1.
The Future of the Company
Insights From Multiple Expert Discussions Around The World
4 December 2018

2.
Context
This point of view builds on prior global dialogue on the social value of the
organisation, the future of the company and work plus recent debate on the
value of data and British Academy research on the future of the corporation.

3.
THREE AREAS OF FOCUS
CORPORATE
PURPOSE
ORGANISATION
3.0
THE DIGITAL
COMPANY

4.
CORPORATE PURPOSE

5.
Companies with Purpose
As trust in business declines, structures and practices of corporations come
under more scrutiny. All companies are called on to improve performance on
environmental, social and governance and ESG reporting is compulsory.

6.
A Problem of Focus
Corporations were originally established with clear public purpose –
but today many corporate purposes focus solely on profit. Instead of
being part of society, numerous organisations have grown apart from it.

7.
Disconnected Business
Many big businesses have become disconnected from broader society.
The narrow focus on short-term returns has prevented companies from
investing in innovation to foster long-term sustainable growth.

8.
Balanced Purpose
Leaders propose that companies adopt a social purpose that takes precedence
over, or is balanced with, its commercial purpose: Purpose should be intrinsic to
the core of the business and not just driven by shareholder interests.

9.
Long-Term Perspective
The primary interest of the board should be its long-term success in
achieving the purpose for which the company was incorporated:
Innovation and exploring new opportunities is key to sustained growth.

10.
Integrated Reporting
In just over a decade integrated reporting has been picked up by an
increasing range of companies who want to the ability to tell a story
about the bigger picture – one often overlooked in quarterly reports.

11.
A Greater Purpose
Directors should act within the planetary boundaries and social foundations:
Maybe the future purpose of corporations is to produce profitable
solutions to the problems of people and the planet?

12.
THE DIGITAL COMPANY

13.
Increasing Value of Data
As organisations try to retain as much information about their customers
as possible, data becomes a currency with a value and a price.
It therefore may become openly traded within new marketplaces.

14.
Outdated Perspectives
There is a fundamental difference between the economics of production
of physical vs. digital products (atoms vs. bits). Many companies are still
following principles established during the first Industrial Revolution.

15.
The Rise of Intangibles
In 1975 17% of the market value of the S&P500 was based on intangibles:
By 2015 this had flipped to 84%. Many leading companies are now
focusing on innovating to build IP, brand value and other key assets.

16.
Speed to Scale
Digital firms face no limits in ability to scale – the bigger they are the bigger they
are likely to become. Greater connectivity shrinks the time to 1bn customers and
a $10bn valuation. Revenue / employee is $1m - 20 times traditional leaders.

17.
Growth Opportunities
With faster change and the 4th Industrial Revolution building traction, many see
a major impact on jobs - creating new ones but rendering others redundant.
Several view capturing opportunities to be a significant driver of growth.

18.
Reinventing Roles
Will the shifts ahead drive mass unemployment or can the evolutions that
replaced blacksmiths with car mechanics be repeated? Technology will have a
fundamental impact on roles that are currently part of our social fabric.

19.
Data as an Asset
A firm’s data is seen as an asset and as a liability. As it is increasingly traded,
Integrated Reporting will include data as a ‘capital’ alongside financial, social,
environmental and human capital. Annual reports reflect this.

20.
ORGANISATION 3.0

21.
Organisation 3.0
New forms of flatter, project-based, collaborative, virtual, informal organisations
dominate - enabled by technology and a global mobile workforce.
As such the nature of work and the role of the organisation blurs.

22.
The Nimble Organisation?
Traditional firms are going out of business quicker: Over the last 30 years
the ‘average lifespan’ on the S&P500 has dropped from 35 years to 15.
Growth companies today make decisions through collective wisdom.

23.
A Change in Structure
There is a shift from vertically integrated to horizontally specialised firms – from
product to platform and from sector to ecosystem: Firms are moving from being
a nexus of contracts with standardised rules to mechanisms of coordination.

24.
Reskilling and Upskilling
As some sectors and countries gain from new technology, others will
correspondingly lose out and fall behind. A response to this will drive both the
call for more reskilling and upskilling as well as an inevitable surge in migration.

25.
Smaller ‘Big’ Companies
The employment pool expands with ‘on and off-balance sheet talent’. In 2008
the world’s ten most valuable companies employed 3.5 million. Today, the top
ten companies are worth twice as much, but only have 50% of the employees.

26.
The Freelance Economy
The majority of us will be independent ‘free agents’ available for work as
projects require. Last year 36% of the US workforce were freelancers - many
expect this to rise to 50% by 2030. Up to 60% of freelancers are professionals.

27.
Projects Not Jobs
Many see the future organisation as increasingly flexible, permeable, flat and
virtual. Companies shift from being employers to become the bodies that create
or coordinate projects that an increasingly freelance population delivers.

28.
Projects Worth Working On
‘Funky Business’ focused on a world with a few elite “people worth employing”
and a select range of “organisations worth working for.” Going forward, we may
be focused on the “talent worth accessing” and “projects worth working on.”

29.
Future of the Company
The whole notion of an organisation has to be updated:
The future of the company is as much in flux as the future of work itself.
Innovation to drive long-term growth in a digital world is critical.

30.
QUESTIONS

31.
MORE INFORMATION
Future Agenda
www.futureagenda.org
Future of the Company (2015)
https://www.futureagenda.org/view/initial_perspective/the-future-of-company
Future of Work (2018)
https://www.futureagenda.org/news/future-of-work
Integrated Reporting
http://integratedreporting.org
Future of the Corporation (British Academy)
https://www.thebritishacademy.ac.uk/future-corporation
Purpose of the Corporation (Frank Bold)
http://en.frankbold.org/our-work/campaign/purpose-corporation

32.
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