Agenda item

The Board received a presentation from James Perry, Chief Executive of Panahpur, after which Members of the Board had the opportunity to ask questions.

Mr Perry gave an overview of his experiences within the social investment market and how he had approached it through both business and charitable foundation perspectives. He advised that the financial system’s exclusive focus on maximising shareholder return ignored the possible social and environment costs arising from investments. This narrowed the parameters within which charities were able to operate, but that this had been widened through ‘Charity and Investment Matters, a Guide for Trustees’ (CC14), which confirmed that trustees could invest ethically, sustainably, for a financial return, to achieve charitable aims, or for a mix of all or any of these. Mr Perry advised that social investment was an evolving field, with movement to create social value and shareholder return without an asset lock. In response to Members’ questions, Mr Perry confirmed that his company, COOK, had certified as a B Corp in 2013.

A Member queried the effectiveness of the B Corp movement against the traditional approach of making financial decisions based purely on financial grounds, and then distributing wealth in the form of grants to avoid any trade-off between financial and social return. Mr Perry agreed that there would be tensions between short term and long term benefits, but advised that the B Corp movement sought to combine social and financial goals through robust alignment and structure. If this could be done, then these companies’ solutions could be scaled up as they could attract and efficiently allocate capital.

Members discussed CC14 in more detail, noting charities invested to further their charitable aims through financial investment (to maximise financial interest), mixed motive investment (to make risk adjusted return as well as social impact), or programme related investment (to maximise social impact), and there were specific legal duties and decision making processes attached to each. In response to a Member’s question, Mr Perry advised that social investment was experiencing a paradigm shift. Nevertheless he felt that it would take time for there to be a material change from the past tendency of business-focused companies to be concerned that social investments would result in a lack of focus, and that social-focussed organisations to be concerned about greenwashing (i.e. claiming to be socially or environmentally-friendly when not).The B Corp movement foresaw a holistic way of operating, but there were numerous structural and cultural barriers to overcome. 

The Chairman thanked Mr Perry for his presentation.