\\ Weekly Insights \\
The expectation that organisations should be held accountable - on a broader range of issues, to a broader range of stakeholders - is a point emphasised by UK CEOs. A recent survey conducted by PwC dug into this point asking many UK CEO’s around key targets. They shared:
This echos the points made in Larry Fink's 2022 Letter to CEOs where he dug deep into purpose.
He shares:
“[Voice] is more important than ever. It’s never been more essential for CEOs to have a consistent voice, a clear purpose, a coherent strategy, and a long-term view. The stakeholders your company relies upon to deliver profits for shareholders need to hear directly from you – to be engaged and inspired by you. They don’t want to hear us, as CEOs, opine on every issue of the day, but they do need to know where we stand on the societal issues intrinsic to our companies’ long-term success.”
Considering this sentiment, two UK CEO’s shared:
Michael Ryan, CEO of Dalmore Capital, says: “The purpose of a business used to be to generate profits for its shareholders, almost full stop. And if you dared suggest objectives that were not consistent with dividends and profits, you’d be shouted down. But the world has changed. The general view now is that CEOs are accountable to the public.”
Steve Gray, CEO of Nuffield Health, adds: “CEOs have to have 360-degree responsibility, not just to the board, the shareholders and the City analysts. CEOs have a responsibility to everyone and everything that goes on within an organisation. We are just at the start with this trend. It’s going to grow faster and faster.”
We are even seeing this reflected in employee bonus and incentive plans:
Global CEOs committing to ESG targets in their bonus and incentive plan, by company size
Larry Fink’s letter dives into this further going into the relationship between workers and their employers sharing:
“Companies not adjusting to this new reality and responding to their workers do so at their own peril. Turnover drives up expenses, drives down productivity, and erodes culture and corporate memory. CEOs need to be asking themselves whether they are creating an environment that helps them compete for talent.”
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