Why Does a Company Exist? Purposeful Leadership & the Principles of ESG

The greatest risk facing companies today is a dearth of purposeful, ethical, and impactful leadership.

To thrive in a Volatile, Uncertain, Changing and Ambiguous (VUCA) AI-driven World, corporate boards and the c-suite need to successfully develop and sustain a purposeful, ethical and impactful leadership mindset.

They also require corresponding technical and people skills to manage changing external and internal risks and to seize and exploit new and unanticipated opportunities.

Our experience shows the greatest risk facing organizations is a dearth of purposeful, ethical and impactful leadership at the top. Leaders require character traits, skills, behaviours, and values that enable them to excel in navigating disruptive change.

They need to develop and sustain a purposeful, agile, ethical and impactful leadership mindset, based on trust and on the principles of ESG, that enables them to anticipate and manage corporate risks and opportunities. These companies have high-performing corporate cultures.

The most successful companies grasp that Stakeholders’ values must be in alignment with their organization’s values. Stakeholders want to see their values reflected in the organization’s values. Corporate leaders must create, promote and sustain the company’s purpose, and the ethical strategic vision that drives company value. Leaders must maximize the long-term value of the company.

Today, however, an increasing number of stakeholders espouse that how we make money is as important as what we do. Indeed, 90% of a company’s market value is based on intangible assets, such as brand and corporate reputation.

The transition from shareholder to stakeholder capitalism is difficult for many companies. Along with stakeholder activism, human capital management is driven by demographic shifts and other changes in the workforce that impact our immigration and labour policies.

AI is increasingly replacing jobs. A 2023 McKenzie report says that generative AI would automate 60-70% of employee workloads. The potential for cost savings and efficiency gains produced by generative AI excites CFOs, but boards and the C-suites must also gauge the associated perils. For example. the surge in electricity demand from data centers is now outstripping the available power supply in many parts of the world. AI is mutating rapidly. Its broad impact is largely unknown.

To thrive amongst the challenges and opportunities afforded by AI their leaders need a flexible, adaptive and anticipant mindset.

Boards and management need far greater awareness of the effects of AI on company governance. To thrive amongst the challenges and opportunities afforded by AI their leaders need a flexible, adaptive and anticipant mindset. According to the National Association of Corporate Directors (NACD)1 and the National Association of Insurance Commissioners (NAIC)2 purposeful and ethical leadership has a vital role to play in successfully navigating this era of exceptional disruptive change.

If unprepared, companies scramble to survive, and they typically fail.

The Bonar Institute can help.

Contact us for a complimentary consultation. We offer pertinent, proven training modules for board directors and management based on AI user case scenarios.

As a Bonar Institute client, your journey with us consists of either digital modular training or an integrated approach combining live training, coaching and mentoring. You can expect the same high level of expertise, delivery and service following our proven engagement model.

1.? NACD: The Purpose of Boards: Leading with Purpose: National Association of Corporate Directors 2022

2. ?NAIC Model Bulletin on Use of AI by Insurers December 15, 2023

James (de Gaspé) Bonar, Ph.D, PCC is the Founder & CEO of Bonar Institute for Purposeful Leadership. James has over 30 years of experience in Canada and the United States as a senior executive in business and the non-profit sector and as a management consultant and professional executive coach.