Archive for the ‘Sustainability’ category

The Week in Ethics: Corporate Citizenship in a Trump Administration

January 26, 2017

trump_white-house-photo-2017-featureCircumstances have caused an increasing number of companies and CEOs to speak out in recent years on hot-button social issues that previously weren’t part of traditional corporate citizenship. For example, nearly 400 companies filed an amicus brief on marriage equity with the Supreme Court, and employers and organizations banded together using economic leverage to fight legislation discriminating on the basis of sexual-orientation in IndianaNorth Carolina and Georgia. CEOs also weighed in against policies that exacerbated racial tension, like flying the Confederate flag and excessive use of force by local police.

This experience will serve corporate leaders well in navigating the challenges ahead. Issues of gender, race, sexual-orientation, pay equity, gun control and climate change are among the many hot-button social issues not going away – and likely to become more divisive — under the administration  of U.S. President Donald J. Trump. Corporate citizenship may be entering its greatest test.

Will a Trump presidency have the effect of muting CEO voices for fear of reprisals and Twitter attacks in a government now controlled by one political party? Or will corporate citizenship, acting out of a bigger sense of purpose, gain increased public trust and support?

The new landscape offers unknowns, perils and opportunity even as the administration’s agenda isn’t finalized. As president, Trump wields enormous power and a low tolerance for criticism which makes dissent tactically sensitive. Companies have a full plate keeping up with economic policies impacting their business. However, the hot-button social and environmental issues will create defining moments for leadership and corporate citizenship.

Three of my observations from recent corporate citizenship challenges: 1) how a company defines its purpose fosters momentum; 2) using economic leverage isn’t corporate bullying; and 3) it’s critical to speak up collectively for what’s right.

How a company defines its purpose fosters momentum

When company leaders see the purpose of business as delivering value to society and the environment in tandem with delivering financial results, things change. They create stakeholders, shifting into a more authentic and aware relationship with employees, customers and all those impacted by the business. It makes “community” personal and shapes values and behaviors around what enables the community to flourish or be harmed. If everyone has a stake in its success as stakeholders then what everyone does matters more. If a law or action discriminates against anyone in the community, for example, it is a catalyst in seeking out like-minded leaders to join in addressing the problem.

Using economic leverage isn’t corporate bullying

Under pressure from many business leaders, Indiana, former Governor Michael Pence, now Vice President Pence, backed down on provisions in the Religious Freedom Restoration Act that invited sexual-orientation discrimination. If the provisions weren’t dropped, Salesforce.com CEO Marc Benioff was the first to threaten economic sanctions  (like reducing investment in the state and offering employees a relocation option). Economic leverage, used in other states to address discriminatory legislation was called “corporate bullying”  by critics. As discrimination is illegal, how is it bullying for companies not to want their employees put at risk?

It’s critical to speak up collectively for what’s right 

Corporate Citizenship is an individual and collective act. It involves working continuously to reinforce ethical behavior in one’s own company and working collectively with other CEOs and like-minded organizations to address social and environmental concerns important to you and your stakeholders. There is strength in numbers, especially in uncertain and volatile times. Commenting  on corporate social activismBank of America’s  Chairman and CEO Brian Moynihan  said, “Our jobs as CEOs now include driving what we think is right. It’s not exactly political activism, but it is action on issues beyond business.”

Climate change is just one example of the persistence needed for progress. Climate action to create a low-carbon economy and support the Paris Climate Agreement faces a challenge getting President Trump’s commitment as he has called global warming a hoax. The most recent Gallup Poll on the subject, found 64 percent of Americans surveyed expressed some to great concern over global warming.

It is unclear how, if at all, dissenting popular opinion will impact the Trump presidency and social and environmental issues. He lost the election’s popular vote by an unprecedented 2.9 million ballots. The day after the Inauguration over 600 peaceful marches  – 400 in the U.S. cities and more than 200 around the world –  put the president on notice regarding grassroots support for human rights issues. The president’s popularity (and how it impacts members of Congress) will be a bellwether of his ability to get his agenda through. Likewise, a company’s continued strong financial performance creates latitude to address controversial social issues.

Those companies whose business purpose is more than just profit are likely to avoid ethical problems longer if federal regulations and enforcement are relaxed. According to the 2017 Edelman Trust Barometer, 75 percent of respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” While 53 percent believe the current overall system has failed them, many continue to have faith in business as an institution. “Among those who are uncertain about whether the system is working for them,” the survey found, “it is business (58 percent) that they trust the most.”

Whether or not progress can be made on hot-button social issues in a Trump administration, acting out of a bigger sense of purpose and drawing strength from collective voices will likely gain increased public trust and support of corporate citizenship.

Photo via Whitehouse.gov.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics.

Reprinted with permission: This column was originally published January 23, 2017 entitled “Corporate Citizenship in an Age of Uncertainty” in Business Ethics Magazine.

Gael O’Brien, January 26, 2017, The Week in Ethics

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The Week in Ethics: Why Purpose Matters to Leaders

January 24, 2014

Leaders who unite their teams around a purpose beyond creating profit redefine what is possible. They show a road map for how collectively each person can have a positive impact on customers, an industry, community, and society. The lens these leaders hold up allows individuals to see how they can make a difference, a key element in employee engagement.

We don’t hear a lot about companies that are focused on a bigger purpose because they are far less likely to derail and become headlines in scandals or crises. They are grounded by company values which creates a common language and sense of “we,” which is a ballast in the constant change of our unpredictable world. Unilever and its Sustainable Living Plan is an illustration of purpose in action that is part of a business strategy. It sets out a plan that expects the company to double in size while also decreasing its environmental footprint and increasing the company’s positive social impact.

Business can no longer afford to be a bystander,” according to Unilever’s CEO Paul Polman, “content to sit on the sidelines doing the minimum necessary to acquire its ‘license to operate.'” Polman is also one of the founding leaders of the B Team, a global initiative calling for a new kind of leadership — more inclusive and driven by a moral compass. The B Team seeks to redefine obligations to stakeholders — replacing maximizing profit with a focus on people, planet and profit.

The “business as usual” short-term profit lens has spewed out all kinds of red flags morphing into the recent financial meltdown among other problems. Last fall, a Washington Post column “How the cult of shareholder value wrecked American business” addressed the “self-reinforcing cycle in which corporate horizons have become shorter and shorter” with reduced CEO tenures and patience for the long-term, as well as the decreased average time stocks are held (now less than six months).

The irony, columnist Steven Pearlstein wrote, is that the focus on maximizing shareholder value hasn’t actually done that much for shareholders.  “My guess,” he said, “is that it will be a new generation of employees that finally frees the American corporation from the ­shareholder-value straightjacket. Young people — particularly those with skills that are in high demand — today are drawn to work that not only pays well but also has meaning and social value.”

The push for purpose has many advocates in addition to Gen Y employees. The impact social entrepreneurs are having on creating positive social change as well as global giants like Unilever demonstrate that innovation, financial gain and societal benefit can fuel each other. Research also supports that purpose is as great a motivator as profit as Daniel Pink pointed out in Drive.

Purpose matters.

Inspired leaders know, says Simon Sinek, that “people don’t buy what you do, they buy why you do it.”

The Week in Ethics

Gael O’Brien, January 23, 2014

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine; her December 2013 column is “Why Do Good People Do Bad Things? The Role of Spiritual Intelligence.”

The Week in Ethics: Why UCI is Wrong and Armstrong Can’t be “Forgotten”

October 22, 2012

What International Cycling Union (UCI) president Pat McQuaid said at a news conference October 22,2012 revealed more about UCI’s culture than it said about Armstrong: ”Lance Armstrong has no place in cycling and he deserves to be forgotten in cycling. This is a landmark day for cycling.”

Granted UCI (cycling governing body) has an embarrassment factor it would like to forget: it indicated that Armstrong had beaten the anti-doping system for drug testing — including the  218 times it says it tested Armstrong without a positive reading. UCI will not appeal the sanctions (and findings of the report) issued by the United States Anti-Doping Agency against  Armstrong. He will be stripped of his seven Tour de France wins and banned from the sport for life.

Ban a man, wipe out an embarrassing  chapter in cycling history?

That delusional approach might stand a better chance if  doping in cycling hadn’t been allowed to exist for generations, embedded in the culture, before Armstrong appeared on the scene. His contribution took beating the system to a whole new level.

Remembering Armstrong, others who’ve been caught and winners who escaped detection, is the best way for UCI to begin its understanding of its own role, and that of anti-doping agencies and others, in creating the culture they should commit to changing.

Whether it is Wall Street or cyclists pedaling on the streets of France, the obsession to win, to rationalize actions in order to compete on a so-called “level playing field” creates a short-term win that destroys long-term sustainability.

Organizations get the culture they foster.  Fighting fire with fire generally means in the long run everyone gets burned.

Gael O’Brien      October 22, 2012

The Week in Ethics

Gael O’Brien is also a columnist for Business Ethics Magazine. Her September  2012 column is about CEO Compensation and retiring the rock star myth

The Week in Ethics: Sustainable Excellence

November 29, 2010

For a long time when the term “sustainability” was mentioned in connection with business, the examples most often cited were Ben & Jerry’s, The Body Shop, Patagonia and Stonyfield Farm. Their founders’ formula combined a successful business strategy with an agenda of doing good in the world.

Gary Hirshberg said recently that he started Stonyfield Farm, the world’s largest organic yogurt producer, nearly 30 years ago with the question “Is it possible to create an enterprise where everybody wins?” His company’s compound annual growth rate of over 24% in the last 18 years and the ongoing achievements in the company’s “healthy food, healthy people, healthy planet” mission suggest he’s on the right track.

Now it is a rare company that doesn’t talk about its commitment to sustainability on its website. Customers and investors want to know what a company stands for.

While it isn’t easy to tell the hype from real impact in companies’ sustainability reports, there are a lot of companies whose commitment to sustainability has been tested and who have integrated or are integrating sustainability into their core business strategy.

“Sustainable excellence” is a term used by Aron Cramer and Zachary Karabell to describe companies that operate profitably, are committed to superior business practices, and “integrate consideration of society and the environment into their DNA.”

Their new book Sustainable Excellence: The Future of Business in a Fast-Changing World draws on Aron’s 15 years with Business for Social Responsibility, the last six as CEO, and Zachary’s experience as an economist and money manager with a focus on sustainability as a driver of profitability.

Sustainable excellence is what the authors believe will drive lasting success and ultimately, redefine what excellence means.

The book is a rich collection of stories about successes and mistakes companies have made in dealing with the impact of their products on the environment and society, in human rights areas, and in relationships with NGOs and others.

The examples affecting Ford, Nike, BP, Levi Strauss, Walmart, General Electric, Nestle, PepsiCo, Coca-Cola, Shell, Starbucks, Google, Clorox and others offer specifics about best practices and ineffective solutions as companies seek to make real their declared commitments to sustainable practices.

Ultimately the book is about leadership. Is the leadership needed to achieve sustainable excellence different from general business leadership?

Cramer and Karabell say yes. More listening is required: listening especially to diverse voices. “By listening to unfamiliar voices, business leaders can see the future first—and steer their companies in the right direction.”

Whether by involving NGOs or others in strategy discussions to understand their concerns and making adjustments, or using outside advisor groups, or creating partnerships to address collaboratively problems, sustainable excellence doesn’t happen in a vacuum.

Cramer and Karabell urge business leaders to consider the following in their business strategy:

  • Think big: create business strategies that meet big global challenges
  • Use sustainability to drive innovation
  • Set the right incentives internally and externally
  • Embrace the transparent world – and collaborate
  • Make consumers your partners

Whether or not “sustainable excellence” catches on as a term or movement, Cramer and Karabell have raised the bar on what sustainability can mean in companies, and what the aggregate benefit can mean to the world.

Gael O’Brien, November 29, 2010

The Week in Ethics

Gael O’Brien is also a columnist for Business Ethics Magazine.