52. Karma Capitalism: Why being a good business IS good business | James Reed CBE

0:00Welcome to All About Business with me, James Reed. The podcast that covers everything about business, management and leadership.

0:16For more than 60 years, Reed has been helping people find jobs they love. Giving back has always been baked into the company's DNA. Through their philanthropic arm, Big Give, they've helped raise over£360 million for thousands of UK charities. I'm Alex Day, Managing Director of Big Give, and today I'll be interviewing James Reid on his new book, Karma Capitalism. The book is about how companies and philanthropy can work hand in hand and why being a good business is good business. So James, this is all about business with a difference. This episode, you're the guest. How does it feel to be on the other side of the table?

0:50Well, Alex, thank you for inviting me as a guest on your show. I'm getting used to the experience. It's a little odd being on the left side of the table, but I'm very much looking forward to this discussion, this conversation. And I'm really pleased that you've kindly offered to host. Not at all. And for your regular listeners, normal service will resume on the next episode. So fear not, James will be back in the hot seat next week. James, we're here to talk about your book, Karma Capitalism. Tell us about Karma Capitalism. Well, anyone watching will see that it's orange. I should describe the scene.

1:21We're surrounded by copies of Karma Capitalism here in the studio. And it's a small orange book that contains a big idea, Alex. And I hope it's a big idea that will catch on. And I hope a lot more people will become karma capitalists. And a lot more companies will become Philco's or philanthropy companies. But I can explain more about that in a minute. So this book is part manifesto and part how to guide. but i believe it has the potential these ideas or this simple idea really has the potential to improve capitalism and improve society all in one short book how about that that's that's pretty impressive and i have to congratulate you on it have you read the book alex preparation wasn't it yeah you should have done took a few hours to read and i agree that it's a small book with a big idea and so tell us about what is the big idea well karma capitalism is a sort of business philosophy, I suppose.

2:20You could call it a new variant of capitalism, but in another way, it's a very old version of capitalism that's very people-centric. And the way it's formulated in the book is simple, because we have settled upon a definition of what we call a Philco, or philanthropy company. And the definition that we've settled upon is that a philanthropy company is a company in which at least 10 % of the shares are owned by a charitable foundation. So a charity owns at least 10%. It can be more than that, but it can't be less than that. So the charity owns 10 % plus of the shares in that company. What does that do?

3:01Well, really interestingly, we discovered this by accident at Reed. It changes the DNA of the business. And, you know, in evolution, little changes in DNA in animals and life make really big differences. Well, that's what we've discovered this did in our business and in others like us where charities have a percent of the shares. So I describe it as not a different way of doing business. It's a different way of being a business. So it really significantly changes the nature of the business. You know, it gives it a bigger heart, I believe, and it makes it more fit for purpose. And there's some, I mean, there's some really powerful ideas in what you've just answered there.

3:42and I'm keen to unpack all of that. I guess to take a step back, what sort of led you to write this book? I mean, you start the book with a kind of 10 years ago story about a literal cliffhanger. And whether you knew it or not, that's very much part of this. Well, yeah, that's interesting. So the book begins with the introduction. It's called My Wake Up Fall. And it was literally that. I was climbing with my son, Harry, a few years ago, the Matterhorn Mountain in the Alps. The Matterhorn is that really beautiful one that looks like the Toblerone. Toblerone stole it, but it's a beautiful, beautiful mountain on the borders of Italy and Switzerland.

4:22And I'd set my heart on climbing this mountain with my son, Harry. I'd turned 50, he'd turned 18. This was a father-son bonding trip. And it went horribly wrong. So, you know, I've been to talks in the past where mountaineers talk about overcoming all these challenges and summiting some great peak like Everest. and they get a standing ovation from the attendees. Mine was nothing like that. It was a journey that ended in pain and fear and failure. Because we set off on this expedition, and it snowed in September. It wasn't meant to snow in September. But this meant that there was a covering of snow on the mountain over ice that had hardened all summer in the heat wave.

5:06And it made it really dangerous and really slippery and i fell not once but twice so i had two wake-up falls as it happened the first time i very nearly killed myself and the guide i was attached to by rope when i slid down a traverse and was a meter from falling you know thousands of feet to my death and i managed to stop with an ice axe which i laid upon and it acted as a break just before we would have gone off the cliff. And the second time, you're going to realize I'm not a very good mountaineer. I was abseiling, went too far with a rope and ended up at the end of what's called a pendulum fall.

5:43So if you imagine 90 kilos at the end of a long rope swinging and dangling with a broken leg from a rope in plain air off the Matterhorn. And Stefan, my guide, couldn't see me because I'd gone around a corner on this pendulum fall. And I remember him shouting, he said, are you okay? and i thought well i'm still alive so i said yeah i'm okay but i've broken my leg i said and he said how do you know you've broken your leg and i said because my foot's pointing in the wrong direction then i heard him go oh shit so then he managed to get a rope to be pulled me so eventually i was pulled to a ledge rejoined reunited my son harry and they called the air ambulance and you're high on a mountain it's quite interesting the air ambulance comes the helicopter you can see it below you, slowly ascending, coming up, coming up, coming up.

6:33And I saw this helicopter come up, and then it came up above me, and I saw a figure coming out of the helicopter on a cable being lowered down. And when this figure landed right on the ledge next to me, she said, my name is Roberta. Do you want to speak Italian, French, German, or English? Wow, that's service, isn't it? Oh, that was, I thought Roberta was an angel. I mean, I still do. And you know what? We found Roberta, and she's got a copy of this book. because her picture is in it shout out to roberta she's superhero and and her italian rescue crew they were brilliant so they basically saved my life pulled me off the mountain but what happened after that is where my wake-up fall really occurred because i spent quite a lot of time in hospital and then in bed recovering from my injuries from this expedition and it gave me a lot of time to think and i really became quite sort of settled upon the fact that i wanted to have more purpose in my life especially as it was now the second half of my life and wanted to live more purposefully and i also became quite settled on the fact that our company and the big give the charity that with which it was associated could do a lot more so i found it actually it was it was a big wake-up fall because i found it very energizing in the end and i saw stefan gat my mountaineering friend just the other day and and i actually said you know surprised we'd say it and he looked quite surprised he said i'm actually glad i had that accident because it it made me think again about a lot of things and one of the really obvious things is how interconnected we all are and how interdependent we all are and why you know it's really important to understand that because it's so easy to become preoccupied with oneself and think i can do it all yeah we can't yeah and as such a profound moment and as you describe it a moment of failure but i think i call it my double failure right because we didn't get to the top or the bottom but i guess i guess for all of your listeners you know this is all about business and there's probably a lesson there isn't there for for leaders of business for people involved that out of failure can come some quite sort of seminal moments and as alec reed said on one of our earlier podcasts you know failure is a sign post yeah there's a signpost suggesting you might choose another direction yeah yeah so it was literally in this case but what prompted me to start the book with that story was not i mean it's a good story and it was for me it was a powerful moment in my life but what prompted it was a question i was asked by a professor from harvard business school professor lauren cohen he was visiting us recently and he asked me the question what's the most defining moment of your career so far what's the most defining moment and i started thinking about lots of things and then i settled upon this because and it was sort of unexpected didn't happen in the office wasn't work related but it changed everything yeah and that's what prompted this so the big part of the karma capitalist message is you know having a purpose-driven enterprise yeah or you know i call it values-led purpose-driven and a big part of it is this ownership change in the dna Yeah.

9:48Because the other thing that happened, another accident or sort of unexpected turn of events happened to my father 40 years ago when he was diagnosed with cancer at the age of 52 and given a 40 % chance of surviving. Yeah. And he did survive. He's now 91. But that diagnosis made him think rather seriously about what he wanted to do. This is the genesis of the Reed becoming a Philco, right? Exactly. So we became a Philco Reed. Our business, just to explain, has 18 % of its shares in the Charitable Foundation. We became a Philco Reed by accident, because back in 1986, when my father was diagnosed with cancer, he had been working incredibly hard.

10:37Business was really tough. There'd been a recession. and my mother actually said you should lighten your load and sell a company that he had at the time which was a drugstore called medicare you should sell it because you're working all hours and it's making you ill and they did sell it quite successfully and he he ended up making five million in cash from the sale i think he owned 25 of it but because he'd been diagnosed with terminal well potentially terminal cancer 40 chance of survival he thought well if i die most of that money is going to go in death duty and tax or capital gains tax so what else could i do with it that might be more constructive or productive and he decided to put that into a charity he gave the five million to a charity it set up sometime before read charity but then interestingly that charity bought the shares in the business because coincidentally a competing recruiting recruitment firm had built up a stake in our business.

11:35I think they might have thought at some point they might take it over. But then they'd lost interest and he was able to buy their stake. So he went in at more than 10 % and he was able to, then the charity was able to increase its stake. So that's how Reed became a Philco when the founder, the charity that he had set up, bought shares in the company. So James, very selfishly, I'd love to talk about Big Give because the Reed Foundation has been a huge backer of Big Give. Tell us a bit more about sort of how it all works and what the impact has been well thanks for asking i mean you say selfishly because you're the managing director of big give and you run it brilliantly big give is a charity platform that matches donations made by members of the public to charities they want to give to and it does that beautifully it makes it very easy so you i've timed how long it takes me to make a donation from apple pay to a big give appeal it's less than 15 seconds i'm at now so So, you know, it's like a Formula One pit stop.

12:32And so it's a really good way to give money and it gets multiplied. And I think you said it yourself, you know, generosity is contagious. So the big give is a wonderful way for charities to raise money, for us to donate to charities because it gets multiplied up. And it's contagious. It really works well. And the way social media works, you know, we're able to spread the word and really have quite successful appeals. that you know the next one and our most important appeal of the year obviously the christmas challenge we raised 45 million last year in a week be just wonderful to beat that this year that's what i'm really hoping we can do but how does that sit with philco well i like the marriage here between philco philanthropy company and phil tech philanthropy technology which is the big give and because the big give gives an outlet for our donations that multiplies up their impact so you know we make more than double the difference because we double double so we get four or five times the impact by donating through big give and the fact that big give is there should be positive news for anyone else thinking of being a becoming a Philco because they can channel their donations to good causes they want to support through that route really successfully and achieve a multiple in terms of their impact.

13:56And, you know, a Philco could choose just a single charity they want to support. And if they did it through Big Give, they would get much more impact. Or they could choose a sort of selection. It could choose a theme where maybe they want to support the environment or kids' education or whatever it is. And that is a really powerful way of combining Philco with Philtech to really maximize our impact. So it's amazing when you use these new technologies, how it really increases our reach, both in business, but also in philanthropy. And that's what I love about the big give. I mean, it's worth mentioning that it only employs 10 people and it raises tens of millions of pounds every year.

14:42so it's a really efficient way of supporting charities and it's well married to the philanthropy company movement and you touched upon a theme there which is around efficiency right i guess that's a topic that lots of people are concerned about when they consider charities is how efficiently are they using the money now i know for the reed foundation that owns 18 of the reed business they obviously have a board of trustees that are not paid but they don't employ any staff they don't have any overhead themselves and so you know the majority of the money save for a few your administration costs is going to the Big Give and sort of giving money away.

15:16So Big Give is doing the due diligence on behalf of the Reid Foundation. How important is that for you as a trustee of the Reid Foundation? Well, I like the fact that I know the charities that are sort of on the Big Give have been sort of invited to participate through the Big Give, have been vetted. You do due diligence. And I think that's reassuring. and so i know there's a sort of quality standard that is is acceptable um and it's good to know that other people are auditing and doing a bit of due diligence as well i mean some of these charities are very well known to us and some are small and i think it's really important that the smaller less well-known ones get some oxygen get some support and so it's good that the big give does that because it makes it possible for them to raise money that they so badly need and yeah i'm And really, I feel that it's a really efficient way of channeling our funds out into the community.

16:16Thank you. And thank you for the support. So we say at Reid, one day a week we work for charity. Right. And people like that. Yeah. People are engaged by that. And unpack what you mean by that, James? Well, 18%, roughly 20%, equivalent of one-fifth of the business is owned by charity. Yeah. One-fifth of the week. If you work five days, one day a week you work for charity. I mean, if it's Fridays, probably people put in 18 % on Fridays if they're doing well. I mean, I hope so. But yeah, I'd like to get it to 20 % actually. So hopefully over time we'll increase that. Charitable shareholding, so it is actually 20%.

16:50Amazing. And you mentioned your father there. I've had the great privilege of knowing and meeting Sir Alec. And tell us about the sort of, I suppose, the benefits that both you and he have seen and the rest of the business in terms of Reid becoming a Philco. what's that meant for you well i suppose we were both fortunate enough to survive near-death experiences in our early 50s and i think that probably changed us both but the the philco journey has been well our business lives really for the last 40 years and it's something that i've become so sort of familiar with it's almost hard to sort of separate it from not being of Philco but the the key point is that our company has a different DNA and that means I think for customers it's more appealing well for some types of customer so customers who care about whether businesses are good businesses or you know are responsible in their communities and societies are drawn to us because of this structure feedback a lot yeah I mean we yeah customers say i like the fact that you're partly owned by charity and and so do our co-members people coming to work for the company we hear a lot from them too so i suppose you know if there's a decision to be made should i pick this company or that one whether it's to work in or whether it's to be a customer it can tip the balance in our favor and you know over time if lots and lots of those decisions are being made it makes for a better business so our business is super competitive I mean, some people think, oh, charity, probably all a bit soft-headed, you know, but it's not like that at all.

18:33Charity is a shareholder. The business is run like a commercial enterprise and it's super competitive. And you can see that interestingly with other Philco's because there are other companies around the world. Yeah, I was keen to ask you about those. Also Philco's, and it's interesting researching the book, how I've learned more about them. But, you know, fabulous businesses. I'm talking sort of companies like Ikea, Lego, Carlsberg, like Maersk, Nova Nordisk, fabulous companies that are really market leaders in their own areas. They're all Philcos. And you know what? They'd last it for years. I mean, some of these companies are nearly 200 years old.

19:09And so they have much longer trajectories often than regular businesses. And they're much less sort of vulnerable to sort of capture by private equity. And do you think, I mean, I was surprised looking at that list how many of these well-known brands are actually Philco's do you think it's a story that they tell well enough well part of the what a big part of my motivation for writing this book was to get this message across what was to share the philosophy of karma capitalism the way I think about it karma capitalism is the philosophy but the Philco philanthropy company is the vehicle that delivers it yeah so we need more fill codes for sure yeah i mean they're good companies to work for they're good corporate citizens they pay a lot of tax and they deliver good goods and services so we need more fill codes and i think the the idea is not well known so a big reason for my putting pen to paper was to make this idea better known right and i hope you know i hope this book if just one company just one company becomes a fill code as a result of this effort for me that would be worthwhile yeah because i know that the consequences of that decision are huge yeah i know that you know the benefits that can accrue through the charity you know spinning off i you know funds to all sorts of good causes yeah is massive yeah because i can see that from our own business yeah so it just one company becomes a fill code that's good but lots do yeah that would be incredible yeah yeah and it would make a huge difference yeah you know i get up every morning early and listen to the radio morning after morning there are people on the radio saying there's some problem they need the government to spend more money on it the government doesn't have any more money yeah yeah and uh business has shed loads of money i mean it's got cash up to its ears a lot of businesses if businesses were all set up as filco's there'd be huge amounts of money coming out into society and the environment all the causes that people care about and there'll be a huge amount of social entrepreneurs who are able to take dynamic action to make stuff happen stuff isn't happening at the moment society's all knotted up and people are fed up so this would unleash a whole lot of energy that could be deployed usefully in all sorts of good and not just energy capital right yeah real energy yeah money that makes stuff happen but i but don't mean just money.

21:36I mean, the money and the desire and the will to do things. Absolutely. Because a lot of these charities that we've supported over the years are run by really great local social entrepreneurs. So this would give them the means to do more work. And one of the key themes that came out for me in the book, James, was around longevity. And I just wonder if you could sort of speak to that a little bit. You've mentioned about your research of a lot of the big brands. I know a lot of entrepreneurs. Yeah. So, you know, and I love talking to them. Every entrepreneur who's come and sat in the seat I'm now sitting in has shared an idea that I thought, oh, that's interesting.

22:12I'm going to go and try that or deploy that. So I think a lot of entrepreneurs, they build a business and then they get to a point where they wonder what to do next. And some of them become family businesses. Some of them don't. Some of them get sold. I've met a lot of entrepreneurs who have a sort of remorse around selling the company they started is because i think they feel a sort of real attachment it's like one of their children almost that they feel a seller's remorse and they're sad because they've seen you know the new owners maybe take it in a direction they don't particularly like or mess it up or you know there's a lot of examples some of them are in the book but if they're a philanthropy company or set themselves up as a philanthropy company they and potentially the next generation and or their workforce are fully engaged going into the future because they've got the benefits that the philanthropy company brings to the wider society so that gives the entrepreneur that does this a legacy so james one thing i've folded down the page here one thing that really struck me in the book um was this line one study found that the probability of companies with this structure i.e.

23:26being a Philco, surviving more than 40 years is 30 % compared with just 10 % for other firms. Is that something that really stood out to you? Well, yes, because if you analyze that, it means that a Philco is three times as likely to last 40 years than a non-Philco. So if a business founder or leader is trying to build a business for the long term, that suggests that Philco status is a really good way to go. The other interesting, there's a graph in the book that shows you that Philco's over a significant period of time, including the pandemic, have been more profitable than non-Philco's. So they last longer, and they make more money.

24:11And if you multiply years by profit, that's a big difference. So three times as likely to last to 40, and much more likely to make more money. So it's a really good business model, in short. So another question that the wonderful Professor Lauren Cohen from Harvard Business School asked me, he said, if I mentioned the names Carnegie and Rockefeller, what do you think? And I said to him, well, they're great philanthropists. He said, that's interesting, because at the time when they were active, they were known as robber barons. These were ruthless business people in America who were making a lot of money.

24:49And later in their careers, I don't know what happened, but they decided they should probably give quite a lot of it back. and that's what they remember for now and you know bill gates amazing entrepreneur microsoft the wealthiest company i think on the planet right now i think bill gates will be remembered for what he's done with this foundation yeah and and the work that it's done you know eradicating malaria for instance so for these really dynamic entrepreneurs who are building businesses this gives them a route to a really long-lasting legacy yeah and it also means their businesses carry on successfully for a lot longer, it seems.

25:25There were some great books written when I was earlier in my career that I read zealously. You know, one was called Built to Last. Another was called In Search of Excellence. Another was called Good to Great. These are really good business books. And they were all looking for the sort of holy grail of what is it that makes a company successful? What is it that makes a leader effective? how how can we make our businesses you know really spot on and and fit for the future and then when i got all these ideas and then mckinsey did a sort of analysis of the companies featured and and said there was only a 52 to 48 chance that they would do better and several of them have gone bust or been taken over and and then when i was researching for karma capitalism these Philco companies I was looking at I certainly noticed they're really old and they've lasted a long time they've actually achieved the longevity that in search of excellence and built to last were aspiring to yeah so in a way by looking from the other side let's find some old companies what characteristics do they share well one really important one I would suggest is their Philco's Yeah.

26:39They have a different DNA. Yeah. Like people who live a long time, the lucky ones have good DNA. Yeah. Yeah. Same with businesses. Yeah. That's really interesting. And you, I mean, you mentioned legacy there and obviously you've talked about the accident that you had, you had time out. You obviously speak to a lot of business leaders. Do you think legacy is a topic that sort of entrepreneurs, business leaders are thinking about? Well, they told me they are. Yeah. Yeah. I mean, I think if you, if you've worked all your life, I mean, I mean, do you just want to be a rich person or do you want to do something a bit more interesting i would challenge them i mean my father uses the term financial obesity he says he would like to relieve people of this problem by helping them make donations through big give and other charity platforms well yeah i mean financial obesity doesn't sound very attractive and i can't really see the point of just accumulating more and more money yeah when you could be doing something much more interesting and be much more engaged and change the world in a good way.

27:37I mean, what do you hope your legacy will be? My legacy? Well, if I could write the future, I'd like to see lots and lots of companies becoming Philco's and karma capitalism being the new form of capitalism. That sounds like a big ask. And it kind of is. But I don't think socialism works. I don't think hyper capitalism works. I don't think the way capitalism is working at the moment is attractive, appealing or right. so we need to find a new way yeah so if i have a legacy at all i'd like it to be this yeah that karma capitalism is considered a better way of doing business and a better way of organizing society than what we currently have well one of those business books you mentioned talks about big hairy audacious goals and that's a big hairy audacious goal isn't it i guess so and i know you like them because you set them for big give the wonderful charity that you run you've got to get to a billion by 2030 i don't want you to be distracted from that yeah absolutely um you've talked james about um other philcos and other examples of philcos both in in europe and there's some in the uk as well is there one that you can sort of pick out that you sort of have really admired through your research that's doing things a little bit well recently i mean we we had him as a guest phil colligan yeah raspberry pi yeah tell us about that brilliant company that started making computers for the price of a textbook so kids who couldn't normally afford computers could access them.

28:58This was a company that began, was founded by a charity and floated recently on the London Stock Exchange at a valuation of a billion. And the charities now, I think they sold half the shares or a bit more, and charities got a huge amount of equity in the company still. And it's a fabulous business. And so some people think, oh, is this just something a family can do, a private company this is a quoted company you know another one is the western family abf brilliant business they run all sorts of companies um you know there are lots of brands like primark that people are familiar with yeah um they they've um they're predominantly owned by charity and they do huge amounts of good stuff so you know these are these are but in the scheme of things a relatively small number of organizations that have a disproportionate impact yeah i mean really so if more organizations were persuaded to take this route to become karma capitalists the impact would be huge yeah absolutely and so for for people listening they feel the energy they love the idea they've read the book they're in how they haven't read the book yet it hasn't come out let's say let's just see they've got to read the book yeah please read the book i just want people to be aware of the idea really i i so i'd urge people the great thing about this book is it's not very long it's written for business people it's not very long it's got pictures out it's got pull out quotes you can read the book in 10 minutes if you really just wanted to get the key ideas and there's going to be an audio book as well so people who want to listen to it when they commute you know they can do that too that will come out shortly so it's not hard to access I wanted to make it something that people would absorb, think about, and ideally go and do something about.

30:46But I'm keen to, I guess, you've won the argument, right, with a business person. They're keen to do it. Unpack how does a business become a field co? Well, that's the second half of the book. So we've gone from manifesto to sort of guide, I suppose, how to guide. There are a number of different ways of doing it. I suppose the most basic commitment an owner would have to make is to pass 10 % of the shares minimum to charity. It could be a charity they create, or it could be an existing charity, actually, if they didn't mind doing that, if it was something they felt aligned with. But you would create a charity, and that charity would become a shareholder.

31:28And they should get advice from lawyers who know about this, about the best route so that they don't trip up over some unnecessary tax charge. Because there shouldn't be if you do it right. And then when they've got the charity set up, they need to find trustees for that charity. And the charity is obviously independent of the business. So the trustees of the charity are not paid by the business. They have no obligations to the business. Their obligation is to the charity. and the charity would have certain goals and objectives they can decide you know the person who initially sets it up yeah so it might be broader it might be narrow it might be related to what the business does or something entirely different how does that work for reed the reed foundation owns 18 of reed and it has independent family trustees and the reed foundation receives dividends in a good year when the company does well and then it decides the trustees how it's going to allocate the money the reed foundation has decided that it likes to donate money through big give that's for full disclosure the organization that you run alex but the great thing about big give is we get our donations multiplied up through the match funding mechanism that it operates so So if the Reed Foundation puts money in as a champion for the big give, it calculates it gets five times its money through the way that operates.

32:57So if we want to give a million to charity, the obvious way to do it is through big give because it becomes five. So that's our preference. And that's a message we hear a lot, isn't it, from other philanthropists and funders as well. Yeah, I'd like more people to be aware of that though because I think if big give is going to continue to grow and make a bigger impact, I mean, it's already grown quite a lot. We need more big champions. Yeah. And one thing I love about the book, James, is that it's littered with examples of sort of from the cold face stories from charity partners that Reid Foundation has funded.

33:32I guess maybe this is a bit like asking you to pick one of your favourite six children, but is there a sort of charity or cause that really, you know, you feel proud that the Reid Foundation is supporting and making an impact? Well, when my children say, who's your favorite dad i always say you so it's whoever's in the room so it has to be big give alex as you're in the room so that's my favorite charity because it multiplies it up that's genuine and i think it does amazing things i think the great thing about karma capitalism is that it enables all sorts of different organizations a huge diversity of organizations that do all sorts of wonderful work to flourish.

34:14And we've just run a campaign for women and girls. It's very successfully raised over 2 million. And it's interesting looking at the different charities. They do services that I wouldn't have known existed often. And that's really useful and valuable. So I love the diversity it brings. James, this Philco idea, is this for any business? Is there examples of where becoming a Philco wouldn't work? Potentially it's for every business. There are certain probably times in a business life or cycle where it might be not ideal. And it's a problem in America because the law in America doesn't permit Philco structures currently.

34:59It used to, and I think should do, but I'm not in a position to change the law in America. If I was, I would. So there are very few Philco's in America. In fact, the only one I can think of is Patagonia. And that only works because the founder, he gave 100 % of the shares to charity. So it's fully owned by two charitable trusts, which made it work in America. But I think the problem there is having a proportion. So I think, yeah, I mean, if I was starting a new business now, I'd set it up as a Philco. Read as a Philco. I want to increase the charity holding to 20 % from 18. And I would urge people to look at this actively.

35:49Because, you know, I've got a book in front of me. But it's not my business writing books. And, you know, I'm on a podcast. It's not my business doing media. I'm a business person. And I run a company. And that's what I do all day. And I've been doing that for years and years and years. and I've realized over that period of time that this works that this has given us a sort of competitive superpower that um I really value and I suppose I'm getting to the sort of later stages of my career so I don't mind sharing it now I wouldn't want to share it too so but you know I don't mind sharing it now so other companies can do the same because it's so um invigorating being of Philco.

36:34It's so inspiring for people in the organization and outside of it. And I find it really rewarding. So I go to business events and often someone will come up and say, oh, thanks very much. Your charity supported XY. I haven't done anything apart from run the business as best I can, which is my job. And some of the benefit of that is going off to the charity. If the charity wasn't a shareholder and other individuals were, i probably wouldn't hear a dicky bird yeah but as it as it is as it is i get a lot more feedback that is rewarding for me so we were a quoted company years ago and i used to joke you know if the share price went up it was because the shareholder was clever when they bought it and the share price went down it was my fault and it kind of was like that but with this the benefit is ongoing and consistent and one of the one of the sections in the book james is called a burning platform and it's talking about sort of capitalism in crisis is is capitalism broken in your opinion yeah in many ways i think it is i i think that too much power is is congregated in too few companies you know there are now you see huge companies that have a lot of power and too few people are super rich you know wealth is very unevenly distributed it doesn't feel like that's a sustainable situation.

38:02Inequality, when you look at the ratios of CEO pay to the rest of the workforce, it's exploded since the 1960s. It doesn't feel like a sustainable model. It doesn't feel fair. And when you see the levels of poverty that exist in developed economies, that's just not right so the the capitalism seems to have accumulated more and more money to the capital at the expense of labor and land and that it needs to needs an adjustment and this is an adjustment yeah and capitalism has i guess tried to answer that question with esg which you reference in the book tell us your thoughts on that so esg environment social governance has become a big deal over the last 20 years or so um i mean brutally i don't think it changes very much i think it's become a bit of a box ticking exercise you know we know from our own business when we bid for contracts we have to meet certainly esg requirements sometimes you have to pay consultancies or to get on some framework and then after we've been appointed no one at the client company ever asks about it again um yeah i think esg is probably well intentioned but I feel it's had to run its course.