A Compact for Responsible Business Leadership
The World Economic Forum (WEF) is a Swiss non-profit organization, recognized by Swiss authorities as an international body. It is committed to improving the state of the world by engaging business, political, academia, and other leaders of society to shape global, regional and industry agendas.
Recently WEF hosted a panel discussion on “A Compact for Responsible Business Leadership”, where CEOs of leading multinationals were invited to come together and exchange their views. The objective of this discussion was to revitalize the relationship between business leaders and the society by exchanging examples set by these leading organizations supportive of ‘long-termism” as against “short-termism”. Additionally, to illustrate how these companies carry out their own accountability towards improvement of the society by following the United Nations Sustainable Development Goals (SDG)s.
The panel comprised of CEOs representing McKinsey & Company, Hitachi, Olayan Financing Company and Philips. The outcomes of the debate highlighted that advancement in technology and short-termism are globally impacting jobs, growth and asset value.
It is absolutely true that 50% of the jobs in the world today can be automated; it has therefore become significant to emphasize on the reskilling of jobs in a wider context. Companies have to look at a longer term by investing more on R&D. Organizations following short-termism optimize their results without being worried of impact on the planet. In the opposite case, the mission statement of a responsible company describes transparency in all its processes and accountability towards its actions to achieve its goals. It is essential to focus more on education to change mindsets of the people involved in recreating a compact between businesses and society. To make this change sustainable, organizations have to be purposeful and focus on aligning their process of doing work with the SDGs.
During the debate, the panel was asked to share any one example set by their company, which changed the way they do their business. The exemplifications were as follows:
- McKinsey & Company
- Olayan Financing Company
McKinsey has made a philanthropic commitment by investing $75 million for youth employment in Kenya, USA, India, Spain and Mexico. The idea behind this commitment was to help develop an approach to bring unemployed youth into jobs through trainings and leadership development.
Philips, an innovation company, has repurposed itself by meeting unmet needs through a long-term horizon of bringing breakthrough solutions. It has a target of changing lives of three billion people by 2025 through innovation. Therefore, it has set a portion of its profits for innovating developing, not developed, markets. Recently Philips has signed an agreement to become carbon neutral by 2020.
Olayan encourages dialogue and financial information with responsible businesses and tends to be transparent in its processes. In the last fifteen years, it has engaged the female population in Saudi Arabia and believes that an integral part of responsible leadership is philanthropy and social responsibility.
Hitachi has always invested towards breakthrough solutions and believes in changing of mindsets of stakeholders that are a part of collaborations focusing for bringing change in the society.
WEF encourages dialogues on various global issues similar to signing of a compact and pursuing responsible business leadership within our business entities. The debate does not end here; every company needs to be actively involved in evaluating its ways of doing business. The approach towards conducting responsible business leadership has to be exemplary for others and should have measurable outcomes. The United Nations SDGs are formulated as key points which, if adopted, help companies to focus and to be purposeful in achieving its goals. Therefore, it is essential to understand and implement the obligation of being transparent and accountable for all the actions that an organization takes that directly impact the society.