For the past few years, we’ve been fielding calls from CEOs and other C-suite leaders who find themselves under increasing pressure to engage in — and take public positions on — issues that their companies would have considered outside their purviews only a few years ago. Recent research, includingCompanies are starting to recognize that there can be as much risk in inaction as there is in action, and a wrong move can have significant reputational and financial consequences.
Boards should demand from their CEOs a thoughtful decision framework to cut through the noise and ensure their companies’ words and actions are grounded in purpose, authentic to the organization, and risk-adjusted. The goal should be to create a consistent approach that helps the leadership team prioritize or weigh issues critical to their stakeholders and determine corresponding actions that ultimately support a business objective.
Track record: Does the organization already have a credible voice and/or history of engagement on the topic? If it has been silent, what has been the reaction to date? Competition: Does the issue represent an opportunity to differentiate the organization from competitors?There are various ways to better understand stakeholder views, including which issues are most meaningful to them and which they deem relevant to the company.
People want corporations to take the lead on solving society’s biggest problems. It’s time for boards to put these issues on their agenda.