The writer is co-author of ‘Net Positive’ and former chief executive of Unilever
The expectations of business leaders have changed dramatically. When I was a young executive, the CEO was expected to produce increased profits, happy shareholders and more jobs. Today, staff and customers believe you need to embody company values and speak out on big, fundamental issues, from the race to fake news and climate change.
As Larry Fink, CEO of asset manager BlackRock, said in his annual letter last week: “We focus on sustainability not because we are environmentalists, but because we are capitalists and trustees for our clients.”
In tough times, a more morally conscious business elite must surely be a good thing. We are living in a historic moment of multiple and converging global challenges and our governments and multilateral institutions are paralyzed.
However, not everyone agrees. Traditionalists have long argued that focusing on sustainability too often comes at the expense of running a good business, as we heard during a debate around my former company Unilever last week. Increasingly, the criticism also comes from the political realm, where parts of the establishment now shout “woke capitalism” whenever “activist CEOs” open their mouths.
In the United States, the accusation of wokeism is gaining traction among some members of the Republican Party, in response to bipartisan coalitions of Fortune 500 CEOs helping to block anti-gay and anti-LGBT legislation, campaigning to keep states United in the Paris climate accord and now companies from Amazon to General Motors publicly opposing attempts by state lawmakers to restrict voters’ rights.
Senate Republican Leader Mitch McConnell couldn’t have been clearer: “My warning to corporate America is to stay out of politics.” He quickly clarified, “I’m not talking about political contributions.” It seems statements are bad, but cash is good.
It’s a crude tactic: putting CEOs back in their box when you don’t like what they have to say. And it is dangerous. Many business leaders still find this difficult territory. The fact that more are moved by the times to get out of the sidelines is to be welcomed. Politicizing this change is undemocratic and will stifle economic growth.
For a healthy democracy, it is far better for our business leaders to openly display their stalls than to quietly fund politicians, trade associations and the media to do their bidding for them. I happen to agree with Richard Branson of Virgin when he denounces the death penalty as punitive and racist (or Marc Benioff of Salesforce when he suggests moving staff seeking to escape the regressive new death penalty law). Texas Abortion). I admire former IBM CEO Ginni Rometty and Merck’s Ken Frazier for addressing the systemic barriers faced by black employees without college degrees. I find it disappointing, however, to hear some pharmaceutical CEOs defending their decision to withdraw patents for vital vaccines from emerging markets. But I still prefer that they plead their cause publicly.
Economically, evidence is mounting to show the financial benefits for companies that consistently apply their principles and actively work to solve societal problems. Seeking to silence CEOs who embody this approach undermines the leadership styles and corporate culture that we should be trying to promote instead.
That’s not to say that all company statements should be believed. After the deadly assault on the US Capitol on January 6 last year, hundreds of companies vowed to withdraw funding from Republican lawmakers who pledged to overturn the 2020 presidential election result. many big names, including Disney, Mastercard and Nike, have kept their word, but others have not. We saw a similar gap between words and deeds following the May 2020 murder of George Floyd. Such inconsistency plays directly into the hands of those seeking to discredit corporate activism.
But the answer is not to let the superficial become the enemy of the sincere. From reviving our pandemic-stricken economies, to urgently reducing greenhouse gas emissions, to delivering life-saving Covid vaccines to the poorest countries, and to narrowing the race, gender and wealth differences that separate our societies at the seams, corporations have an outsized role and responsibility. Our democracies are teetering amid a wave of misinformation, while the waves of populism and extremism show no signs of abating.
So let’s not train leaders who are truly ready to take a stand. Most of them did not intend to become leaders of society, but that was the responsibility given to them by the times. This is a time that demands more leadership, not less.