Excellent return on investment during #COVID19 pandemic – Humanity over financial return

Call for Shareholder responsibility in face of Corona virus pandemic

“What if you would leave your dividends to the company and use it to empower your employees?”

Corona virus has been already resulting to closing of companies, salary cuts, unpaid leaves, laying off employees and other undesirable events. During the time when individuals are already vulnerable worldwide. Question to ask is, are these the rights actions? We are living in challenging times, which are bringing the essence of Human Based and Creative leadership to the surface. They are key elements to prevent global recession. What is happening now, is pushing individuals below poverty line, even worse for those who already were there. Where do people go and how will they survive?

“If you have profit to take out dividends, freeze them for 2-3 upcoming years”

Behind each company there are individual shareholders. The bigger the company, the wealthier the people are behind it. Already before corona virus outbreak, there was existing growing gap of inequality between the poor and wealthy. Corona virus is affecting everyone, regardless of wealth. The ones who are going to be most affected are again the poorer people, including middle class. This is an excellent opportunity to close this gap. Rethink how to reach the SDGs, by transforming your business to one, where you are investing in your people and on your clients. Everyone who already has enough, can do this without much of sacrifices.

If you are in position that you took the government offered aid package, pay it back. Don’t let your employees and other citizens to be pushed to severe austerity measures after corona virus outbreak is over.

Profits earned without humanity are profits without true value.

“Don’t cut on salaries or lay off employees”

Companies had the need for these employees before the Corona outbreak. Shareholders and CEOs must have a strong vision, how they are going to operate after the pandemic is over. As the revenues of businesses are slowing and for some stopping all together, many governments are offering help, in form of loans and other support. Some are asking these aid funds to be paid back. In traditional company leadership, the first thought is cutting on costs. In forms of unpaid leaves, laying off people and in many other forms. These actions don’t create employee loyalty towards the company. They don’t result to positive corporate image outside the company either.

 “Governments shouldn’t place further Austerity measures on citizens”

The same way of thinking can be applied to Governments worldwide. It is essential to distribute the wealth equally. Increasing taxes and social security payments, after the pandemic is over, is an extra slap to already vulnerable citizens. There are other ways, better ways.

We have many ways to recover the budget deficiencies, this pandemic has caused in countries budgets. (The worst places to recover them are: increasing, food-, utility-, transport- prices, taxes, social security and other essentials. These costs must go down to offer support to the citizens from middle class downwards.

The golden 8 steps:

1. Tax the dividends of companies who decide to distribute them, with 50-70% until 31 December 2021. (Regardless of current circumstances.)
2. Increasing taxation of companies, with turnover 500 000,00 euro upwards.
3. Dropping VAT from essentials, partially or totally until 1st January 2021 for middle class[1] downwards. How? By providing citizens with VAT reduction card, they can scan or show in the supermarkets and pharmacies.
4. Increasing food production is resulting to price decrease. Including resulting to more jobs available in agricultural sector.
5. EU must increase the subsides to farmers up to 50% of its annual budget (37,2% in 2018).
6. Making Government bonds available to citizens, from middle class downwards, with affordable price.
7. Introducing Tax cuts by 50% from normal rate, for citizens from middle class downwards and SMEs, Micro-enterprises, Solopreneurs, Freelancers[2]. Until 1st January 2021.
8. Decrease Social security payments by 50% from normal rate, for citizens from middle class downwards and SME, Micro-enterprises, Solopreneurs and Freelancers. For contributions 1.3.2020 until 1st January 2021.

 “How this would benefit us all?”

Before Corona virus outbreak, we already had demonstrations worldwide against austerity measures. Understandably. Austerity measures are affecting people from middle class downwards. It is not the best practice to collect income to the government’s budgets from already struggling citizens. To regain citizens confidence to the governments, the taxes and social security payments must go down. Salaries must go up. This will create confidence, unity and peace. As a result, it is strengthening communities.

Citizens who are living in free, democratic and unoppressed society, are happier and more committed to contribute to it.

#Covid19 #WeAreAllInThisTogether #Poverty #Austerity #CorporateResponsibility #Solidarity #UNGlobalCompact #SDGs

Acknowledgements: I would like to express my great appreciation to Hugue Nkoutchou, PhD(Bath), for his valuable and constructive suggestions for this article.

[1] Middle class household income below 70 000,00 euro/year. Including persons living alone with children. Single person household 56 000,00 euro/year.

[2] SME, Micro enterprises, Solopreneurs and Freelancers, turnover under 120 000,00 euro/year