I was in a conversation with an owner-manager yesterday (to help him think through business purpose in light of recent events) and he asked this question: ‘Are the Good Dividends (GDs) relevant in a crisis – like Covid 19?’ It is a question I have been asked a few times.   

Before I answer the question let me start by restating three fundamental principles of the GDs:  

#1 - to maximise all the capitals (assets) and therefore dividends of the business; #2 - that all capitals / dividends are maximised by the connections between them; and #3 - engage in positive social impact in a manner that enhances the capitals / dividends of the business.    

Back to the question, sort of … The consequence of Covid 19 has seen a minority of businesses be unharmed (financially). Andrew who runs a chemicals business in Cheshire has extended his products to make sanitizer. And I have heard of many other similar stories - perhaps most notably the rise in share price of Amazon, along with many other digital tech companies, with the boost Covid 19 has given to on-line businesses, as well as pharma and PPE related businesses.  

However, these are the few and certainly not the consequence of great strategy; arguably more as the luck of circumstance. The majority of industries are suffering enormously. To survive there is the need for cash-flow. A most understandable and necessary response. This does not, however, negate the GD argument. I offer two related thoughts: 

  1. By prioritising cash, are decisions taken that damage the capitals (and subsequent dividends) of the business? Some decisions to generate short-term cash may impact disproportionately on medium term recovery. Impact on customer engagement (reputational capital), employee commitment (human resource capital) and operational capability (operational capital) are typically interlinked. For example, whilst furloughing may have helped to mitigate damage, some people may still have to be made redundant (or have already been made redundant). A leadership approach that places emphasis on quality communications regarding survival through attention to enhancing service to customers and productivity can turn the crisis into a leaderful moment that pulls all employees closely together – surviving for the majority.  I’m sure many of you have offered such leadership. This does not just protect the capitals of the business but indeed can enhance them.  Point (2) provides an example of enhancing value 


  1. The Thursday evening clapping for the NHS and care workers has highlighted a rekindling of the collective value of the planet-community dividend. There has been a comforting collective feeling of being dependent on others, and being depended on to support others. This is of course planet-community capital that enriches society. But it also adds value to a business. There is no conflict in understanding how stakeholders of the business (such as employees, customers and communities) can be supported through Covid 19 whilst at the same time enhancing the business.  Supporting community activities interconnected to employees and customers through crafted communications, can be designed to enhance employee commitment, reputation, customer service and productivity. It does not drain cash but perhaps a little time. If there is capacity in the business this would be time well spent to realise good dividends - especiallthe financial dividend - in the short term and put the business in a good place as we come out of the Covid crisis.   

In essence, thoughtful (responsible) leadership can protect and enhance a firm’s capital in the middle of a crisis. Good dividends is not just for the good times. Good dividends are not in opposition to the short-term priority of cash. But I guess it does take a commitment to seeing the business as composed of a range of interconnected capitals. Only addressing cash might limit survival over the short term if the necessary customer and employee commitment vanishes; whilst on the other side of the coin, by maximising all the dividends, survival may be more assured, and the future much more promising.  

For the minority of firms doing well … now is the time to do good by all stakeholders and realise good dividends, and I’m sure you are. For the majority where survival is key, such survival is a good dividend. The much-needed employment that supports communities has grown significantly in societal value. The role of small business keeping going whilst protecting local communities will become most vivid over the next few months. The dividends will flow. May I wish you all the very best, and stay safe.  

Steve Kempster  

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