Results for: board racial diversity
Activist CEOs speak out—is there a way to do it better?
It feels like CEOs are stepping into it—the political fray, that is—all the time these days. And recently, there has been a lot of pressure on CEOs to voice their views on political, environmental and social issues. According to the Global Chair of Reputation at Edelman, the expectation that CEOs will be leaders of change is very high. Last year, Edelman’s Trust Barometer showed those expectations at a record high of 65 percent; “[t]his year, the call to action appears to be yet more urgent—a rise by 11 points in the public’s expectation that CEOs will speak up and lead change. Today, some 76 percent of respondents believe CEOs need to step up.” Similarly, in this year’s annual letter to CEOs, BlackRock CEO Laurence Fink focused on the responsibility of corporations to step into the breach created by political dysfunction: “Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues. These issues range from protecting the environment to retirement to gender and racial inequality, among others.” In the absence of action from government, he counsels CEOs, “the world needs your leadership.” (See this PubCo post.) To be sure, a number of CEOs have jumped in to meet this challenge. But this study, “The Double-Edged Sword of CEO Activism,” suggests that, notwithstanding the public perception of widespread CEO activism, the incidence of CEO activism is actually relatively low. And public reaction seems to vary depending on the topic, but can, in some cases, lead to consumer backlash. Is there a better way to handle it? The authors of this article think so.
BlackRock CEO promotes corporate “purpose”: should corporations step into the governmental vacuum?
In this year’s annual letter to CEOs, BlackRock CEO Laurence Fink once again advocates the importance of a long-term approach, at the same time mourning the prevalence of political dysfunction and acknowledging the resulting increase in public anger and frustration: “some of the world’s leading democracies have descended into wrenching political dysfunction, which has exacerbated, rather than quelled, this public frustration. Trust in multilateralism and official institutions is crumbling.” For a moment, I thought he was going to veer off into “American carnage,” but instead his focus is on the responsibility of corporations to step into the breach: “Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues. These issues range from protecting the environment to retirement to gender and racial inequality, among others.”
PwC’s 2017 Annual Corporate Directors Survey shows directors “clearly out of step” with institutional investors on social issues
In its Annual Corporate Directors Survey for 2017, PwC surveyed 886 directors of public companies and concluded that there is a “real divide” between directors and institutional investors (which own 70% of U.S. public company stocks) on several issues. More recently, PwC observes, public companies have been placed in the unusual position of being called upon to tackle some of society’s ills: in light of the “new administration in Washington and growing social divisiveness, US public company directors are faced with great expectations from investors and the public. Perhaps now more than ever, public companies are being asked to take the lead in addressing some of society’s most difficult problems. From seeking action on climate change to advancing diversity, stakeholder expectations are increasing and many companies are responding.” But apparently, many boards are not taking up that challenge; PwC’s “research shows that directors are clearly out of step with investor priorities in some critical areas,” such as environmental issues, board gender diversity and social issues, such as income inequality and employee retirement security.
Want to increase company performance? Increase the proportion of women in corporate leadership
by Cydney Posner So says a new study from the Peterson Institute for International Economics. The results suggest that the presence of women in corporate leadership positions may improve firm performance and that “the magnitudes of the correlations are not small.”
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