Stakeholder Capitalism: What Is Required from Corporate Leadership?
Davos, Switzerland - By August 2020, companies will be offered a set of sustainability measurements against which they can measure themselves, with the plan being to encourage sustainable business and sustainable investment.
Brian Thomas Moynihan, American businessman and the Chairman and CEO of Bank of America, explained, during an evening panel at the World Economic Forum (WEF), moderated by its founder, Klaus Schwab, that 100 Chief Executive Officers have worked on a set of sustainability measures.
Moynihan said the concept was to identify how companies can actually measure sustainability in a way that all stakeholders – from investors to companies – could agree upon. These metrics could then be measured and reported upon in annual reports, and the plan is now to ensure wider adoption, he added.
“We have to make progress on SDGs [Sustainable Development Goals]… Charity can’t solve these problems; governments can’t solve these problems on their own.”
Siemens Chairman, Jim Hagemann Snabe, added that we need to ensure that it is possible to measure the value we create for all stakeholders, and now there is a set of 22 measures that can be implemented, down from 650.
Feike Sybesma, businessman and Global Climate Leader for the World Bank Group, explained that a clearer, more concise, set of measurements will aid investors, as they will be able to see which companies are sustainable.
The issue of sustainability is still on the agenda after 50 years of WEF, said Sybesma. He explained it made good business sense to take care of all stakeholders, including the environment, as no-one will remain successful if the world fails.
The world is at a tipping point where climate change is not just some topic we talk about, it requires real action said Snabe. He said this may result in companies being reinvented, reskilled, and restructured. They may also need to be repositioned to get out of some businesses and move into others. “You got to do the right things.”
Ginni Rometty, chair, president, and CEO of IBM, said the era of the Fourth Industrial Revolution – or 4IR as it is called – means all jobs will change; tasks are moving to the high-end and low-end, hollowing out the middle. This calls for massive retraining and a change in the paradigm around skills, and people will need to be retrained back into the workforce.
It would not be good for anyone if the digital era is not inclusive, if this divides the world into more haves and have-nots, said Rometty. There is a duty to usher this technology safely into this world, and that means preparing for it through public-private partnerships, she added.
Founder, chairman and co-CEO of Salesforce, Marc Benioff, said maximising shareholder profits alone led to inequality and damage to the environment. Stakeholder capitalism is a more equitable way of doing business for all stakeholders. “When we serve our stakeholders, business is the greatest platform for change.”
Every CEO has a responsibility to think about all stakeholders, and the planet is a stakeholder, said Benioff. “We are in a planetary emergency.”