The cavalry has arrived … or has it?
CEOs are stepping into our world of humanity - some warily, some with conviction. It’s a growing trend thanks to you - employees, consumers and impact investors who are using your voices and your budgets to mold the future of business. Personally, I’m letting out a huge breath of relief.
It’s become pretty obvious to us all that our legislative process is so fractured that the very issues that concern our collective survival as a species, not the free for all grab for revenues or star status, need addressing – and need leaders on the outside of that fray that will step up.
Its not that CEOs haven’t used their voice as influencers in the past but, until the last few years, they were honestly afraid of being sued if they advocated much of anything outside of their core business that might impact their bottom line. They were charged with growing it - taking a position on social issues that might cause a financial hit to it was risky business.
Thanks to B Lab’s guidance and leadership you have pushed for b corp certification, the good housekeeping seal of approval for companies that are willing to go through a rigorous assessment to show the world they mean business in this new movement of stakeholder value. They want to show their commitment to all parties in their circle of influence including employees, customers, investors, vendors, the community and the planet. They understand that profit cannot be their sole motivation or their sole reason to exist.
In support of these market trends, 34 state governments and D.C. have given business another option for corporate entities with the addition of B status to their menu that previously included C, S and nonprofit. Although some of these laws are fairly toothless and don’t come close to the rigors of the certification process, they give breathing room to companies allowing them to step up to the plate as corporate citizens - without fear of reprisal.
This new type of for-profit entity is expressly allowed to take into consideration its impact to its broad array of stakeholders, including employees, the community and the planet. It reduces the threat of shareholder lawsuits by those advocating that the only job of the company is to increase their bank accounts to the expense of all others.
But what’s a company to do if it isn’t prepared to walk either B route? Larger companies, many public, are experiencing the demands of a transparent world thanks to the internet, online shopping and of course, our Next Gens who are showing up to work ready for change and active participation.
A few weeks ago, the Business Roundtable, America’s most influential group of corporate leaders, moved radically away from the idea that the duties of a company were primarily to its shareholders. It issued a statement signed by almost 200 CEOS that companies’ responsibilities extended even further to a whole realm of stakeholders - employees, vendors, communities and shareholders.
This was on the heels of Blackrock’s (the largest asset manager in the world) letter to CEOs, attempting to clear up any confusion that profit and purpose are inextricably linked. CEO, Larry Fink, advocated the long-term approach to business and reiterated that “purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders.”
So, move over Tommy the tree hugger, the cavalry has arrived … or has it?
This is all great “in theory.” But I ask you as a leader and a CEO, are a vast majority of these CEOs talking or implementing these decisions? Do we understand the impact of their actions and can we emulate it and recreate it in our smaller companies?
Showing purpose starts at the top and values are deeply embedded in this idea of creating greater good as global corporate citizens. Before we call the kettle black, reflect on your own business. Does your team and all of the employees have any idea what your values are, what you stand for? Are your values in line with those of your company? Quite frankly, being a CEO activist is only as good as your personal and company actions - not the carefully crafted talk you or your company puts out to the market.
Are you willing to stand up for diversity and then make sure that your employee mix is deeply varied? Are you willing to take a product off your shelves if it is negatively affecting your radius of influence, even if it impacts your bottom line? Do you listen to customer needs rather than telling them what you think they need, implement programs and make the tough decisions? Are you willing to lead by doing the right thing?
If not, invite Tommy back to the table – at least he was walking his talk.
Copyright © 2019
Linda Lattimore – all rights reserved