An Open Letter to Business Leaders

Dear Colleague,

It is perhaps most fitting for me to begin by saying that this letter was written by a human being.

Who would have thought that the day would come that such an opening to a letter would be necessary? Yet advancements in artificial intelligence and the rapid advancement of technology – along with the disruption they bring – are just two of the many reasons that I write today.

This is an extraordinary time to be in business. Your predecessors in leadership could never have imagined the capabilities now accessible to your organization. You have an unprecedented ability to communicate and market to broad audiences; to leverage talent well beyond the bounds of your headquarters; and to produce products and services with a level of efficiency that lowers costs and brings higher margins than ever before.

But, as your business has grown, no doubt you’ve witnessed the ever-expanding risks that accompany your pursuit of success. Perhaps you’ve woken in the night with troubling visions of your organization in reputational, regulatory, or legal peril because a strategic decision went awry. By day you’ve probably heard employees asking your organization to do more to care for people, and regulators increasingly expect that you will also tend to the impact you have on the planet. Meanwhile consumers are calling for your responsible use of new technologies, and your protection of their well-being.

Then, of course, there is the constant pressure you face to ensure that your business succeeds financially, and that the needs of your primary stakeholders (especially investors, shareholders, or owners) are met.

Lest you think that I am writing merely to remind you of your problems, I want to call to your attention to an important fact:

You and your organization have before you the greatest business opportunity of all.

Another disruptive shift is taking place around you; this one directly affecting how your organization can succeed. Your stakeholders are realizing that the problems of the world are not going to be solved unless your business is part of the solution. They will pay more for your products and services if you make a positive impact with some of your profits. Your employees will be more engaged, loyal, even willing to promote your organization if they believe you operate with a strong sense of purpose, and that the core values you espouse are a central part of your decision-making. There may also be new lines of business available to you if your organization will think differently about your impact.

Over time this observation has surfaced in conversations about sustainability, community impact, ESG, human rights, carbon emissions…and other important efforts to spur the private sector to engage in complex world issues. Many businesses have responded. Yet the majority have done so by thinking that doing good is ‘important to do’ when resources allow, or regulation requires it.

That perspective, as the old adage says, is ‘missing the boat.’

You will open up new opportunities if you use a different lens. Align your business strategy with your company’s purpose and corporate values. Define your key stakeholders as investors AND the groups you intend to positively impact (internally and externally). Do so and you will find that you transform?your business. Not only will your decisions about new ventures be clearer; you will select people and planet issues to champion, navigate unexpected challenges, and benefit your stakeholders more effectively. You will also reduce your risk for wrongdoing and build stakeholder trust because the public sees that you demonstrate integrity.

This kind of success can be achieved, but don’t just take my word for it. An extraordinary Blue-Ribbon Commission of leaders has been considering this phenomenon for the past year. The report they released, entitled Changing Our Mindset about Corporate Responsibility: A New Mandate for Change, not only makes this case; it provides practical guidance to help you and your team embrace business integrity and capitalize on this trend. You can access their report at: https://www.ethics.org/download-brc-report/ .

Without question your job is extremely difficult, and few people truly appreciate the pressures, challenges, and risks you face on a daily basis. But disruption is here. It is no longer the case that companies can exist merely to make money, or to create shareholder value. Your employees, investors, and workers are changing all that.

It’s time to embrace the new mandate for business: success also means embodying business integrity and doing good. There will be tradeoffs, for sure, but the world around you will benefit. Your company will, too. You will realize new opportunities that your predecessors could never have imagined. ?

I encourage you to join this movement and will await your success in doing so.

Sincerely,

Pat Harned, Ph.D.

Chief Executive Officer, Ethics & Compliance Initiative

Chair, ECI’s Blue Ribbon Commission on Corporate Impact