Thomas J. Bata Lecture Series on

Responsible Capitalism

CONFERENCE REPORT March 4, 2014, Prague “Service is the very life of business. Economic performance is important – without it we cannot survive – but it is not the sole responsibility of business today. The real role of business is to give a service by making and selling products that satisfy the wants and needs of society, and in doing so to be a caring organization in partnership with community and government.” Thomas J. Bata Thomas J. Bata Lecture Series on Responsible Capitalism in Prague

The Bata Shoe Foundation established the Thomas J. Bata Lecture Series on Responsible Capitalism in honor of the late Thomas J. Bata, who would celebrate his 100 th birthday this year. Known as “Shoemaker to the World,” Mr. Bata built the Bata Shoe Organization into the world’s leading footwear retailer and manufacturer with sales of over 20 billion pairs during his lifetime. Currently the Organization operates on 5 continents and serves 1 million customers each day.

Thomas J. Bata promoted themes such as the Business at York University in Toronto, Canada, benefits of entrepreneurship, regional co-opera - and Tomáš Baťa University in Zlín, the Czech Re - tion, and responsible capitalism throughout his public. Over a ten-year period, each university lifetime and was famous for his outstanding com - will host the Lecture Series in alternate years. mitment to Bata company employees. This Lec - ture Series is inspired by the belief of Mr. Bata The fourth edition of the Thomas J. Bata Lecture and the Bata Family that business is a public trust Series on Responsible Capitalism featured which should contribute to the well-being of the a panel discussion with Peter Brabeck-Letmathe, communities in which it operates. Jan Bubeník, and Pavlína Kalousová. The panel discussion was moderated by Daniel Anýž. Mr. The Lecture Series reflects Thomas J. Bata’s spe - Brabeck-Letmathe also delivered his lecture to cial attachment to Canada and to the Czech Re - the honored guests in the Senate of the Parlia - public, the country of his birth. It is a joint ment of the Czech Republic. collaboration between the Schulich School of

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 3 Hosting Institutions

Tomas Bata University in Zlín foto Zdeněk Němec

Tomas Bata University in Zlín (TBU) is named strives to be one of the most prominent educa - after Tomáš Baťa (1876 –1932), the internation - tional and research institutions in the world. ally acclaimed entrepreneur who founded the Therefore, it has always been bilingual and world-renowned shoe company in Zlín. his son, placed considerable emphasis on teaching eng - Thomas J. Bata, held the post of Chairperson of lish to both its students and staff. TBU is a mem - the University’s Board of governors from the es - ber of the european University Association, tablishment of TBU until his death in September which associates over 850 universities from 47 2008. Currently, Mrs. Sonja Bata represents the countries in europe. TBU signed the Magna Bata family on the Board. The TBU motto is Charta Universitatum of Bologna, which aims to “erudire et creare” – educate and create. Its six support scientific development and freedom. In faculties focus on educating approximately 2012 TBU was awarded the eCTS Label certifi - 11,000 Czech and international students in tech - cate. In 2006 and subsequently in 2009 and in nology, economics, visual arts, philology, peda - 2013, the european Commission awarded TBU gogy, health care, business management, and the Diploma Supplement Label, increasing its marketing. It also has a strong focus on graduate prestige among european institutions of higher research, development and innovation. TBU education.

4 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Schulich School of Business

Known as Canada’s global Business School™, that lead to careers in the private, public, and the Schulich School of Business in Toronto is non-profit sectors, and has over 25,000 alumni ranked among the world’s leading business working in more than 90 countries. The School schools by a number of global surveys. global, in - pioneered Canada’s first International MBA novative, and diverse, Schulich offers business (IMBA) and International BBA (iBBA) degrees, programs year-round at two Toronto sites: its as well as north America’s first ever cross-border state-of-the-art complex on York University’s executive MBA degree, the Kellogg-Schulich ex - main campus and its downtown Miles S. nadal ecutive MBA. In addition to Schulich’s Master of Management Centre located in the heart of the Finance and Master of Accounting degrees, the city’s financial district; and at its new campuses School recently launched one of the world’s first in hyderabad, India and Beijing, China. The Master of Business Analytics degrees. Schulich’s School also operates satellite centers in Beijing executive education Centre provides executive and Shanghai, China; Mumbai, India; Seoul, development programs annually to 12,000 exec - South Korea; Mexico City, Mexico; and Sao utives in Canada and abroad. Paulo, Brazil. Schulich offers undergraduate, graduate, and postgraduate business degrees

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 5 Panel Discussion “People as a Key to Successful Business”

6 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 7 People as a Key to Successful Business

Sonja Bata Chairman, Bata Shoe Foundation

Ladies and gentlemen, it is such a pleasure to be ees in making decisions. he insisted that all em - in Prague. Although my husband lived in ployees continue their education, continually tak - Canada, a part of his heart was always here in the ing improvement courses on company time, and Czech Republic and I am just delighted that this also promoted healthy ways of living. It is there - event is taking place here in this room. Mr. fore particularly appropriate that we are dis - Singer, I would like to express my thanks again cussing the importance of people in today’s panel to you for your generosity that we can use this discussion. The concept of the lecture series is to wonderful venue. commemorate my husband’s dedication to re - sponsible entrepreneurship and service. I was The Bata Shoe Foundation established this lec - married for 63 years, a long time, and my hus - ture series shortly after my husband died. his fa - band often stated that he did not view the busi - ther had been a major influence on his life and he ness as a vehicle for self-enrichment, but rather pursued his father’s ideas. Both my husband and for improving the lives of company employees, his father were talented businessmen and gifted customers, associates, and those who lived in the entrepreneurs. Yet both had a vision of the role communities in which Bata companies operated. that business could play, not only in improving the lives of employees, but more importantly in The same philosophy motivates our whole family acting as an agent for social change. Both con - today; a conviction that business should be a sidered business to be a service to society. public trust and should have values in which peo - Through the business they would put shoes on ple believe in as part of a strong culture. Tradi - people’s feet, create jobs, help employees with tional assumptions about capitalism and its role their careers, and thereby enable them to live a in society are being questioned. In 2008 when we better life with their families. My husband pro - started the first lecture in Toronto, the concept moted entrepreneurship by empowering employ - that business should act in the interest of all

8 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM The Introductions stakeholders, not only shareholders, was rather new. We hold a more long-term paradigm with regards to the impact business decisions have be - yond making profit for shareholders. Young peo - ple in particular demand more and more social responsibility from management in many areas including integrity, transparency, sustainability, and equality.

The number of non-governmental organizations calling for these changes has mushroomed every - where in the world. Trust has become more im - portant than ever before. good leadership is assessed not only by profitability, but also by the long-term impact on society. These are the very important issues for a panel discussion and I am most grateful to our panelists for agreeing to par - ticipate and give us their views.

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 9 People as a Key to Successful Business

Petr Sáha Rector of Tomas Bata University in Zlín

In 2007, Thomas Bata was awarded a special life- conglomerate, Tata Sons Ltd., as the keynote time achievement award Responsible Capitalism speaker. In the second series, here in Prague, in by FIRST, a multi-disciplinary international or - this room, we introduced Professor Yunus, the ganization based in London. Sadly, a year later in nobel Peace Prize Winner and Founder of the 2008, Thomas Bata passed away at the age of 93. grameen Bank of Bangladesh. The third speaker, Shortly after his death, Sonja Bata and the Bata again in Toronto, was Paul Polman, Chief exec - Shoe Foundation established the Thomas J. Bata utive Officer of Unilever, one of the largest con - Lecture Series on Responsible Capitalism to sumer product companies. Today we have the commemorate his dedication to responsible en - pleasure to have with us Peter Brabeck, the trepreneurship. It was inspired by Mr. Bata’s and Chairman of the Board of Directors of nestlé. I the Bata family’s strong belief that business is a hope that you will have an unusual and exhilarat - public trust that should contribute to the well- ing experience. Thank you very much. being of the communities in which it operates. The lecture series is sponsored by the Bata Shoe Foundation and is organized by the Tomas Bata University in Zlín, together with KeYnOTe, and by the Schulich School of Business of York Uni - versity in Toronto. In alternate years, each uni - versity holds the lecture and so the series moves from Canada to the Czech Republic and back. During those four years we have had internation - ally respected personalities. As Sonja mentioned, the first series took place in Toronto with Mr. Ratan Tata, the head of India’s largest business

10 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM The Introductions

Miroslav Singer Governor of the Czech National Bank

The topic of the conference, “Responsible Capi - else and those who witness the hyper dimen - talism,” certainly reflects the receding deep crisis sional matrices of competencies in great interna - in some developed countries. There are many de - tional firms; this leads to our accountability. This veloped countries that the crisis has not hit. One issue also concerns the central banks. As you all such notable example is Canada. Thus in analyz - know the independence of the central banks in ing the crisis in the current economic situation advanced countries has increased dramatically we should focus more on the differences among over the last two or three decades. This strength countries and their systems, rather than attempt - has sprung from the hard-won knowledge that an ing to tackle the system from the most general independent central bank offers a better guaran - standpoint. Still, there is an issue of general na - tee of reasonably smooth economic development ture which requires our attention. The fall of and prized ability to politicians whose short- costs of communication and data processing, sighted interest extends often only as far as the plus the same development in transportation, next elections. Central banks’ accountability goes lead to a more and more deeply interconnected hand in hand with central banks’ independence. world. This strength brings extensive amounts of It is widely accepted that the more accountable, clear benefits to us all, but also has some negative understandable central monetary authority is, the consequences. One of those negative conse - more it is able to influence the expectations of quences stems from the fact that denser and market participants. The changes it needs to more pronounced networks of relationships of all make regarding monetary policy instruments in economic agents, be they firms or individual order to achieve its targets are very small. An ac - managers, unavoidably blur accountability. As countable central bank therefore plays a particu - we are more interconnected with others, it is not lar role in the market system. Currently we only our decision, but always the decision of witness renewed discussion on what this means somebody else, the responsibility of somebody in the world, where central banks play an increas -

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 11 People as a Key to Successful Business ingly significant role in many countries’ eco - nomic systems. This is because such roles often bring more pronounced and more visible redis - tributive effects that affect the welfare of the cur - rent economic agents in different ways. In addition, it is widely accepted that central banks’ responsibilities need to be widened and strength - ened in the area of financial stability, which is a new area for interference of central banks. There - fore we are currently discussing and developing the concept of responsibility highlighted by this conference. This also happens to be my area of interest. Let me wish you an interesting discus - sion and a stimulating conference.

12 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 13 People as a Key to Successful Business

Participants:

Peter Brabeck-Letmathe Chairman of the Board of Directors, nestlé

Jan Bubeník Director and Managing Partner, Bubenik Partners

Pavlína Kalousová Chairperson and Founder, Business for Society

Daniel Anýž Commentator, hospodářské noviny

14 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Keynote Speech

Peter Brabeck-Letmathe Chairman of the Board of Directors, Nestlé

From the very beginning people have made the Keynote Speech difference, starting with our founder, henri nestlé, without whom I would not be standing Thank you very much. governor Singer, thank before you today. henri nestlé was a political you for having us in this wonderful room, Mrs. refugee from germany – yes, even in the middle Sonja Bata for accepting me as a speaker at this of the 19 th century they had political refugees. he important lecture, my fellow panel members to accept me on the panel, and all of you, ladies and gentlemen here in the room, for taking I contend that in the future, your time to listen to a subject, which is very close to my heart. I was asked to talk about peo - investing in people will be even ple as a key to successful business, so I have a very precise subject today. Later on in the after - more critical to our success noon I am going to talk some more about cor - porate social responsibility, but this question than perhaps ever before. about people is a topic that is fundamental to the company I am chairing, nestlé. It has been a long-held view in our company that people was received open-armed by Switzerland, like so make the difference and are at the core of our many other refugees have been. he was a chemist organization. All our business drivers are peo - and he saw a big societal problem, which was in - ple-inspired and we put people at the center of fant mortality – 147 babies out of 1,000 died be - everything we do. I contend that in the future, cause they could not be fed. Out of this societal investing in people will be even more critical to challenge he developed this new technology and our success than perhaps ever before. based on scientific research, created his first product, which was an infant formula. That is

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 15 People as a Key to Successful Business how our company was founded and since our their lives. That is what inspires them; that is founding in 1866, nestlé has grown into the lead - why they come to work. It is not because of their ing fast-moving consumer goods company in the salary, it is because they know what we want to world. More importantly, we have grown into the achieve. We want to work together to enhance leading nutrition, health, and wellness company. the quality of life of consumers all over the world. With global headquarters still in Switzerland, still in Vevey, still in the same small place where Our “Strategic Performance Framework” clearly we were founded, nestlé today has more than outlines the factors which are critical for our suc - 340,000 employees all over the world and about cess. It starts – as it has to – in an environment that we are in, with a capitalistic environment. It has to start also with financial performance and Henri Nestlé saw a big societal for financial performance we have what we call the “nestlé Model.” The model is very, very sim - problem, which was infant ple. every single year we want to achieve what we call organic growth – internally created growth of mortality – 147 babies out of 5 to 6 percent, created by our own people – as well as improvement of profit margins. Thus we 1,000 died because they could do not have to choose between our growth and the profit margin. We want to achieve both – and not be fed. Out of this societal that is the challenge. Yet from a financial point of view it is a very inspiring challenge. however, in - challenge he developed this new herent in this framework is our long-term ap - proach to our employees, our consumers, and the technology and based on communities in which we operate. We view our people, our culture, and our values as an impor - scientific research, created his tant competitive advantage to be nurtured and managed with the same long-term view we have first product, which was an for financial performance.

infant formula. That is how our So how specifically has our commitment and ap - proach to people driven our success over those company was founded. many, almost 150 years? First of all, very impor - tantly, we respect and are open to diverse cultures and traditions. We do not try to make a Swiss out 1.2 million people who are working indirectly for of a Chinese, or a Spaniard out of a Chilean. not us. Our employees now work in factories and of - even a Swiss out of an Austrian. We try to inte - fices in more than 150 countries and we sell over grate all of those cultures rather than impose our - 2000 brands. In order to get our turnover, more selves on them, but we also stay true to the than 1.2 billion products every day have to be fundamental values and principles that we have sold. For almost 150 years, nestlé employees laid out. These values should reflect nestlé man - have been motivated to work together toward agement and leadership principles. We believe one single purpose, and this is to enhance quality that diversity and the cross-pollination of ideas of life with good food and beverages everywhere, and experiences drive competitive advantage. for all consumers of this world, at all stages of This is why expatriation has been a critical part

16 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Keynote Speech of our talent management practices for decades. all over the world, there is a clear recognition We have many examples within the group of that human capital is the engine of the enterprise business results being driven by culturally diverse and human capital as an enterprise-wide driver groups who have been able to bring about better, is the top ranked challenge for a modern CeO, bigger, and faster innovation. and the causes are varied. In the northern hemi - sphere, aging populations and the retirement of Secondly, we are committed to building local tal - baby boomers will result in talent challenges. In ent. We are a global company, yet a company Southern hemisphere countries – perhaps with with a strong local footprint everywhere we oper - the exception of Australia – the talent gap will be ate. As a food company, we know that we must be due to lower skill levels caused by lack of educa - close to the consumers to achieve growth. As tional infrastructure. Looking less than a decade food by definition is local, there is no global con - ahead, there will be an alarming gap in occupa - sumer in the food and beverage business, and tional clusters for high-skill profiles such as taste is influenced by history and tradition. Our managers, professionals, engineers, and techni - highly decentralized approach has allowed us to cians. The question is obvious. What should support independent, strong local businesses, nestlé do and what is it doing to reverse this with greater consumer insight and accelerated trend and to fuel our own competitive advantage execution at the local level and therefore better – and by that also the competitive advantage of business results. We believe that the key to our europe? success and competitive advantage is our local approach to people and the value we place on Allow me to spend the next few minutes dis - local cultures and local decision-making. cussing three areas where we are investing in peo - ple for the future. The first area is building a It is our view, however, that no company, includ - strong leadership pipeline. This has been a prior - ing our own, can afford to rest on its laurels, no ity for the nestlé group for many years. We have matter how successful its track record is to date. made explicit our leadership framework, have put Companies that fail to value human capital will our senior leaders through focused training be outstripped by those companies that do. In - through a long-standing relationship, for example vestment in human capital development will be with the London Business School, the Cambridge the sine qua non for success in the future. Why do Programme for Sustainability and Leadership, I say this? Well, many are predicting that talent and the Institute of Management Development in shortages will be a reality in the not so distant fu - Lausanne. We have put a premium on interna - ture. That is not only in Switzerland, not only in tional career development, as I mentioned earlier. europe; I think it is also the case here, in the In 2012, we strengthened our leadership frame - Czech Republic. work to highlight the importance of leadership at every level – not only on the top level. In the be - Already in 2011, the World economic Forum ginning we only had a leadership program for the was predicting an era of unparalleled talent top 2,400 people. now, we are talking every level, scarcity which, if dismissed now, would slow from individual and teams to executive managers. economic growth worldwide. In their report at We have put a strong focus on mentoring and that time, it was suggested that “ human capital coaching as a means to accelerate professional de - would replace financial capital as the engine of velopment. As a result, more than 95 percent of economic prosperity. ” Additionally, in a recent our top 1,300 positions at nestlé are filled conference board study of over 1000 CeOs from through internal promotion. More than 95 per -

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 17 People as a Key to Successful Business cent! We have a strong internal pipeline of suc - promote gender equality, capacity-building, and cessors for senior roles and therefore primarily education for women and girls. Last year, as a tes - focus our external recruitment on the entry level tament to our commitment, nestlé became a sig - and on the young professional levels . natory of the “Women's empowerment Principles.” Since actions always speak louder For my second example, I turn now to the role of than words, I am pleased to say that in more than women in society, which has been a strategic 20 nestlé markets around the world we are just focus for nestlé for some time now. According to now empowering more than 700,000 women the World Bank, and I quote, “ women perform 66 who either sell our products in their local market - percent of the world’s work, produce 50 percent of place or whom we are supporting in their com - the food, but only manage 10 percent of the income munity through the establishment of educational and own one percent of the property of the world. ” programs and development infrastructure specif - ically for them. I know that our gender balance For its part, the International Monetary Fund states that “ despite some improvements, progress toward leveling the playing field for women has Companies that fail to value stalled over the last couple of years. ” Ladies and gentlemen, this is bad news for everyone, because human capital will be it translates into lower economic growth, amounting to as much as 27 percent of per capita outstripped by those gDP in some countries. companies that do. Investment At nestlé we recognize that gender equality and women’s empowerment are critical to creating in human capital development shared value for our business and for the society we are living in. We believe very strongly that we will be the sine qua non for have a role to play to improve gender balance within our own company and have taken steps to success in the future. create the conditions for this to happen. For ex - ample, the founding of the International Dual Careers network by nestlé in 2011 in the Lake journey is vital if we are to be successful in the fu - geneva area and now in 9 locations around the ture. Women as employees, as primary con - world is a case in point. This was in response to sumers, and as our partners, are key to our changing demographics within our own interna - success today and tomorrow. tionally mobile talent pool. With an increasing number of dual career families, there was a real Finally, I will touch on the important topic of need to help facilitate job searches for the part - youth unemployment. here in europe, the finan - ners of our employees, both men and women, as cial crisis has resulted in economic, social, and in they move into international assignments. some cases political crisis. As a result, unemploy - ment has increased, particularly youth unem - We believe we can also play an important part in ployment, which is still growing in some providing opportunities for women connected to countries, impacting one in four young euro - our business. To this end, we are strengthening peans – approximately 5.6 million young euro - our business-related activities and programs to peans are unemployed at this moment. In

18 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Keynote Speech

December 2013, the eU youth unemployment assistants and business management. We are rate was 23.2 percent, with countries such as looking for talented young people with vocational greece and Spain recently experiencing unprece - skills and training, as well as graduates seeking dented highs – 59.2 percent for greece and 54.3 their first position after university. In addition, percent for Spain. This is a full generation which we know that by working collaboratively with is missing at the work-place. Despite programs business partners, we can have a much larger im - put in place by the european Union and national pact; therefore we are also encouraging our governments, growth is still lagging and the eu - 63,000 suppliers – european suppliers – to do ropean economy is not able to create much- the same thing, to join us, to offer jobs, appren - needed new jobs. ticeships, and traineeships to young people. We plan to launch this new alliance for youth in the At nestlé we fundamentally believe that the pri - coming months with the objective to get as many vate sector has a role to play, seeing that govern - companies as possible to join what we call the ments and public sector will not be able to solve “Alliance for Apprenticeship.” these issues alone. nestlé, for its part, has had a long tradition of recruiting and developing While I have focused my remarks on the youth young people. We also believe sustainable and initiative here in europe, suffice it to say that we socially responsible growth is achievable here in have been developing local market talent around europe, we are optimistic. We believe growth the world for decades through graduate recruit - can be created in europe and we know we can - ment and development programs. Many of our not do so without young people at work. We are senior executives started their careers at nestlé investing and growing in europe and we need in this way. We know through experience that a to attract and retain the best talent if we are to commitment to young people always pays divi - gain competitive advantage in a slowly recover - dends in the long run. ing economy . Ladies and gentlemen, allow me to close the way It is with these objectives and principles in mind I started, with a very simple message. People that we launched “nestlé needs YOUth” in no - make the difference. We believe that we cannot vember with the support of the european Union and we should not rest on our laurels when it and member states. As part of a three-year eu - comes to people; rather, we should continue to rope-wide youth employment initiative, we have take a long-term approach to creating shared committed to offer 20,000 new job opportunities value. Companies that are destined to win in the for young people below 30 years old at nestlé in future must have a very strong sense of purpose; europe. Through the program, we will offer they have to be performance- and people-ori - 10,000 jobs to people under the age of 30. By ented and strongly rooted in values and in prin - 2016, we will create a further 10,000 apprentice - ciples. We must have talent management ships and traineeships in europe and we will con - strategies that are not only aligned to the busi - duct “readiness for work” activities such as CV ness direction but also meaningfully connected clinics, job fairs, and information sessions for at the local market level. Tomorrow’s success re - young people all over the continent. quires an unwavering commitment to people – employees, consumers, partners, and society at The roles we are making available within the large. Thank you very much. company will be across the business and at all lev - els, from operators on the factory floor to sales

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 19 People as a Key to Successful Business

The audience, including Monica Pignal-Bata, James D. Fleck, Jakub Klepal, Sonja Bata, and Petr Sáha

Peter Brabeck-Letmathe

20 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Panel Discussion

Education every single year? Into which of these societies would you put your money? Well, as a matter of Pavlína Kalousová: I decided to bring up chal - fact, I would put my money into the engineers. lenging questions. The first one is: businesses are The reality is that there are 700,000 lawyers is the looking for talent and the natural question would USA, 700,000 sociologists in europe, and be where they would like to find that talent. 50 700,000 engineers in China and India. As you can percent of the graduates in europe are not able see, it is a very fundamental question. Until last to find jobs, whereas 27 percent of employers year I was a member of the european Roundtable have to leave job vacancies open because they are of Industrialists, where we had the 60 most im - not able to find young people equipped with the portant industrial groups. We made the commit - right skills. The second question is – are busi - ment to engage immediately more than 50,000 nesses and employers able to identify where the engineers to fill the gaps that are existent today. quality and talent comes from? Is it coming from universities? I am not sure. The link between a These industries have to go and ask the govern - good diploma from a university and the set of ment to open up the borders in order to let people skills that you will need for your future life has come in. Ten years ago Central europeans had been broken. google, for example, is hiring not great opportunities, because the educational sys - based on diplomas, not based on your grades tem of Central europe and of Russia produced a from universities, but based on your skills, your very good amount of engineers, mathematicians, ability to innovate and solve issues in an innova - etc. That was a strong point of the educational tive way. The final challenging question: the sys - system in the past. I was on the advisory board of tem needs to change, but where will that change President Sarkozy and told him that we proved come from? The schools? We see the educational that if you allowed 50,000 engineers from Central system suffering from internal issues. Politicians europe and eastern europe, to immigrate to are more involved in the quality of internal edu - France, the French gDP would increase by 5 per - cation than thinking about what is happening cent per year. Just 50,000 engineers. outside their organization. We lack a long-term vision of being able to define the skills that busi - Leadership ness will need in 5 or 10 years. Jan Bubeník: True leaders are able to create Peter Brabeck-Letmathe: I think it is true that environments in which every individual is ca - for one reason or the other the biggest number of pable of contributing to the common goal to youth in europe study sociology and philosophy the best of their abilitiy. True leaders can cre - or other societal sciences. If you look at the hard ate environments in which it is very clear who sciences – mathematics, physics, and chemistry is successful and why, while at the same time – interest in them has come down substantially. keeping those people happy, satisfied, and en - Yet, that is the area that we need our youth to gaged. True leaders make sure that each em - study in order to maintain europe as a competi - ployee’s personal values greatly overlap with tive place. I am always asking in a joke – though the values of the corporation. There is an old it is as a matter of fact meant seriously – in which anecdote which illustrates this point: a group society would you have more confidence regard - of Japanese visitors came to nASA and they ing its future: the one that produces 700,000 went to the bathroom and there was an old lawyers, the one that produces 700,000 sociolo - janitor sweeping the floor, and they asked gists, or the one that produces 700,000 engineers him, “What do you do here?” And he said,

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 21 People as a Key to Successful Business

“I help to get the man on the moon, of Diversity course.” If each company would be able to have such identification, the understanding of Jan Bubeník: We can talk about women and how my every-day work contributes to the management quite a lot, maybe during the Q and common goal, we would not be talking about A session, but I just want to say that this is not a the importance of human capital. gender war issue. This is a pure fact. Companies that have at least 30 percent of women in their A few years ago gallup made a huge survey of management – and that is a proven fact – are 50 about 2 million people regarding the level of percent more financially successful. At the same engagement. Surprisingly enough, about 80 time, their employees are much happier and percent of the workforce is either passively, or more satisfied with the working environment. I even worse, actively disengaged; they basically think this is not causality, there is a very strong sabotage what the company is trying to do. If correlation, but in my experience, it is diversity we over-exaggerate a little, the world economy of talent and diversity of beliefs which lead to is chugging along on about 20 percent of its new solutions and to innovations. capacity. Another important topic concerns the older gen - eration – and I do not mention this only because in five years I will be 50, but because it is a valid demographic problem. The western world is fac - True leaders are able to create ing a demographic crisis and unless we can inte - grate the healthy, experienced and talented environments in which every people above 50, we in europe are not going to be competitive. The talent pools of women and individual is capable of older people need to be cultivated and appreci - ated. Those companies that understand this will contributing to the common have a huge head start in being able to lure the talent of the future. goal to the best of their abilitiy. Flexible labor markets True leaders can create Peter Brabeck-Letmathe: There are two as - environments in which it is very pects to this; the first one is that by creating the european common market and assuring the clear who is successful and freedom of movement of capital, goods, and peo - ple, enormous progress has been achieved. now, why, while at the same time there was a price to that – we did not talk too much about the price. By giving freedom to 28 keeping those people happy, nationalities to move freely within europe, we have closed up and we have created a certain wall satisfied, and engaged. against the rest of the world, so that is one as - pect. But I think over all it is still highly positive. Just think about it, 28 nationalities have the free - dom to move, to study, to work, etc. It is a very

22 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Panel Discussion important step forward. As a matter of fact, I would say that if many european countries had the same democratic freedom that Switzerland has – direct voting on any subject – the outcome would be that a big part of europe would be even stronger as a result of this unrestricted freedom of personal movement. Part of the political envi - ronment is clearly taking advantage of the social tension that has been created. I think in the next european elections we are going to see a clear shift towards the part which is against the free - dom of movement of the population, even be - tween America and europe, and I think we should be very careful not to lose this privilege that europe has negotiated for itself over the last couple of years. The ones who will suffer because of that, first and foremost, are the young people. In Switzerland, the first ones to be touched were the erasmus program and people in research. Suddenly the Swiss, who could go out and who could spend one semester in Spain or one semes - ter in germany, cannot do so. The first ones who are suffering from this xenophobia are always the young people. So I think we should be very careful and really defend as much as we can the principle of freedom of movement of the three things: capital, goods, and people. You cannot cut off just one part of it and say, Yes, we want to have freedom of capital and goods, but we do not want to have freedom of people. It does not work. That is a very political discussion that europe needs to have.

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 23 People as a Key to Successful Business

Pavlína Kalousová

Jan Bubeník Peter Brabeck-Letmathe

24 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Panel Discussion

Professor Petr Sáha asks the panel a question

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 25 Lecture “Creating Shared Value: a Pragmatic Way to Responsible Capitalism”

26 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 27 Creating Shared Value: a Pragmatic Way to Responsible Capitalism

Vice-Chairman of the Senate Alena Gajdůšková gives her introductory remarks

Alena Gajdůšková: Dear Mrs. Bata, Mr. Brabeck, ladies and gentlemen, they say that once means not at all and twice is a habit, so I Thomas Bata Junior succeeded welcome you here, on the soil of the Senate of the Parliament of the Czech Republic, to this second in putting the Bata Company lecture in the series on Responsible Capitalism. It is a very rare occasion to have Mrs. Sonja Bata back on its feet after World War here, who is the special mother of this lecture se - ries. The aim of this series is to cultivate the II, turning it into a global Czech business environment in the spirit of Thomas J. Bata. The conference this year is a corporation. He said that the symbolic opening of the celebrations of the 100 th birthday of Thomas J. Bata, the date of which is measure of success is not a pile of in September, and I am very proud that here in the Senate of the Parliament of the Czech Repub - gold, but wealth is in education, lic, we can contribute to these celebrations. Thomas Bata Junior succeeded in putting the in moral principles, in freedom, Bata Company back on its feet after World War II, turning it into a global corporation. he said and in an open mind. that the measure of success is not a pile of gold, but wealth is in education, in moral principles, in freedom, and in an open mind. I had the oppor - world are an example of business acuity. Their tunity to visit the Kenya Bata Company in success is supported by the high commitment of nairobi and I could see that the companies in the employees who are united in their strive for prof -

28 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM The Introductions itability, but also by sensitivity and engagement in the region where the factory, and thus the com - pany, is. These are the characteristics of respon - sible capitalism. Today the company’s strategy has proven to be a positive one with regards to modern management. As Deloitte & Touche has pointed out, technologies today are accessible from any part of the world. It is possible to ac - quire financing, although it might not seem so at the first glance, but what is most important are the people – creative, loyal, highly motivated peo - ple, who share the values and ambitions of soci - ety. In the Bata Company, this was understood as a matter of course. It is a company of sharing; the employees are seen as partners, co-entrepre - neurs. This is how it was in Zlín as well.

This, however, is a theme that will be discussed by more qualified people than myself, so once again, thank you Mrs. Bata, thank you all for coming here this evening and I wish you all to get inspiration from this evening. I wish you success in your work, and in your business activities, and happiness in your lives. enjoy the evening.

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 29 Creating Shared Value: a Pragmatic Way to Responsible Capitalism

Mrs. Bata gives her introductory remarks

Prof. Sáha gives his introductory remarks

30 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Lecture

Peter Brabeck-Letmathe delivers the 2014 Thomas J. Bata Lecture on Responsible Capitalism

Lecture is a public trust that should contribute to the well- being of the communities in which it operates. As First of all, thank you for this very kind introduc - I studied the history of your company, I learned tion. Dear Sonja, thank you for inviting me to de - that Bata built housing, schools, and hospitals liver this year’s lecture on responsible capitalism around its factories for its workers and their fam - in this wonderful city of Prague, and Alena ilies, demonstrating Thomas J. Bata’s firmly held gajdůšková, thank you very much for allowing us belief that business should serve the public. And to use this wonderful, historical room here at the it was the same belief that underpins nestlé’s cor - Senate of the Czech Republic. porate business strategy: we believe that for a company to be successful over the long term and Ladies and gentlemen, if you allow me, I would to create value for shareholders, it must also cre - like to begin by sharing a few reflections on ate value for the society it serves. And we call this nestlé and Bata. When I think of the beginnings “Creating Shared Value” – value for sharehold - and history of Bata and nestlé, I cannot help but ers, and value for the society. draw parallels between the two companies. Both companies were founded in the 19 th century by – nestlé, with its headquarters in Vevey, Switzer - I think we have the right to say – visionaries, who land, was founded in 1866 by henri nestlé, a aspired not to make money, as was mentioned by man who was not only a political refugee, but a Sonja, but to make a positive impact on society, man who put nutrition at the heart of our com - but by doing so they created big global enter - pany since its very beginning. Today, with the prises. world’s largest private nutrition and food re - search capabilities that there is, nestlé has be - This lecture series is inspired – as we have heard come the leading nutrition, health, and wellness – by the Bata family’s strong belief that business company in the world. In a moment, I will explain

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 31 Creating Shared Value: a Pragmatic Way to Responsible Capitalism how this focus on nutrition is a fundamental part societal issues. Thus, the top management, in of our pragmatic approach to what we call re - this new role, must go beyond the historical sponsible capitalism and how it is a fundamental boundaries of a traditional business leader’s role approach to what we call “Creating Shared and join political and societal leaders in drawing Value.” much-needed attention to these critical societal challenges, such as water scarcity, poverty, or the double burden of malnutrition including both under-nutrition and over-nutrition, to name just Responsible companies must a few which are relevant at least to my company.

identify societal issues that are So business leaders must take a step beyond giv - ing back – I will come back to this idea about “we material to our business – to have to give back to society” – I do not think that is enough. I do not think it is enough to have a your business. commitment to philanthropy which, by the way, I believe should be done with the personal money and not with money of the shareholders. I do not What does responsible capitalism mean? What believe that corporate philanthropy of a public does it require? I am sure you have your defini - company is the right thing to do. Philanthropy tions. Let me share mine. First, at least to me, re - per se is certainly positive and necessary and can sponsible capitalism is the product of responsible help address societal challenges, but it is rarely companies, but also of committed leaders. Let me sustainable and its direction changes with every share what I believe are some of the characteris - leadership change or with every economic crisis. tics of these companies and leaders, drawing on “Creating Shared Value” is by its nature sustain - our own experience creating shared value. The able since it is intimately linked to the success of role of responsible companies is not only to man - the core of your business. And finally, top man - age and grow the business profitably over the agement must challenge the status quo, particu - long term, but also to provide attractive returns larly the short-termism of financial markets and to its shareholders. They do so by listening care - the insufficient inclusion of material environ - fully and respecting the communities, in which mental, social, or governance issues in invest - they act, and deeply understanding and address - ment analysis models and reports. For ing their societal needs. Responsible companies responsible capitalism to really take root we also must identify societal issues that are material to need the engagement of the investor community our business – to your business. They are societal and that is not so easy to achieve. issues, but they are material to your business that report back transparently on progress in address - now, how can this “Creating Shared Value” ing those societal goals. To make this possible, come about? Allow me to take a step back and de - the role of business leaders is to make stakehold - scribe the history of how we created this idea ers engage in a systematic process, engaging ac - about “Creating Shared Value” at nestlé. It is tively with ngOs, not being afraid of having quite clear that as a consumer goods company, close relationship with those who sometimes are we must closely follow and deeply understand the our biggest critics. With governmental and aca - issues that in daily life affect our consumers and demic stakeholders getting involved, we are able the communities in which the consumers live. to develop this keen understanding of relevant nestlé’s history of working to address societal

32 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Lecture needs stems back to our roots. When our founder rate Social Responsibility.” The 2,500 people that henri nestlé developed and launched his “Farine were in Davos had only one thing to say: we have Lactée,” which was the first infant formula, at to give back to society. There was Sharon Stone that time a combination of cow’s milk, flour and standing up and committing the people for 2 mil - sugar saved the life of his neighbor’s baby. At that lion in order to defend society. Angelina Jolie was point in time, 147 babies died in Switzerland out also there and everybody was trying to give back of 1000 being born. These numbers were worse to society. So on the fifth day, after I had listened than what they are in the world’s most underde - to all my colleagues, I stood up and said, “ Excuse veloped countries today. It was this societal issue me, but I want to tell you something. After having that encouraged him to create the company into listened to you now for five days I will still say I have nothing to give back to society because I have not been stealing anything from society. I have created To make this possible, the role of value for society through the way I feel we have been running our business. ” And this is what we call business leaders is to make “Creating Shared Value.”

stakeholders engage in You can imagine there was some silence in the room. Some people booed, some others looked a systematic process, engaging more surprised and astonished. But this meeting forced me afterwards to really think more about actively with NGOs, not being this concept of the role of corporate social re - sponsibility as it was presented there, as this ob - afraid of having close ligation – “ you have been doing something wrong, and therefore you have to give back. ” I approached relationship with those who Michael Porter and Mark Kramer, professors from the harvard Business School and the har - sometimes are our biggest critics. vard Kennedy School respectively, and I asked them to go independently to Latin America, where nestlé had been working for many years, so as to analyze whether we were able, in those the one which we have been developing. This is 80 years of work in Latin America, to create value why nutrition has been a cornerstone of nestlé for the society by doing business. After they re - ever since. And with all the protests we had, and turned, we reported their learning in our first the boycotts we had, people never understood “Creating Shared Value” report, which was called that nestlé would never give up its commitment “The nestlé Concept of Corporate Social Re - to infant nutrition. We would be giving up the sponsibility as Implemented in Latin America.” roots of our company. Thus together with the two professors, we refined this concept and officially launched “Creating Of course at that time henri did not call this Shared Value” as our approach to business at our “Creating Shared Value.” he just created it. The first Creating Shared Value Forum at the Un development of the concept dates back to the headquarters in new York in 2009. It was a very 2005 World economic Forum in Davos, and I important moment because we had to make one know that some of you were present there. The decision: if we kept it as a concept exclusively for main topic of the meeting in Davos was “Corpo - nestlé it would have died as a marketing gag, as

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 33 Creating Shared Value: a Pragmatic Way to Responsible Capitalism

Peter Brabeck-Letmathe The Knights Hall in the Senate of the Parliament of the Czech Republic

Jan Bubeník Prof. Sáha and Mrs. Bata

34 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Lecture something that was a public relation trial. That chronic hunger, while at the same time another was the reason why we really asked Michael 1.5 billion people who are heavily obese, con - Porter and Mark Kramer to assume the spiritual sume too much. not surprisingly, both are mal - leadership of “Creating Shared Value,” and they nourished with large parts of the population have propagated this system and this approach deficient in micronutrients. We are trying to help to corporate social responsibility all over the tackle this issue by addressing the needs of both world. Today, there are more than forty countries the overweight and obese population as well as which recognize “Creating Shared Value” as the the under-nourished ones. We feel that the world- concept for corporate social responsibility for leading nutritional and wellness company has an public companies. important role to play in offering the right kind of products and helping consumers make the now, what is the business case at nestlé? As I right nutritional choices. To achieve this, we use said before, the terminology is new but the busi - science-based solutions to improve quality of life ness model is old and has been practiced by our through products, information, and services. We predecessors at Bata as well as nestlé. It was re - also promote nutrition education, such as better ally born out of our own history and experience hydration along with the benefits of physical ac - of working, in our case, with farmers in the rural tivity, thus contributing to the health and well- communities. We are using resources more effi - being of consumers. We have made a public ciently across our value chain, and developing commitment that we will sell – and I say sell, for products and services to meet the real needs of we are not distributing, we are selling – and we the poorest of the poor with products that are are selling 200 billion servings of micronutrient tastier, healthier, and include information to help fortified products to consumers by 2016. They consumers make informed choices. As you can have an impact. They are scalable. see, this is a little bit more than just being a good corporate citizen. Our “Creating Shared Value” The second area is water. The world is facing a model calls upon a company to identify specifi - water crisis just now. This crisis, which is linked cally those focus areas where shared value can be to the growing global population, and increasing really optimized. These areas are different from prosperity, is a result of the big demographic company to company. In the case of our com - shifts from rural areas to “megacities” as well as pany, it was in the areas of nutrition, water, and the impacts of climate change. If we do not solve rural development. Societal issues represent an this water crisis, food security and energy secu - opportunity, not just a threat: an opportunity to rity are both at stake. With two-thirds of all fresh develop new products and services, an opportu - water used in agriculture and the demand for nity for innovation, an opportunity to reduce water set to rise by 50 percent by 2030, water costs while improving the environmental foot - scarcity is a clear scenario for a third of the print, and an opportunity to reduce risks and in - world’s population. crease sustainability in the supply chain. So business leaders have to take a 360-degree view According to the United nations, 783 million of the world around them and in so doing unleash people still lack access to clean water. That is the opportunities and reduce risks. latest figure. But the Third World Centre for Water Management estimates that at least three now, allow me to elaborate on each of the three billion people worldwide still drink water of du - focus areas, and let me begin with nutrition. bious quality, and 2.6 billion people have no ac - Close to 900 million people still live today in cess to improved sanitation. So while we

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 35 Creating Shared Value: a Pragmatic Way to Responsible Capitalism recognize very clearly the human right to water, idea – the new Chinese government has set the which corresponds exactly to 1.5 percent of the urbanization of 120 million farmers in the next clean water that we have, we also believe that we five years as one of its biggest priorities. Can you have to radically change the way we are using imagine the amount of people who are moving water – the 98.5 percent of the rest of the water from the land to cities? It is an enormous effort, which is not considered to be a human right. never seen before. So it is vitally important that Being the world’s largest food and beverage com - with all this urbanization and environmental ero - pany, we of course depend on reliable access to sion we have enough arable land in rural areas to clean water and recognize that the long-term suc - feed this growing urban population which is re - cess of the company is built upon effective water liant on food being brought to them and being stewardship. Therefore, we are not only address - grown by others. It has been estimated that 525 ing the water challenge within our operations and million farms exist worldwide and they are pro - extending it to our food supply chain, but also viding a livelihood for about 40 percent of the working with others to share best practices, test global population. Small farms occupy about 60 new approaches, and find effective solutions. percent of the arable land and – now comes the incredible figure – 75 percent of all poor people To give you an idea: internally in seven years we of the world are living in rural areas. The ones have been able to bring down the usage of 4.5 who are hungry are the farmers in the rural area, liters of water to produce one dollar of turnover not the privileged citizens in the cities. down to 1.5 liters of water to produce one dollar of turnover. I think we have proven that we have This issue is important to us as we rely on more to act more efficiently and more responsibly in than five million farmers to produce agricultural the usage of water; it can be done and it has been raw materials for our high-quality foods and bev - done. The solutions exist. Through leadership erages. Five million farmers gain their work just and engagement with the Water Resources by supplying us with raw materials, and this is group and the public-private partnership that I why we are working so hard to ensure that we created, nestlé is contributing to the water policy source raw materials in a responsible and sus - debate by discussing water challenges and pro - tainable way. every single day we have direct con - posing solutions via high profile and influential tact with more than 690,000 farmers. We are also public forums. Through my personal “Water actively engaged in initiatives to address rural Challenge” blog which I invite you to visit and poverty and develop farming skills which are participate in – because it is very important for needed to make farming a more attractive occu - me to get feedback from everybody in this world pation than what it is today. We also work at the – I hope to stimulate discussion on important community level, which is an integral part of our water challenges around the world. Therefore, I manufacturing and sourcing activities. Over half invite you to read the blog and share your com - of our factories and employees in the developing ments and views to help us build and develop a world are located in rural areas, as well as of constructive conversation around this huge chal - course, the farmers and suppliers from whom we lenge. source our raw ingredients. So through our in - vestments in factories and their surrounding in - Let me come to the last point, which is the rural frastructure, we not only provide technical development. half of the world’s population now assistance and knowledge transfer, but we also lives in urban locations and this proportion is set support economic development and improve the to reach two-thirds by 2050. Just to give you an social conditions of the local communities, par -

36 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Lecture ticularly in developing countries. Our coffee to tackle until now. however, since we published plants and cocoa plants have as a primary activity this report, the whole organization – the 330,000 the establishment of rural schools so that the people that work at nestlé – has embraced it as children of those poor farmers have perhaps something that is part of their DnA. And already other options in the future. today, we can see that such a level of trans - parency pays dividends not only in terms of rep - Let me now come to the environmental sustain - utation with the stakeholders, but also with the ability and compliance issues that are also a part socially responsible investor community, which of “Creating Shared Value.” In addition to nutri - is growing. They are still a minority, but they are tion, water, and rural development, it is impor - growing alongside the indexes that guide them. tant to note that we see the concept directly linked with environmental and social sustainabil - While much work remains to be done in the area ity. none of this is possible without a very strong of measurement and metrics – and we work again set of values and principles. We have written with universities, this time in the UK, to establish down our Corporate Business Principles, which the linkage between societal and business impact are the foundation of our corporate culture and – there is increasing proof that “Creating Shared describe our commitments to our stakeholders. Value” pays off and serves as a productive invest - For us, upholding compliance goes far beyond ment. keeping checklists. It requires steadfast princi - ples that apply across the whole company and The recently published Un global Compact-Ac - across the whole world. It means respect for peo - centure CeO Study on Sustainability, the ple. We talked in the afternoon about the impor - world’s largest CeO study with input from more tance of people – our own employees, our than 1,000 CeOs across 103 countries, corre - suppliers, the people in the communities where lates transformational leadership with higher re - we operate, and our consumers. turns over time. The study has clearly identified that a small group of “transformational leaders” In conclusion, let me summarize why “Creating are successfully managing to combine externally Shared Value” is such a great pragmatic business recognized sustainability leadership with signifi - approach. I hope you all agree that “Creating cant market outperformance. You can get both Shared Value” is based on business principles. of those things. Last year you had Paul Polman Today, all business leaders have the opportunity as a speaker, who is a very good example of such to guide their companies in the creation of shared leaders. Unilever has achieved both things very value. We have learned through our experience well. The RobecoSAM Dow Jones Sustainability that measurement and public transparent report - Index, which analyses the economic, environ - ing helps to build implementation momentum, mental, and social performance of the top 20 external accountability, and transparency, percent of companies, shows that these best-in- around which all those aspects of engagement in class companies all deliver higher financial re - society are based. We have started to publish a turns. The top list of the Dow Jones “Creating Shared Value” report every single year, Sustainability shows those who are the best fi - in which we share our societal commitments, nancial performers. In studies conducted by the measure our progress, and discuss the challenges Reputation Institute, there appears to be a we are facing. We are not saying that we do every - strong correlation between economic strength thing perfectly, we are saying that there are a lot and a sound reputation. of challenges out there that we have not been able

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 37 Creating Shared Value: a Pragmatic Way to Responsible Capitalism

38 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM Lecture

Ladies and gentlemen, I believe that “Creating Shared Value” represents responsible capitalism in action. It is directly linked to the core business and creates a direct relationship between busi - ness and society, which requires a long-term per - spective for the company to deliver; and finally, it creates new and innovative areas of growth and profitability, as well as reduces risks, improves your reputation, and simultaneously provides sustainable, scalable solutions to big global soci - etal challenges.

At nestlé we hope as well to encourage more companies and business leaders to embrace this model of responsible capitalism to help grow their businesses while simultaneously addressing societal needs. Thank you for the opportunity to explain to you what we mean by “Creating Shared Value” and I am looking forward to the questions.

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 39 Peter Brabeck-Letmathe Sonja Bata, O.C. Chairman of the Board of Directors, Nestlé Chairman, Bata Shoe Foundation

Mr. Peter Brabeck-Letmathe led the nestlé Mrs. Sonja Bata was born in Switzerland and group from 1997 to 2008, first as CeO until studied architecture at the Swiss Federal Institute 2005, and then as Chairman and CeO. In April of Technology. After her marriage to Thomas J. 2008, he handed over the office of CeO and re - Bata in 1946, she became involved in the opera - mained Chairman of the Board of nestlé S.A. tions of the Bata Shoe Organization and is a Mr. Brabeck-Letmathe serves as Vice-Chairman member of the Board of Directors. She is Chair - of both L'Oréal and Credit Suisse group. he is man of the Bata Shoe Foundation. In addition, Chairman of the “2030 Water Resources Mrs. Bata has served on a number of business group,” a Public-Private Partnership housed in boards, including Alcan Aluminium, Canada the IFC/World Bank, Washington. Mr. Brabeck- Trust, and the Canadian Commercial Corpora - Letmathe is also the Chairman of the Board of tion. She has also been active in many non-profit nestlé health Science S.A. and of Delta Topco organizations in the educational, health, and en - Limited (Formula 1). In addition, he is a member vironmental fields, and is the founding Chairman of the exxon Mobil Corporation Board. Born in of the Bata Shoe Museum and the Batawa Devel - 1944 in Austria, Peter Brabeck-Letmathe gradu - opment Corporation. Mrs. Bata has received ated from the University of World Trade in Vi - many national and international awards. In 1983, enna with a degree in economics. he has received she was appointed Officer of the Order of several awards, including the Schumpeter Prize Canada, and holds honorary doctorates from sev - for Outstanding Contribution in Disruptive In - eral universities. novation, the Austrian Cross of honour for serv - ices to the Republic of Austria and “La Orden Mexicana del Aguila Azteca.” The University of Alberta (Canada) conferred an honorary Degree of Doctor of Laws on him, and he serves as the Chairman of its external Advisory Board.

40 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM The Speakers

Prof. Petr Sáha, CSc. Alena Gajdůšková Rector, Tomas Bata University in Zlín First Vice-President of the Senate of the Parliament of the Czech Republic

Professor Petr Sáha is the Rector and one of the Dr. Alena gajdůšková was born in Prague and founders of Tomas Bata University in Zlín, Czech currently lives in the Zlín Region, in Želechovice. Republic (TBU). As a significant scientist of ex - She graduated from the Faculty of education in ceptional personality, he devoted his entire life to Ostrava and completed her postgraduate studies gathering and transmitting knowledge in the at the Faculty of economics in Prague, majoring field of science and education. he was President in Public Administration and Regional Develop - of the Polymer Processing Society from 2007 to ment. Since 1986, she has been engaged in local 2009 and chairman of the Czech Rectors’ Con - government. She became Secretary of the Senate ference. his lifelong achievements are connected Club of the Czech Socialist Party for the first time with endeavors to enhance quality of life in the in 2002. Mrs. gajdůšková held the position of Zlín Region of the Czech Republic by expanding Deputy Chairman of the european Union Issues, education possibilities. he also supervises many and was Chairman of the Parliamentary Club of doctoral programs. the Czech Socialist Party. her areas of special in - terest were political issues of the european Union and the european Integration Process, public sector services, and human rights. Since 2008 she has been working as the vice-Chairman of the Senate of the Czech Republic. Also since 2008, she has been employed as First Vice-President and Patient Ombudsman for the Union of Pa - tients. In 2013, Mrs. gajdůšková was elected as the Deputy Minister of the Czech Socialist Party. In 2012, she was awarded the title “Lady Pro.”

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 41 Miroslav Singer Daniel Anýž Governor, Czech National Bank Commentator, Hospodářské noviny

Mr. Miroslav Singer was appointed member of Mr. Daniel Anýž is foreign affairs commentator the CnB Bank Board and Vice-governor in Feb - for the Czech daily paper hospodářské noviny. ruary 2005. The President appointed him CnB his main interests are in Czech foreign policy, governor for a term of six years effective from 1 nATO, the eU, transatlantic relations, and US July 2010. Previously, he worked as a researcher policy. he graduated from Columbia University’s and lecturer, and later as Deputy Director for Re - journalism program at the Prague Center for In - search, at the economics Institute of the Acad - dependent Journalism in 1992. he took part in emy of Sciences of the Czech Republic and the the Mass Communication Training Program of Center for economic Research and graduate ed - Voice of America at the University of georgia in ucation at Charles University. he was Chief 1994. he participated in the hubert h. economist at expandia Finance from 1995, humphrey Fellowship Program, part of the Ful - Managing Director of expandia Investment bright exchange Program, at the University of Company from 1998 to 1999, and Managing Di - Maryland in the 2001/2002 academic year. he rector of expandia holding from 2000 to 2001. was a US correspondent based in Washington In 2001, Miroslav Singer joined Pricewater - D.C. for hospodářské noviny from 2005 to 2010. houseCoopers Czech Republic as Director of Services to Businesses groups.

42 ThOMAS J. B ATA LeCTURe SeRIeS On ReSPOnSIBLe CAPITALISM The Speakers

Jan Bubeník Pavlína Kalousová Founder and Managing Partner, Bubenik Chairperson, Business for Society Partners

Mr. Jan Bubeník founded personal advising com - Mrs. Pavlína Kalousová is a sustainability ambas - pany Bubenik Partners and has led it for more sador. She founded and currently serves as a than 10 years. he has been engaged in profes - Chairperson at Business for Society, Czech Re - sional services focused on financial services, public, a leading association for CSR and sus - modern technologies and the industrial sector for tainable business that mobilizes and activates more than 15 years. he is a member of The businesses and other key institutions for social Young Presidents Organization (YPO) and often issues, responsible business and sustainable per - lectures on topics related to the recruitment of formance. She is also active in systemic changes employees and human leadership in Central and in civil society sector – since 2006 she has served eastern europe. he is a founding member and as Deputy Chair on the governmental Council Chairman of the Corporate Council of the Forum for Civil Society and as Chair on the Committee 2000 Foundation. for Legal and Fiscal Affairs at the governmental ngO Council. During her professional life she has worked with over 60 corporations on their CSR and sustainable strategies and projects. In the past she managed the Czech Donors Forum, a national association for grantmakers and phi - lanthropy where she focused on many legal changes and the development of new donation instruments.

COnFeRenCe RePORT | M ARCh 4, 2014, P RAgUe 43 “Bata has always maintained that a business must have values in which people believe as part of a strong culture understood by all. Bata’s shared culture, shared values, and shared beliefs have been the foundation of its approach to its customers, its employees, and the communities in which it operates.” Thomas J. Bata náměstí T. g. Masaryka 5555 760 01 Zlín Czech Republic

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