Pull up a Chair with Bina Mehta: S2, Ep 5 - Vindi Banga, Chair, Marie Curie UK

Well, first of all, Bina, thank you very much for inviting me. It's a pleasure to be with you. I think the key word there is sustainable. I grew up in Unilever and we believed in long-term growth, very long-term growth, and that's all about winning with consumers, winning with customers, making sure you are attracting the very best talent everywhere in the world, partnering with your suppliers, giving back to your communities and being entrenched there. More recently, it's actually been about making sure you don't deplete the environment. Unilever came to this last point—they had all the first points I think probably since it was founded over 100 years ago—but was early to the thought of the environment as well. I can remember way back in the '90s when we were mandating all our factories in water-scarce areas to do water harvesting and make sure they didn't deplete the water tables, or indeed manage their waste so that they didn't damage the environment. About 20 years ago we led a study amongst the FMCG industry at the World Economic Forum in Davos to try and identify the impact on the environment from the industry, and surprise, surprise, we found that only 2 to 3% of the impact happened within the company. The rest happened either in the supply chain or actually at the front-end logistics when the consumer used FMCG products. The major lesson from that was you've got to work with everybody to solve these issues. But coming back to your question on sustainable growth, that's what it is—very long-term growth. And Unilever's here today, 100 years after it was founded, 190-plus countries, 100 billion market cap. That's what sustainable growth is.

Generalizations are always difficult and perhaps trite, but if I was to attempt one in response to you, I would say yes. I think Asia does think longer term in general. They have a long way to develop and perhaps that's one reason, compared with the manner in which certainly in the developed and Anglo-Saxon world everything works to the quarterly result rhythm. I think also Asian companies tend to be largely family-owned or family-founded, they're still in that phase, and I think that's an important reason because they usually take that long-term perspective. You see that even in the manner in which Asian businesses think about their employees—employees are just naturally family. You see so many examples where they cater to them through illness, through other issues, because there's no other state support, but also they look upon them as their extended community. They provide housing, they develop communities. So I think the short answer is yes. I would put in one caveat—I know there's a lot of criticism, perhaps to some extent justified, that as business in Asia has developed it has perhaps thought less about the environment. But that's natural—these countries have to get millions of people above the poverty line, they're still at that phase in many places, and therefore that's been a natural phase. In the last decade I think that has manifested itself in a high level of pollution in many parts of Asia. I think that's been a big wake-up call along with the general climate change noise, and I see change happening there. Asian businesses are far more focused on the environment today than they ever were. As evidence of this, I see even some of our sovereign wealth investors in CDR, for example, whose wealth has been accumulated through the carbon industry—they are today one of the biggest and most focused on thinking about issues on the environment. A lot of change happening.

Well, if I go back to the first conversation we had about Unilever, I think it is about thinking about all stakeholders. That's how businesses win—they win by thinking about all the stakeholders, and that very much includes their communities and therefore the planet. That's an important part of it. You talked about government, and it's quite interesting. I recall, for example, when I was chairman of Unilever in India—one of the principles I always kept at the back of my mind is: what's good for India will be good for Unilever in India. And so we were very willing participants and supporters of the development agenda in India. I see this across most of Asia, where business works hand in hand with the government to support the development agenda. I also see it frankly in a lot of European countries. But I would say that the Anglo-Saxon world—somehow business and development and government perhaps could do more together to solve some of the big challenges that are being faced today.

Well, let's take health. Health is a big challenge everywhere in the world. In the developed world it's such a big challenge because of aging—people are living longer, there are diseases of plenty. In the rest of the world it's the opposite—there's malnutrition at the same time as diseases of plenty coming in quickly. The UK, we know that health is a big issue, and I think business can play a role. I've been fortunate to be part of several businesses that are engaged in health. At GSK, for example, drug discovery is a very big focus, vaccine discovery is a big focus, and the recent vaccine for instance for shingles is so relevant to the UK because of the average age of our population. Shingles is a debilitating disease. Now, making sure that those new innovations are available early in the UK is an ongoing challenge. If you take Haleon, Haleon is all about prevention and self-care in terms of health—there again I think it's a very big role that can be played. But I think it would be wise to add in the role of the voluntary sector here. I have the privilege of working with Marie Curie now for a few years, and it's interesting—at Marie Curie we are able to take care of about 10 to 12% of the people who pass in their families every year, and this need is only going to grow in the UK because of the aging population. Only 25% of our funding comes from NHS contracts, the rest actually comes from the public. So I think as far as health in the UK is concerned, everybody can play a role—business for sure, individuals, all of us.

Well, this is a very difficult topic and it's not easy for leaders. How does one approach it? I think it's important for a company to identify what its purpose is—and I don't mean a lofty purpose of evangelism or something. It's got to be clear what it's there to do, what its role in society is. Once you have that, you can form a plan to play that role and to win in that role—it's important to win in that role, in being the best at providing that role. And that's the job of the leadership and the company. That then translates into typically a three to five-year plan with several initiatives. But the long term is a series of short terms, and therefore it's inevitable that you break that down into short-term milestones to measure how you're doing against that. I think that's where it becomes difficult, because if you get thrown off the course, you miss something—things happen, external events happen, internal misses happen. It's really important then to judge and have the courage of conviction to stay the course or change course. That judgment is very important at that point in time, and that's the role of the leadership. There are times when you just have to stay the course and accept that it'll take you a bit longer because external events or your own challenges have come in the way. And there are other times where you might need to change course, in which case you shouldn't be afraid of changing course. It's very important to carry all the stakeholders with you, and typically in a public business that's your investors. Creating enough knowledge about your purpose, about your plan, about your milestones, and being transparent with them, open with them, I think is really crucial.

I think for sure. It's certainly easier to make those calls in the private capital markets, and the reason is the shareholders in the room. Typically in the private capital markets you have one or a handful of shareholders and they really understand the business deeply with granularity, and they're in the room. So you can make those decisions of long versus short-term trade-offs much more easily. In the public markets the shareholders are not in the room, and it's the job of the board to actually understand what the shareholders want and to communicate back to management and the board what the existing reality is. I think the other complexity in public markets is that different shareholders have different objectives—some are more interested in short-term return, others are more interested in long-term return. So that adds to the challenge.

It goes back to what we were discussing earlier about sustainable growth. Private capital typically takes on a business for a duration of five to six years, and our job is to improve that business in that period and to do it better than hopefully the prior owners. Improvement means better growth, better margins, profitability, but also a better level of core sustainability, a better ESG footprint. So from our point of view at CDR, when we invest in businesses we think very carefully about what are the longer-term sustainability issues—which could be about the environment, it could be about social sustainability—that'll be much longer than our time horizon of ownership. But we take those into account and we commit to improving those during the period of our ownership.

UK Government Investments is a really interesting body. It is under the Treasury, created by the Treasury some years ago. We've got three principal functions. The first of these is to provide governance on behalf of the owners, which is the government, of about 24 or 25 arms-length bodies. What that means is that we provide in most cases a director on the board of those companies and provide the necessary governance support to the department in which that arms-length body sits. That's one function. A second function is that we act as the corporate finance advisor—just as in businesses we would turn to Lazard or Rothschild or KPMG for that matter when we have interesting questions to think about or deal with, the government turns to UKGI and we are able to help answer those questions or provide scenarios. A third area which we've taken on more recently is to understand the liabilities of the state, and therefore we've taken that on now for about a couple of years. Those are the three functions that we provide today, and they by definition are longer-term perspectives. Mostly longer-term perspectives—in some cases though there could be short-term crises which the government is dealing with which we're called into support. For instance, UKGI was part of the COVID Vaccine Taskforce and other such initiatives.

I think there are several topics here. I think the first thing is having the right people on the board, and of course that means the right mix of skills and experience. But it goes beyond that—I think it's really important for a board to have people who are curious, who are keen to learn about the business, about the industry, and also people who have low ego, because our job is not to run the company—our job is to support the management in running the company. So the first point is having the right mix of people on the board. The second is the appropriate level of engagement. There are lots of boards where people of course read the papers and come to board meetings, but I think boards are far more effective when in between board meetings they spend the time to really understand the business, to meet the customers, to meet the front-end people, and truly internalize some of the issues of the company. So engagement is a second. I think the third is to be able to provide the right balance between the avoidance of risk and the maximization of opportunity. Too many boards spend more time on avoiding risk, and actually that balance is hugely important because maximization of opportunity is sometimes where the management needs the greatest support and greatest encouragement. And that's all about how the board spends its time—the agenda, the amount of time they spend on different issues. But last but definitely not least is the culture of the board. That's hugely important. Does the board have a culture where actually the real issues come to it, the truth comes to the board? Almost any company you think of today is going through some form of transformation, and the very point of a transformation is that things aren't right, they have to change. So you've got to know exactly what it is, what is the state of play, and it's only then that you can truly engage with the management and be able to provide the constructive balance of both support but challenge, and bring your experience to bear on both sides of that.

This is a really important question, and I think it goes beyond the workforce. If you look at the last 10 or 20 years, effectively the divide between the haves and have-nots has grown everywhere in the world virtually, whether in the developed world or the developing world. And I think it's incumbent on businesses to do everything they can to reduce that divide, to increase diversity, to be more inclusive in totality. What can businesses do? Well, at one level of course businesses can make sure that they are hiring more diverse talent. I think the gender issue is of course well recognized, but it goes beyond that—it goes to people from different stratas of society, from different backgrounds of education. There's a whole stream about how you bring in people and how you retain them. At Unilever, if I go back, our goal was always to make sure that we were bringing into our management people who reflected the society we sold our products to, and that broad brush was what we strove for. But businesses must go beyond that—that's about the people they hire, and I think they must see what they can do with their resources into the broader ecosystem. If I go back to my experience with Unilever in India, one of the initiatives we had was Project Shakti. About 60% of India's villages were media-dark and often could not receive our products, which were all about household hygiene, personal hygiene. So we came up with this thought, actually inspired by the self-help groups from BRAC in Bangladesh, of empowering women in rural India in these villages by helping them get trained to become distributors for our products in those villages. It was quite amazing and energizing to watch how in a couple of days you could help transform a person who's illiterate and doesn't know arithmetic or mathematics into a businesswoman who was able to carry the message of our products and also distribute them in the villages. In a few years' time we were able to empower perhaps 90,000 women, and this idea then went wide into the Unilever world. Why is this important? Of course she earned an income, but what was actually the really big benefit is that her role at home changed, her role in society changed—she was suddenly much more respected. So this is a force of inclusion and social change that business can play in its ecosystem and society. And last but definitely not least, each one of us can play a role, either by giving our time to social endeavors. Marie Curie is a wonderful endeavor that KPMG is supporting right through your employee stream, or even individually.

I think pick whatever area comes close to you and give your time to that. I think we have through the benefit of our education and experience got a lot to give back to organizations like this. But I think we'll be more effective if we pick a space that touches us personally. And that's one reason why I was very privileged to become the chair of Marie Curie. I think palliative care is a very big problem—we've all had aged parents go through the final years of their lives, and watching that happen is something that motivates you to help others. So pick a space that you connect with and give your time.

Look, the background is simply this: we feel as a family that we've been lucky beyond belief to have got to where we have and to have accumulated the resources we have. We definitely don't need these resources during our lifetime or indeed for the next generation. So the question is what can we do with it and how can we help others? We've set up this family foundation, which my wife chairs. It's got two purposes at this point in time. The first is to support cancer research, and that's very personal to us because my wife has suffered cancer a couple of times. It's incredible—although so much has been accomplished in that field, there's so much more to be done. That's one focus area. And then the second focus area is education, and in particular we are looking right now at trying to find ways and means of supporting the thrust towards STEM. We both identify that to be a need gap in this country, and the real question is how we approach it. I'd welcome any ideas actually for that.

Gosh, probably lots, because I don't think I mastered a lot. But I'm not sure that I would change fundamentally what I studied or what I did or how my life turned out. One can always make different choices, but I feel very privileged to have had the opportunities that I have had and had today, so I wouldn't change any of that. What I would change perhaps is some of my own characteristics and how I approached life. Maybe in my early years, I would encourage myself today if I could do it again to move a bit faster. I think perhaps I was always looking for being 100% right, and therefore maybe took a bit longer. It took me some time to realize that you'll never be 100% right—life is not an exam, and you're only going to be 75 or 80% right. It took me some time to learn that and to trust one's instinct and judgment. The other aspect was in the earlier years of my work career, I would try and find the answer out myself by doing lots of learning and deploying my curiosity. And actually I realized later it was a lot simpler to ask others. When you're young you want to achieve everything by the next year or the next two years, and what you don't realize when you're 25 is you're going to work for the next 50 years—you have a long time ahead of you. So take your time. Those are some of my lessons I suppose that I would try and pass back to myself.

Well, I get energy from everything I do—all the things that I'm involved in. I really enjoy my time at CDR. I think it gives me the opportunity to look at business, to look at business across different sectors, to look at interesting questions on how we can add value, how can we do this better than anybody else. That's the essence of investing in private equity—how can we create value that others can't see. And that's a wonderful challenge. The joy there is that you contribute and you continue to learn, so it gives me a lot of energy. Marie Curie gives me a lot of energy—in some ways it's hugely satisfying. When COVID hit, for example, our fund collection dropped by almost 30 to 40%, and at the same time the need for our services went up. There was a big question as to what we do and how we manage through this period. But we did—the board, the management, we got together and we actually plowed through that period. We came through it having taken care of more people than previous years, and actually somehow came out of it with a healthy balance sheet as well. So I get a lot of energy from all of the things I do. But also from my family—I think in particular my granddaughter gives me a lot of energy. She has more energy than many people. The other day she told me, for instance, that she had an opinion. I said, well, what do you mean, you're only five, how can you have an opinion? And she said, everybody has an opinion. So there you are.

I've enjoyed it very much. Thank you, Bina.