Last February, the Edelman Trust Barometer released its global results and related insights for businesses that want to build trust. Among these is the finding that 76% of people want corporate CEOs to take the lead on critical social issues rather than waiting for governments to impose change and 71% want their employer to respond on key social issues. It’s about your social licence to operate, your employee engagement and building trust in the process.
CEO activism isn’t new but you might argue that it’s taking on more amplitude. Two days ago, Heather Reisman, CEO of Indigo Books was interviewed on the CBC about CEO activism. Last week, Maple Leaf Foods CEO, Michael McCain, took to Twitter to denounce President Trump’s role in the missile strike on Ukranian Airlines flight 752 that killed 57 Canadians.
In 2018, Laurence D. Fink, founder and chief executive of the investment firm BlackRock, which manages $6 trillion in investments, sent a letter to Wall Street CEOs putting them on notice that they have to contribute to society and not simply focus on profits for investors. This was the same year the Wall Street Journal pointed to higher stock value for socially responsible companies and promoted: Doing Well by Doing Good: The New Corporate Citizenship.
None of this is new. As far back as 1994, you had companies like commercial carpet tile manufacturer, Interface, leading the way on climate with pledges – and actions – to go net zero. Patagonia and The Body Shop also led the way on issues they cared about corporately.
While 1994 may seem like a long time ago now, the idea of CEO activism and companies doing what’s right for society – at least from a PR perspective – goes back to the late 1920’s. At the time, AT&T vice-president, Arthur Page ushered in a new era of strategic, corporate public relations. He advocated for organizations to respond to the needs and concerns of the public and to shift from one-way communication to real change on the part of the organization. In essence, he advanced the notion that public support provides an organization’s licence to operate.
So, perhaps it’s the 80’s “greed is good” that is the aberration and after the global financial crisis of 2008 we’re just now returning to first principles, but when we fail to heed the wisdom that’s been around for a century, we fail to understand the cost of losing trust in the interim.
If you’ve read any of my previous articles on building trust, you know that my formula is Trust = competence + benevolence. It’s the benevolence that builds trust, everything else is just a transaction. Arthur Page told us this 100 years ago.