A noticeable percentage of CEOs think that the level of trust across a number of stakeholder groups has improved over the past five years.
However, the fundamental forces that CEOs think will impact their business the most over the next five years – technological advances, demographic changes and global economic shifts – are reshaping society and its expectations of business. There will certainly be positive changes, but issues such as unemployment and resource shortages could be significantly heightened. Business is increasingly expected to engage with such issues, and those that come up with innovative solutions to serious social issues will earn more trust – and more revenues.
Most CEOs we surveyed agree that business has social as well as financial responsibilities.
80% say it’s important for their business to measure and reduce its environment footprint. Over three-quarters think that satisfying wider societal needs and protecting the interests of future generations is important to their business. 74% agree that measuring and reporting non-financial impacts contributes to their business’ long-term success. And 69% say that the purpose of business is to balance the interests of all stakeholders.
Measuring the total impact of an organisation’s activities across social, environmental, fiscal and economic dimensions allows management to understand the trade-offs between different strategies and make the best decisions for stakeholders.
Indeed, such considerations play a key role in in CEOs’ recognition that planning horizons need to account for the short-, mid- and long-term. But leaders also recognise only too well the challenges involved in adopting multiple planning horizons and measuring the total impact of their business. It’s no surprise that most companies focus on measuring and reporting on their shorter-term financial performance.
Indeed, what makes the global trends we’re facing particularly hard to handle is the fact that they require a hybrid set of leadership skills.
CEOs today must be able to run the business of today while creating the business of tomorrow. They must pursue opportunities for revenue growth while bearing the interests of society in mind, and without compromising on values like integrity and quality.
CEO of GrainCorp
Founder and Group Chief Executive of The Abraaj Group
Managing Director of Crescent Group
Group Chief Executive of Transnet SOC Ltd.
MD & CEO of ICICI Bank
CEO of Petroleos Mexicanos (Pemex)
Jean- Dominique Senard
Chief Executive Officer of Michelin Group
Group CEO of Aviva