Right now, in boardrooms everywhere, the conversation is starting to shift. Topics that have traditionally been taboo in the workplace such as race, religion, politics, and access to healthcare are now all around us. COVID-19 and the rippling effects of a long-overdue reckoning with racism have moved these issues from “nice to haves” to urgent non-negotiables on the corporate agenda. Now, no one can look away… including, and especially, Corporate America.
To address these issues head-on and proactively plan for the future, companies need to give Corporate Social Responsibility (CSR); Environmental, Social, and Corporate Governance (ESG); and Diversity, Equity, and Inclusion (DE&I) their rightful seat(s) at the table. Here are five reasons why:
There’s been a movement happening around redefining the role of business to mean something greater than just profitability. The idea is that alongside maximizing value for shareholders, businesses must also elevate the interests of its stakeholders, which can include employees, customers, and partners.
In his management meetings at Starbucks, Howard Schultz used to imagine two empty chairs–one for an employee and one for a customer–and asked himself if what was being discussed would make them proud. The sentiment wasn’t about keeping everyone happy. It reflected deep consideration for how business decisions at the highest level may impact them.
The world is changing and it is becoming increasingly clear that business as usual no longer works. To avoid more of the status quo, companies need to broaden their definition of who their stakeholders are. For example, the communities where our businesses operate and the environment are also stakeholders. Those interests need to be represented in the boardroom as a company’s ability to be successful is dependent on their stakeholders’ ability to thrive.
I recently attended a virtual salon with Athena Alliance focused on ESG in the boardroom where the presenter suggested something novel: your company’s sustainability plan is its survival plan. This is to say, the disruption unfolding all around us is real. Issues like COVID-19, racial injustice, and climate change aren’t going away anytime soon. Creating a plan to address these key issues is one way to ensure the survival of your business.
CSR, ESG, and DE&I used to operate as special interest groups, brought in reactively to respond to a crisis. In many ways, that is still the case. Corporate statements tied to racial injustice represent one way this shows up on the defense. Think about what it could look like on the offense:
This proactive thinking can guide leadership teams to both immediate action and innovative, long-term planning.
You’ve likely heard the expression, “Doing well by doing good.” The strategies mentioned in my previous point aren’t just nice things to do or a way to check the social good box. Embracing values can help profits and share prices in the long run. For example, hiring diverse teams can lead to better decision-making, which can lead to better products, and ultimately, to better sales. Taking measures to address climate change can result in major cost savings for companies down the line.
There has been a lot of talk over the years about the need for companies to align with the values of their customers. While this is an excellent first step, the real value comes from proving (and reproving) those values through ongoing business practices and actions. Consumers don’t just want to hear that your business is committed to doing good, they need to see that you are actively invested in building the kind of world they want to live in.
People ask me all the time if I think philanthropy can solve some of our biggest social challenges. My answer: philanthropy alone is not enough. It has to be dollars plus action. It’s writing the check AND opening the door for someone who could really benefit from the opportunity. It’s making the statement about supporting the Black community AND committing to double Black representation in leadership.
In my conversations with our grantees at Salesforce, the number one thing I hear is how grateful they are for our employees’ volunteer time – this is what moves the needle for them. Facilitating action at scale requires real planning and rigor. It requires a team and buy-in at the board level, tightly woven into strategy with measurable goals to encourage accountability and ROI.
There is a reason why topics like race and other issues are entering the boardroom. These deep-seated, systemic issues have been bubbling under the surface, and when mixed with a global pandemic, it created a domino effect. People are demanding change. When a company’s goals and priorities are balanced across people, planet, and profit, it is capable of achieving great things.
But this level of change cannot be done by any one person, business, or government. It’s going to take everyone’s participation, which is why it is so important to have the right people at the table.
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