19 August 2016
People tend to forget, but words have a history.
‘Society’ combines the Latin socius (an ally or companion) with ‘-ties’. It’s about how we as individuals bind ourselves to one another to form communities.
But the way we govern and understand ‘socie-ties’, states, public and private institutions hasn’t escaped our modern obsession with interpreting the world around us through calculation.
From financial figures and electoral polls to reality show audience votes, we’ve come to think we can simplify anything with supposedly objective data.
We believe incentives, metrics and other forms of numerical data can help us make sense of complexity. But we no longer ask questions like: Why did that happen? What can’t we know? What are the risks? What could go wrong?
The search for certainty makes us falsely believe maximising shareholder value will help us pursue the common good, but we forget ‘common good’ isn’t an absolute. It’s constantly evolving between political, social, moral and environmental concerns that should be debated, not measured.
But the greatest casualty of our praise for numbers is rationality. We’ve forgotten its true meaning.
It might be common knowledge the term originated from the Latin ratio. But what’s perhaps less understood is that it not only meant ‘reason’ but also ‘account’ and ‘proportion’.
Because for an account to be rational, it must also seek a proportionate relationship between members of a community and reconcile opposites.
By the 16th Century, the Jesuits had already developed a simple system to achieve this. Their colleges’ cash boxes had two keys – one held by the procurator (the equivalent of today’s CFO) the other held by the rector (in today’s terms, the CEO).
Only by talking to each other and mediating competing interests could they open the cash box and appropriate funds as agreed. Numbers were just a practical means of interrogating non-financial issues and encouraging negotiation.
So, why the micro-lecture on the etymology of accounting in this post on entrepreneurial citizenship?
The very word ‘entrepreneur’ reminds us a good business person is always between (entre) not only different ventures but also ‘in between’ competing concerns. Concerns that today can range from geopolitical issues to pressing matters of inequality.
Not only do entrepreneurs have to be citizens of a community. They must also ‘speak’ the language of economics, politics and society to act as cultural mediators between their business and the outside world.
For centuries, accounting has been the tool entrepreneurs have looked to, to help them operate in this middle ground.
It is also in today’s entrepreneurial explosion where I see the greatest opportunity to rediscover the lost meaning of society and rationalism.
Entrepreneurial citizens will have to be more socially aware than before. They must embrace a new form of governance which goes beyond the numbers to properly understand the impact of business impacts, and how it can benefit us all.
But first we must accept that while rational choices may be impossible to make, reasonable judgements remain within our reach. Which is only achievable once we appreciate the ties that bind societies together.
Developing the right intellectual and ethical framework to allow this change in attitude is important, and it’s essential we also give entrepreneurs the tools to navigate it.
We just have to remember the meaning behind our words.
A version of this post originally featured on the Global Peter Drucker Forum Blog.
Professor Paolo Quattrone is Dean of Special Projects, College of Humanities and Social Sciences, Chair in Accounting Governance and Social Innovation at University of Edinburgh Business School and Co-Director of the Centre for Accounting and Society.