Activist CEOs: Why the common good makes common sense

Bosses should think in terms of human value, not shareholder value.

by Robert Phillips
Last Updated: 06 Feb 2017

It was good to see the CEOs of organisations including Amazon, Facebook, Starbucks, IKEA and Google taking on the bullying aggression of Donald Trump in the courts and media. Given the hideous executive order banning travellers from predominantly Muslim countries, it was the right thing to do. But such activism from senior business leaders is long overdue. It is a shame that it took the Trump election to serve as the catalyst. CEO voices have been silent for too long. Immigration bans are not the only misdemeanours they need to challenge – from climate change to slave labour.

I have long-argued for activist business leadership, urging CEOs to go beyond Unilever’s Paul Polman’s assertion that global corporations should think and behave like global NGOs. CEOs need to think and behave like social activists themselves. The only way to effect real change is to challenge the status quo. Progress cannot be achieved while defending business as usual. This is now more important than ever before: basic human rights are under threat everywhere, and business has far too long turned a blind eye, seeing those who fight for their rights as the enemy. They're not.

Polman’s analogy is in any case imprecise. Some NGOs (especially the large ones) increasingly behave like behemoth corporates, driven by their funding departments and afraid of upsetting the corporations or government departments that feed them. But Polman’s intent is good – understanding that large corporations can be a force for good. They have the scale and reach of entire nation-states (the turnover of Wal-Mart, for instance, is greater than the GDP of South Africa); are truly globalised and therefore have no appetite to embrace economic nationalism; and – if effectively organised - enjoy an agility and connectivity with their workforces that can be every bit as democratic as a nation state. The CEOs of global multi-nationals should therefore behave like responsible, progressive statesmen and women. It is essential that business leaders have a definite point-of-view. I would like to think this is what my Jericho colleagues and I are driving at with our work on the global Responsible Tax Project for KPMG.

Enlightened, activist CEOs will naturally behave partly out of economic self-interest –protecting their License to Operate in volatile times and/ or defending the very practical need to support freedom of movement across highly mobile workforces. But business activism must go beyond this and create a License to Lead. Activist CEOs can support the common good in business and society. While there are legal and regulatory obligations placed on every organisation, these cannot be used as excuses to hide, just as the usual Davos platitudes are not good enough either. The real bottom line is that there is a moral and ethical dimension to business. But understanding this is only part of the journey. Actively prosecuting it remains the missing piece. Supporting the common good is the right thing to do. Put simply, common good is common sense.

The primacy of shareholder value, noted the legendary Jack Welch, is 'the world’s dumbest idea'. Decades of false orthodoxy around the 'social responsibility of business is to maximise profit' are finally being reversed. But is it too late?

Many global multinationals have spent the past decade in denial – not least in the run-up to and aftermath of the 2008 financial crisis. The message of Occupy – as I wrote at the time – should have served as the wake-up call. "We are the 99%" fired a warning shot of anger and disaffection that was soon to multiply inside and beyond corporations and manifest in the likes of Brexit and Trump. Activist business leadership then – or Public Leadership with a commitment to Public Value, would have enabled CEOs to escape from their boardroom bunkers and PR-led echo chambers; listen to dissenting voices inside and outside their organisations; undo the hierarchies that supported them and took them to power; establish new networks among co-workers and wider stakeholders that support the many, not the few; show humanity and vulnerability; and create new models of shared or common value, that place people and planet alongside profit.

Just as the marchers in London or Washington would recognise common good as their lodestar, so this can be the rallying point for the new generation of activist CEOs. Profit is no longer the clever mantra, just as common good is no longer a political term. Tolerance, justice, wisdom and courage can help guide leaders and the organisations they serve. Activist CEOs will think in terms of human value, not shareholder value, and shape their organisations accordingly. Activist CEOs will abandon the competitive measurement metrics that have for too long led to poor decision making and usher in a new spirit of collaboration, giving greater voice and participation across all levels of the organisation. In a world increasingly gripped by discord, division and fear, CEOs have a responsibility to step up and lead. If they don’t, it will get much worse than this. Howard Schultz, Mark Zuckerberg and their fellow travellers have shown America a way forward. Their activism may yet save them – and us.

Robert Phillips is the author of Trust Me, PR is Dead and the co-founder of Jericho Chambers, advising CEOs of major organisations on how to think and behave like social activists.

Image source: UUSC4all/Flickr

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