'm wondering if it was one specific area that drove its urgency. Was it the changing nature of board oversight or broader calls around reform for shareholder centred capitalism? Or was it simply misconceptions about the role that boards play?

Dr. Dambisa Moyo (03:14):

There were two things. One was, I felt very strongly even before COVID hits an earnest last year, that it was essential to reassert the arguments for corporations and the private sector, and to clearly make the point that companies, the role that they play in job creation, innovation, taxes, infrastructure, and of course the now evolving ESG agenda means that it's really important that corporations continue to have a seat at the table in trying to resolve a whole array of challenges that the world is facing. The other aspect, which was a driver in me writing this book was really a recognition that people didn't quite understand. And by people, I mean, investors students at top business schools, even the employees of the boards where I served often didn't understand what exactly boards do. If you think about it boards with generally around 12 people at the helm of these organisations, people didn't really have a good understanding of what their mandate was and in particular, what challenges these companies faced in order to drive corporations forward. And so I felt it was really essential to really capture these two aspects. And in thinking about the world moving forward.

Jason Mitchell (04:33):

Obviously the pandemic is a thread throughout the book, which is interesting, but I'm wondering to what degree did it animate or change or shift your ideas?

Dr. Dambisa Moyo (04:44):

Well, in a sense, it kind of bailed me out in some respect because I feel that corporations were able to showcase their importance in terms of supporting the society beyond the sort of standard, Oh, they're just there to make money. We saw large hotel chains, convert their premises to become sort of makeshift hospitals. We saw companies put down their competitive instincts and work together, not just across different pharmaceutical companies, but also working with government in a very animated way in sort of innovative way in order to deliver on the vaccine and really in the short shrift. And, and also we saw corporations really adapt really quickly in terms of moving from this sort of status quo and how they operate and how they finance themselves into a world of working from home and adapting to a much more challenged environment, not only when COVID hit at the beginning, but also throughout the response, you know, through Covax and other initiatives to roll out the vaccines.

Jason Mitchell (05:50):

What are some of the structural changes you'd like to see on corporate boards coming out of the book? For instance, you write about establishing a specific ethics committee on boards, which is incredibly interesting. Why is that so important and how does that sort of reflect, like you said, some of these trends around the popularisation of ESG or greater emphasis on societal and environmental values.

Dr. Dambisa Moyo (06:12):

So I think in order to answer that question, it's important to take a step back and to think about what the fundamental mandate of the board is. And I argue in the book that we, the boards have a three-pronged mandate, they are responsible for oversight of the strategy of the companies in which they serve, they are responsible for hiring. And in some instances firing the CEO and they are also responsible more and more for the oversight of this cultural norms of the different organisations. The proposals that I have for upgrading and improving boards, which I should say date back to the 1600s, so it did feel like we were due for an upgrade are really centred around these three things. So with respect to strategy, I make some proposals as to how the board can be much more engaged in that process without overstepping its oversight role.

Dr. Dambisa Moyo (07:08):

And by that, I mean, you know, ready boards do provide that oversight, but there might be ways for boards to be much more engaged in terms of how the process for delivering on strategy actually evolves. And then with respect to hiring and firing the CEO. You know, I did think that there is a lot of scope for upgrading the nature of how we hire and review candidates traditionally. And I've written about this recently in a Bloomberg article, but traditionally we've tended to focus on things like financial performance. Did this candidate deliver on revenue growth or profitability or cost cutting strategies? We've also looked at operations, how was their safety record? What was the operational efficiencies, but very scarce. And, and of course I should say we also very much focused on is this person a good leader? Are they, you know, focused on teamwork, et cetera, but very rarely do we really probe into the ethics of a candidate and more and more through my own experience, but also more generally it's become clear whether it was through the Me Too, agenda Black Lives Matter, that ethics and really that a sort of moral compass aspects are going to be a key pieces of how boards I think should evaluate the candidate.

Dr. Dambisa Moyo (08:22):

And then the last point is just really around the culture of the organisation. And this is where the ethics committee comes in in particular. I think that there's a real opportunity to think about these challenges and the ethical and moral compass of the organisation. More generally, to the extent that corporations are governed by boards and boards provide that oversight. There are some levers that the board has such as compensation and of course, hiring the CEO, which can help influence what sorts of decisions the organisation is making. Some of these more challenged, ethical, and moral choices that boards are going to have to make, especially around the ESG agenda and especially where trade-offs exist. And I'm sure we'll get into that in a moment.

Jason Mitchell (09:07):

One interesting thing about the book is he spent a lot of time examining the multi-stakeholder model. And in fact, it's actually been one area that we talk a lot about on this podcast, whether it's from Paul Polman or from academics being on this in the past, but multi-stakeholder capitalism it's often described in these idealised proto-utopian terms is kind of a system where everyone's interests are considered. And I'm wondering from a board's perspective, what are the trade-offs in managing all these relationships? How do you manage different frankly, sometimes competing stakeholder groups that could include civil societies, NGOs, corporates, policymakers, and investors? How would you balance the commercial realities of guiding a business from a board perspective against trying to produce socially desirable outcomes?

Dr. Dambisa Moyo (09:54):

Yeah, so this is incredibly challenging. I think that the sort of flag was planted in the ground when you look at the business round table statement back in 2019. And so that to me was really the sort of gun that started the race towards a better metrics, better sort of thinking around taking that broad goal of trying to be a better corporate citizens into a much more practical realm. And this is for sure, still a work in progress even before the whole notion of stakeholder capitalism sort of gathered momentum companies were already doing a huge part in terms of the global economy in terms of social and community-based initiatives. And we know that in terms of creating jobs, paying taxes, helpings infrastructure, and of course, really all importantly, driving innovation corporations have been for several, several centuries, but continue to be leaders and important part of the puzzle for human progress.

Dr. Dambisa Moyo (10:56):

But to the point around straddling these different stakeholder interests, it is absolutely challenging. And in the book, I go through a whole range of different initiatives that are on the ESG agenda that, you know, in principle may seem easy to execute on, but as a practical matter, incredibly difficult, everything from climate change to pay equity, race, and gender parity issues around data privacy, worker advocacy, all of these things to the sort of untrained might seem like no brainers, why can't we just do that? But as a practical matter, and with the responsibility and the fiduciary duty that corporations have, it becomes much more complicated. And if I may just give you some specific examples here without getting into too much detail, but for example, the classic one is the fact that there are now people campaigning on the back of ESG agenda that you know, a fossil fuel companies should be defunded, which for some people thought sounds very attractive given the sort of urgency around the need for climate change and the sorts of urgency around an energy transition.

Dr. Dambisa Moyo (12:02):

However, that kind of thinking doesn't really take into account that there remain about 1.5 billion people on the planet who have no access to energy in a sort of sustainable or cost-effective manner, this type of very aggressive approach around shutting down the existing energy sources. Doesn't also take into account that it's those exact organisations and enterprises that tend to be at the tip of the spear in terms of innovation, the real to my mind sources of innovation on where we might have new energy sources and whether it's renewables of green sources in the future. And also perhaps most crucially this type of thinking of defunding existing enterprises tends not to think about second order effects such as well, if we shut down these energy sources, we will have more people as a disorderly immigration because people will seek a better livelihoods elsewhere.

Dr. Dambisa Moyo (12:57):

So that's an example of how on the one hand, you know, reasonable people can agree that climate change is an urgent and important area, but there seems to be a lack of understanding or a blind spot with respect to the need for less hasty and more innovative solutions, which is where boards need to step in. Another very quick example if I may is a data privacy. So, you know, a lot of people, particularly in the West say, well, I want my data to be held private. It's my own, I own it. It's my rights. And then that's fair enough. But you know, at the same time, there is a recognition more and more that if we want to have or pharmaceutical companies want to be able to deliver solutions around, you know, the vaccine or, you know, more generally around camp secures, there is definitely an argument that being able to have bigger datasets matters.

Dr. Dambisa Moyo (13:49):

And so the question becomes if they have a footprint in places like China, where the, the rules around data privacy may not be as stringent as they are in the West. You know, what does that mean for whether ESG compliance puts a company, a pharmaceutical company at odds with investing in China? So again, if you're on the board of a pharmaceutical company, that would be a live discussion. And perhaps again, to the sort of outsider, they might think of this as being as a straightforward answer. So the book is peppered with a lot of these trade-offs and there are plenty more, I guess, one more I, if I may is, you know, we all recognise the importance of diversity, the numbers show that it's important. It's absolutely essential for companies going forward, but we don't want to fight discrimination with discrimination. And so by making sure that we have more diversity in the boardroom, in the C-suites and more generally in the workforce, we don't want to end up basically alienating the sort of traditional white guy majority. So it's those types of things that boards have to straddle and think about.

Jason Mitchell (14:52):

To stick on that first example. I mean, what do you think is the appropriate solution in terms of tackling the fossil fuel industry? Is it if it's not divestment or defunding, is it greater stewardship? Is it shareholder resolutions? Is it say-on-climate type resolutions? I think there has been some frustration in the past that many attempts to gain greater transparency, particularly with the rise of Paris alignment, you know, post the Paris Accord or frameworks like the Task Force for Climate Related Financial Disclosure, I think there's been some difficulty in sort of getting parts of the fossil fuel industry to really buy in to it that is changing critics would say not fast enough, but what do you think is appropriate?

Dr. Dambisa Moyo (15:32):

I'm not entirely sure why people would think that there's not enough or not. There's no progress he made. I mean, I see it from many different angles. I happen to be on the board of a large energy company. I'm also on the board or the investment committee of a large endowment where they are putting immense pressure on a whole range of institutions, not just fossil fuel energy producers, but also banks in terms of this energy transition, being a priority. What do I see as a solution? I mean, everything that you've talked about, you know, may be important, but I see this as all very short-term imperatives, I'm in this for long-term sustainable solutions. And so yes, public policy has a role to play, but ultimately in order to solve the issues of climate change, we are going to have to have enormous innovation.

Dr. Dambisa Moyo (16:20):

And I can say for certain, not only the board that I serve on in the energy space, but more generally the energy sector are investing multiple billions of dollars every year in the whole stack of possible renewables and new innovation. It's just to be clear and to underscore the point, this is an existential crisis for energy companies. So they are investing in solar and wind and geothermal and batteries biofuels, nuclear gen-four. I mean, there are a whole slew of areas. And believe me, if someone on this planet of 8 billion people knew a way to generate energy at scale in a sustainable cost effective way, we would have the answer. So the notion that nothing is being done or no stuff is not being done in at a rapid clip, I think is really, is a narrative that is not born out. I would argue in the data and certainly not borne out in the multiple billions of dollars that's actually being put to work.

Dr. Dambisa Moyo (17:18):

I do agree that perhaps where there might be questions of who's onside and who's offside really are led by the fact that there's no sort of a unified metrics, but a lot of the energy companies, the banks are not producing partly integrated reports, but also separate reports to explain what they're doing, not only in terms of risk mitigation. So things like CO2 emissions, water intensity, greenhouse gases, et cetera, but also thinking a lot about upside opportunities. So really putting marginal dollars to work, to generate returns. And then really the one other thing where I think we do have a handicap or from a global basis, is that we're not going to win on this climate change agenda without China and India being at the table. And so I think that one of the frustrations that may be embedded in society and certainly with people who are advocates, very aggressive advocates at the ESG agenda is that they might go for say-on-pay and these very important initiatives to try and drive board change, but that can only be seen as marginal in some respects because really the global picture demands that China and India be part of that solution. And very often it's hard to move the needle, especially for emerging economies, given their own priorities and a need for economic success at home.

Jason Mitchell (18:43):

I mean, how much of all of this that we're talking about is a public policy problem?

Dr. Dambisa Moyo (18:48):

I think that there's no doubt about it that visionary governments, we know that from what China's doing right now and technology, but also what the United States did back in the fifties around DARPA, the building up of Silicon Valley, you know, the Manhattan Project, all these things that governments that are in public policy that is visionary and really invest in a very sort of thoughtful and innovative way. Working in partnership with private sector to me is nirvana. That is the, that is what we should all be targeting. And in as much as government for a whole host of reasons that we can get into has become less, data-driven, less forward looking, less focused on measured outcomes, sort of much more based on narratives. And even in some instances, more corrupt, we're moving further and further away from resolving these issues. It is in that respect, I do believe a very much a public policy problem, but at the same time there, you know, it's not just with climate change, but more generally on the whole suite of ESG that I outlined earlier, whether it's worker advocacy, pay equity, racial and gender equality, issues of data, privacy, et cetera, all these things.

Dr. Dambisa Moyo (20:01):

In fact, obesity areas of gun control, all these areas of being forced onto the board agenda corporate agenda. But actually there really is an important role that government should be playing and public policy should be playing that I would say it's more and more being ceded to the private sector. So I'm, yeah, I really do believe that this is why China to me is, is where the United States was in the 1950s. We're seeing the Chinese political class really leaning into areas such as digital and technology in a way that is going to serve them well I believe in decades to come. And we, you know, unfortunately we haven't seen that sort of visionary thinking in the West. And of course, I think all eyes are now on the recent Biden proposals around infrastructure, which have, and of course highlight high level numbers, huge. But if you read through it, this, there are pieces on digitisation and all of that is going to be important in terms of meeting that visionary goal.

Jason Mitchell (20:59):

I wanted to come back to the book and this idea around kind of culture and particularly purpose that boards cultivate. And we've seen this resurgence in interest and even in declaration around purpose by corporate studies, by academics and even regulators, for instance, in the UK, the Financial Reporting Council has now sort of embedded the idea, the notion of purpose within the UK Stewardship 2020 report. And I'm wondering again, from a board perspective, how do you balance that tension between let's call it the purpose movement, you know, and the shareholder movements?

Dr. Dambisa Moyo (21:33):

So look, I think in the book I talk about the cultural mandate for the board as being separated into two areas. There's the non-negotiables, things like excellence and professionalism, really. I don't think anybody has any quibble about the importance of that for organisations to thrive and, and to perform as going concerns. The other aspect of this is really about this cultural frontier, which is what you're alluding to that, you know, there are these lofty goals for corporations to play a broader role in society. Things like climate change, as well as racial and gender diversity and even opining on areas of obesity, et cetera, worker advocacy. And those are for sure fraught with a lot of challenges. There are levers that boards can use to influence change, and we are using them. For example, the obvious one is hiring; who we are hiring and how we evaluate the people that we hire and making sure that they either a test or they show that they have some moral commitment, a moral compass that shows commitment to these very tough issues.

Dr. Dambisa Moyo (22:46):

I mean, just recognising that there's no right and wrong answer, but at the same time, know our compensation structures, which, you know, we've done a lot of work and a lot of boardrooms to extend the purview of comp. So with long-term and long-term incentive planning, the focus now is moving towards beyond LTIPs and into how do we how do we make sure that social, the social and cultural aspects are a big part sometimes as much as 50% of how we evaluate our employee base, the CEO, the C-suite et cetera. So this is not just talk. We really are focusing on converting these big ideals in a practical way into action. And this permeates throughout the organisation. The other last point I'll just make is that, you know, we live in a time of technology and, and I think the best boards are taking advantage that by getting more information from our stakeholders in terms of provenance.

Dr. Dambisa Moyo (23:51):

So people on our clients and customers, our own employees and including investors are now very interested in everything from what kind of, you know, what are your emissions, your average emissions, your water intensity issues, and what's the average wage you're paying your employees and that kind of information, including how employees view the broader environment that they work in is all easy to get at your fingertips. You know, it used to be we'd rely on the YouGov or an employee survey now through platforms like Glassdoor or The Layoff or Blind you can get information unsolicited about how people feel about the sort of cultural, moral compass of the organisation. And indeed boards are using that too.

Jason Mitchell (24:37):

The idea of the cultural frontier is fascinating to me. And I'm wondering from your own experience, what's the degree of willingness or even ambition to really push into that frontier. And we've seen, I think a couple examples, one successful one is obviously Paul Polman at Unilever over the past decade, really pushed into an advanced that frontier. On the flip side, we've seen Danone and CEO, Emmanuel Faber just be pushed out of his role as CEO trying to do the same thing, but certainly tripping up on some of the more financial metrics in terms of growth metrics throughout the pandemic.

Dr. Dambisa Moyo (25:12):

Yeah, it's a fine balance. I think that you know, at a very high level, what we're trying to do in the boardroom is to ensure transparency and consistency. I was just talking to someone yesterday who said, you know, there are a lot of companies came out on the back of Black Lives Matter and, you know, basically said that they were going to be supportive of it, but many of those same companies said nothing about Asian violence. And so that's an example of where, you know, you have to be seen to be consistent and it's becomes incredibly challenging because in some instances, people just don't have a context or a really a full understanding of what, what a certain situation may mean for their employees or for the broader consumer base. So that's where I'm spending a lot of time is really trying to urge corporations to focus on consistency and transparency.

Dr. Dambisa Moyo (26:03):

But beyond that, you know, yes, there are going to be very challenged situations that you've described Danone. But obviously PGE is another example of this where, you know, what seemed to be good intentions on ESG have been described as part of the problem for a lack of performance on the financial side. And, you know, I think in terms of going forward, I think the solution with this specific thing is really going to be a much more integrated approach, less hasty, more experimental by that. I mean, for the last over a decade that I've been on boards, corporations tend to see two people, two sets of people coming from institutional investors, you get people who say, hey, I'm here to box tick on ESG. And then the next group comes into focus specifically on the financials. Those are the portfolio managers. And I think it's that sort of separation in the mind of institutional investors, but also other groups as well as perhaps in the way companies think I've thought about this new agenda and cultural frontier that has led to these different outcomes. And I think the more that these two groups become more integrated as one, the less we'll see these sorts of schisms and fissures emerge as, as we have in recent times.

Jason Mitchell (27:20):

How do you think long-termism is best manifested from a board perspective? Does it ultimately come down to compensation as you write about?

Dr. Dambisa Moyo (27:29):

Yes. I mean, I remain open-minded. For me I think compensation is very straightforward lever.

Hiring obviously promotion. These are all aspects of how boards are able to really deliver on outcomes that they would like to see in ESG, but also in general performance of an organization. I think one area in comp that has been downplayed, but we're seeing it much more come to the fore is malice and clawback, which is this idea that, you know, once people go off into the sunset, they retire from the companies. It's now more and more possible for companies to go back and say, wait a second, we just found out that you were up to no good, you have to pay back some of that money. I think you know, McDonald's is a great example that's in the news right now, but I think that that's an underplayed lever.

Dr. Dambisa Moyo (28:18):

And I think that we'll see much more of that being used going forward. But beyond that, you know, as I mentioned earlier, I think in terms of long-term incentive planning, I think really a lot of work has been done in that space. And I think it's actually very credible and should be commended in terms of trying to ensure that the CEO and the C-suite as well as the organisation, as a whole take on that long-term view and, and really embed a lot of these ESG long-term sustainability issues into their comp and their ability to be promoted.

Jason Mitchell (28:49):

You think about it then from a different perspective, from a climate perspective, you know, most companies, when they plan, it's typically a business cycle of five to 10 years, central banks even most tend to plan three to five years out, but with an existential risk, like climate change, we're talking about 10, 20, 30 plus years at the minimum, in terms of planning, is it purely an exercise in backend loading solutions, or are you sort of starting to find more integrity around this very, very long-term horizon?

Dr. Dambisa Moyo (29:21):

Well, I think it's, it's a little bit of both. When I think about how board members are judged, it's ultimately about judgment, good judgment, and it's the same way I would judge a CEO's efforts in something as long-term as a sustainability or climate change, what are the best efforts and ultimately 10, 15, 20 years 50 from now when that future board looks back and the future CEO looks back, I would want to be sure that they will say, hey, given the information that they had at that time, this CEO, this board made the best decision possible. And to my mind, the best decision possible today, given what we know is some combination of really bedding down those metrics in a way that takes into account trade-offs. It's really about understanding the balance between public policy and innovation and making sure that there's transparency and consistency in how we think about these things. Those are the three things that I think are absolutely critical. And without those, I think we will be judged very harshly in the future.

Jason Mitchell (30:27):

How do you think boards are thinking about, you mentioned ESG, but not just as metrics of their own corporate behaviour and performance, but even the effects of ESG-related capital flows. I think one of the interesting things that we've seen out of the European Union is regulation that does a couple of things, but one thing it does in the most explicit way is steer capital towards sustainable economic activities and away from unsustainable activities, which clearly creates risks and even opportunities, depending on what kind of business you are.

Dr. Dambisa Moyo (30:57):

You know, it goes back to this fundamental view. I think that there's been a lot of work done, certainly climate change in the last decade or half decade, which has got this sort of what I would call a negative risk mitigation lens. So everybody's been thinking about what is the downside risk of climate change and don't get me wrong, that is a critical and an important piece of sustainability and really about thinking about these issues. However, I do think in fact I know that no company can cut its way to growth. If we want companies to continue to evolve, if we want economic growth in society and human progress, more generally, we're going to have to invest in those areas. And so there were a critique of the current frame certainly public policy frame. I think there's been too much emphasis on the downside, not enough emphasis on and incentives for really generating or having that grander vision of really transforming and upgrading society in the way that we need to see it.

Jason Mitchell (32:01):

Do you think that there is a growing need for ESG specialisation on boards?

Dr. Dambisa Moyo (32:07):

I don't because I think it's par for the course. I am very sympathetic to the view that you want some people to be a butcher, baker, candlestick maker, but in many respects, this is ESG par for the course, of course, it's about existential crisis. I don't know what an ESG expert looks like. Every board member should have an understanding of the need for transparency and consistency in these areas, to be able to think about innovation and risk mitigation and, and really thinking about these, these broad trade-offs and you know, how society and how we can ensure that these companies can continue to do what they do best. So I personally don't subscribe to an ESG specific professionalism if that, if I can put it that way, I think any board member should have that every board member should have that muscle strengthened in the world that we operate in today.

Jason Mitchell (32:59):

In the book, you write that the lack of gender diversity and under-representation of minorities reflects a deep seated crisis of opportunity and access. And I'll be honest as I read this and I want to call myself naïve, I even kind of gasped when you wrote about your own experience of perceived tokenism by an investor as a board member, how do we fix this?

Dr. Dambisa Moyo (33:22):

Well, I think the obvious answer is the more commonplace that having diverse board members, diverse employees, the easier it will become. I think one of the sort of rules of thumb is that you need three people on a board. You might need three women before people stop thinking of it as a big issue. So if you have one, people think it's a token, that the woman's a token. If you have two, people spend their time wondering whether the two women are getting along. And if you have only when you have minimum of three, do they stop caring about the specific gender? And that you'd be essentially reach a point of equality. I've always thought that that's an interesting rule of thumb, but the main point is how do we fix it? You know, boards traditionally have taken the view that the best sport members, the best type of board members or board members that come from the C-suite and that has inherently meant that there's a challenge with respect to bringing diversity in terms of women and minorities into the boardroom, because the pipeline of having women and or minorities has been relatively weak, but the more and more that to the extent that the issues that boards are grappling with is become broader.

Dr. Dambisa Moyo (34:32):

Everything from science, obviously with the health pandemic, but also geopolitics and challenges around technology, I think it's widened the aperture for a number of corporations will now appreciate and understand, well, wait a second yes, we might still want 40% of the board to be [inaudible] suite, but there's a desperate need for people who have who maybe didn't grow up in business, but having a really important perspective around organisational management or around geopolitical challenges that the world would face. So I'm very optimistic. And in fact, I'm a live example of an unconventional board member, and hopefully I'm adding value. I would like to think I am, but the point just being that that's an opportunity, a real opportunity for women and more diversity in the boardroom and as well as more generally you know, in the current environment before we get that sort of bigger pipeline in years to come.

Jason Mitchell (35:29):

There's a lot of talk about a post-pandemic global reset, and you hear refrains like Build Back Better all over the place. And you know, I'm going to ask you to put your economist hat on. What do you think are the necessary ingredients for that reset to produce more balanced economic growth pushes back on protectionist leanings and reinforces public policy?

Dr. Dambisa Moyo (35:51):

The truth, Jason is that we're headed into a continuum, very challenged environment, as far as I'm concerned. There's no doubt about it, that the massive stimulus that we've seen and obviously the fact that aggregate demand, which was shut down last year, as we all stayed home is now going to be reopened because we're getting vaccinated and we're being sent right back out there, but we should not confuse a rebound with a recovery. What we're seeing in the markets hitting new highs, et cetera, that is for sure a rebound, but that doesn't take away the fact that even before we headed into this COVID environment last year, we were already dealing with a whole host of economic problems in the aftermath of the 2008 financial crisis. We had impotent public policy, negative interest rates, lots of debt. We had low growth forecasts, which really have not gone away.

Dr. Dambisa Moyo (36:40):

If you start to look at the post 2022 forecasts, such as those from the IMF, we start to see that drag again, and then a whole host of headwinds from a technology. And the job was underclass, massive demographic changes, income inequality, as well as broader inequality, climate change. All of these were drags before COVID hit and I'm afraid have not been resolved. What does that mean? You know, from my vantage point as an economist, I think we really need to think about these challenges of challenges of digitalisation, which could lead to greater unemployment as a specific example, and think about growth narrative that is going to continue to be critical. I think that to the extent that people are thinking about growth and economic growth as being the backbone of that, I don't think there's enough of a conversation with respect to how we're going to deliver economic growth in a world that remains challenged. And to me, that's the most important thing.

Jason Mitchell (37:38):

Yeah, I was hoping for something a little more optimistic after getting my first jab a few days ago, but… [laughing]

Dr. Dambisa Moyo (37:44):

Well, I can give you some often optimistic view is that there are, I think leavers of public policy can draw. And I think technology, we have not yet seen what technology is going to do in public policy. Things like education and healthcare, we've seen what they can do in consumerism and networks with social media. But I mean, I'm very hopeful that we'll see an uplift in areas of public policy. We've not yet seen the full force of China. China is the only large economy that didn't slip into recession in 2020. I mean, I just saw their 18% growth forecast. I mean, they are on fire. And I think we now know that China is now the biggest foreign direct investor, the biggest trading partner and the biggest lender to many countries developed and developing around the world. I think that that's a watch this space that could be a transformative for the world. And then of course the green agenda, the transition in energy, I think could be a real opportunity again, if it's not just viewed from the lens of risk mitigation, but we start being much more aggressive and optimistic around what this means for upside leverage and opportunities.

Jason Mitchell (38:51):

That's what I'm talking about! So last question, and this one comes from the left field. So I, like you am a marathoner, although I am not as, quite as accomplished in terms of running the number of marathons, but I'm wondering, coming out of the pandemic, what's the first one on your to-do list?

Dr. Dambisa Moyo (39:07):

So I just registered for New York again, I've done the New York marathon twice and I've also run the London marathon. I love marathoning, but I'm not sure my body really likes a marathon anymore. So I've registered for New York this November 2021 fingers are firmly crossed that I'm able to do it. But that's the plan in the sense.

Jason Mitchell (39:29):

Great, good to hear. So it's been fascinating to discuss how that nature of board oversight is evolving, what that means in the context of greater pressure on socio environmental issues and why calls to reform capitalism likely mean a turn towards a multi-stakeholder model and away from traditional shareholder centrism.

So I'd really like to thank you for your time and insights today. I'm Jason Mitchell, co-head of responsible investment at Man Group here today with Dambisa Moyo, international economist and author of her new book. How boards work out this month, many thanks for joining us on a sustainable future. And I hope you'll join us on our next podcast episode. Thanks so much, Dambisa this is fantastic.

Dr. Dambisa Moyo (40:10):

It's been a thrill. Thank you very much for hosting. I really appreciate your questions and your interests.

Jason Mitchell (40:15):

Once again, thanks to Dambisa Moyo for joining me on A Sustainable Future with her latest book, How Boards Work and How They Can Work Better in A Chaotic World now available we're giving away copies to the best comments to this episode on social media. Just be sure to tag us and the podcast.

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