Margaret Casely-Hayford: ‘I am really optimistic that we are at a turning point’
The first black woman to make Partner at a City law firm, Margaret Casely-Hayford CBE has taken leading roles in purpose-driven businesses from John Lewis to Co-op, where she currently sits on the board. She tells Lysanne Currie about the progress of stakeholder capitalism and why employee education investment is key to driving purpose and trust in UK plc
“It was all hands on deck,” says Margaret Casely-Hayford CBE as we kick off by, as is now the norm, sharing experiences of the extraordinary past 12 months. Casely-Hayford is talking about her board role at the Co-op, a business that proved among the most agile as lockdown struck. Its community support was fast and admirable: initiatives included creating a fund for customers to donate shopping rewards to those less fortunate (CEO Steve Murrells donated 20% of his salary for three months) and turning over Easter TV advertising airtime to food bank FareShare.
Casely-Hayford, who joined the board of the Co-op in 2016, puts its ability to pivot fast down to its historical sense of purpose. “Established to help the communities in which it trades, it readily supports food banks, and was one of the first food retailers to get behind Marcus Rashford’s campaign for children. Its app and employed team of ‘member pioneers’ link people together to find out who needs what – money, skills, time – in your community. It was really impressive. All that came out of having purpose as a fundamental value and the key stakeholders in mind.”
Collaboration is a principle. The board was closely involved with the fast-moving situation. “We had to make quick decisions,” Casely-Hayford recalls. “Suddenly people were convenience store shopping rather than supermarket shopping, so we had to quickly make sure we had the necessary throughput of food; while the Co-op funeral service dealt with unprecedented levels [of demand].”
At the start of the first lockdown, Co-op created an extra 7,000 jobs in its stores to cope with increased demand, and offered temporary employment to hospitality workers who’d lost their jobs. The crisis presented both board and management with a sensitive balancing act, however.
“We had to make sure we were doing the right thing, but that can be difficult when other enterprises were not. They can afford to spend huge amounts on advertising, or invest in price and push prices down. But we knew if we pushed price below a certain level, one of our key stakeholders – suppliers – would suffer. But by having the infrastructure and embedded values, we could make the right adjustments and be good to go.”
Integrity is in Casely-Hayford’s blood – as is influence. In 2008, the Powerlist named the Casely-Hayfords the most influential black family in the UK. Her grandfather, Joseph, was an influential politician in the Gold Coast [later Ghana] whose 1911 novel Ethiopia Unbound is cited as influencing pan-African politics and 20th-century civil rights activists.
Her uncle, Archie, defended independence leader Kwame Nkrumah in court against the Empire’s lawyers, was a minister in his government, and helped to write Ghana’s constitution after independence from Britain in 1957. Casely-Hayford’s mother worked for the British Council and her father trained as a lawyer in Britain before switching to accountancy. She has three brothers – the late Joe, a leading fashion designer, Gus, a cultural historian and Director of the brand-new V&A East, and Peter, who was Managing Director of independent TV company Twenty Twenty.
After graduating from Somerville College, Oxford, Casely-Hayford was called to the Bar in 1984, joined law firm Denton Hall (now Dentons) three years later and was made Partner in 1998 – the first black woman to hold the role at any City law firm. She left in 2006 to become Company Secretary and Director of Legal Services at John Lewis Partnership (JLP).
Her time at the retailer had a profound impact, confirming her views on the correlation between board diversity and success, as well as her passion for stakeholder capitalism. “We’d inherited a structure that sees purpose as being the financial imperative, and that has been shown to be wanting,” she says. “Organisations that just drive the bottom line, because they see themselves as having a purpose of delivering to the primary stakeholder, the shareholder, are becoming increasingly less relevant. I’m really pleased about that.
“I have been fortunate enough to be part of two organisations that are purpose driven in the wider sense – Co-op and John Lewis. It’s such a good discipline to think about purpose as involving a wider range of stakeholders and I find it fascinating that back in 1948 John Spedan Lewis, the founder of the partnership, wrote about this in a (very slim) volume, Partnership for All. He outlined principles key for business enterprise, having to ‘have regard to’ the customer as a key stakeholder, the supplier as another, then the neighbours and the community. And he said that we all have a duty to tread lightly on the environment. The primary stakeholder shouldn’t be just the person who invests their money into the business. He said, ‘What about those people who invest their time and their energy – the employees, the fifth and really important category of stakeholder?’
“His view was that, when planning, business should always think about those stakeholders and the impact [of any decisions] on them. The whole of JLP was built that way. It wasn’t necessarily all altruistic – he saw it as a better way of doing business. It was about making sure that you’re doing the best to build an environment in which the business can thrive.
“What is interesting is that the sustainability agenda has become more important. ESG as a method of analysis is becoming the critical way for businesses to explain themselves, their strategy, resourcing and delivery. That’s brilliant – it means we are recognising our responsibility to society and building trust.”
Casely-Hayford is a fan of making companies accountable and praises Larry Fink and BlackRock for putting sustainability and diversity first. “They noticed that, particularly during the year of the downturn, the stronger performers were the ones who prioritised ESG,” she says. “They had sustainability-related themes, they performed better, their resilience was stronger.
“I find this fascinating. It shows that paradigm shift in society. Boards have become much more engaged in asking management to deliver against an ESG agenda when building remuneration. This is really strong, because previously ESG was left to chance.”
Casely-Hayford talks gently but with strength about what is really needed to drive ESG in companies and cautions against leaving it all to one person: “What you can’t do is to appoint one individual in middle management to try to change things because they’re the diversity officer. It’s important to have board champions to look at the way in which the objectives are embedded within the whole accountability infrastructure, the performance criteria needed and the reward given against those criteria. These all need to be properly built into the way in which the organisation is structured. That way, if the chairman retires, or the chief executive gets run over by a bus, it doesn’t disappear.”
But she says there also needs to be a fundamental change to the law if the pace of purpose and trust-building is to maintain momentum. “Over time, society’s changed. We’ve become much more aware of all the stakeholders,” she says. “The Companies Act 2006, Section 172 is now enshrined in law, the importance of ‘having regard to’ the stakeholders, which is wonderful. But it’s not yet a director’s duty – that needs to happen, it needs to become enshrined in law.
“It would mean the government changing section 172. There is a group of people pushing for that change, but I’m not sure how much leverage there is at the moment because the government is so keen to make sure fortunes change after the pandemic – anything that could look like less than full focus on the economic outcome might seem a drag. Personally, I don’t think it would be – it just needs to be looked at properly.”
Invest in the future
Casely-Hayford believes the shift to purpose-led businesses has moved so far that, even when tough financial times return, sustainability can’t be sidelined. She accepts the job of finance professionals has become more complicated – not only making the numbers work but ensuring purpose is central and the supply chain ethical. But she sees this as both essential for a company’s reputation and a key positive for its future.
“For example, the knowledge that your supply chain meets decent objectives is actually a sound investment,” she says. “Not doing so could destroy your reputation at some point if, for example, workers are injured due to the negligent conditions in which your suppliers operate. The damage from that sort of reputation is so difficult to return from. Purpose is cost efficient in the long run because you’re minimising risk. Doing good is not just nice to have, it’s become a must-have.”
Casely-Hayford also asks business leaders to invest in upskilling – an imperative to future-proofing jobs and business. “It’s one of the things I would be really excited to see,” she says. “We are going to need a continuing basis of learning to keep people agile, to deal with the technological advances that will inevitably come, making things simpler but producing redundancies.
“We could say ‘let’s live with that’, but we don’t have to – let’s give people new skills instead. Let’s have a process where stakeholder responsibility means making sure your employees are upskilled to be sufficiently agile and can be redeployed within your business, or go somewhere else. We offer pension schemes, but now’s the time to offer education investment packages. That investment in the employees will be a critical aspect of the S of the ESG and key to future-proofing.”
Casely-Hayford believes now is a truly exciting time for business. “I am really, really optimistic,” she says, “because I think we are at a turning point. Yes, change is needed, but rather than people waiting for the government to do something, a lot of organisations are just doing it themselves. That’s wonderful.”