By Dr. Randal Dick
OneAccord Nonprofit Principal
If you are a business or nonprofit leader committed to leading in a socially responsible manner, your job may be at risk. This simply shouldn’t be. This blog calls out the problem and suggests a solution.
The Problem of the Double Standard
The problem sets up around the issue of corporate social responsibility. Unless you were in a coma for all of 2017, you know we have been through an unprecedented year of increasing demand on corporations to invest in social responsibility.
A recent Forbes article on the subject said, “As 2018 unfolds, it’s likely that companies will continue taking unprecedented action to accelerate social and environmental progress ... Research shows that most Americans support these issues, and many companies will likely face increasing pressure from their employees and customers to take a stand.”
Corporate power, like any form of power, has the potential to damage people, and too many good leaders are getting hurt in an unjust manner. A team of researchers at Notre Dame conducted a study into the involuntary departures of CEOs of Fortune 500 companies from 2003 to 2008 and found that those who invested heavily in social responsibility programs were 84 percent more likely to be terminated if company revenue lagged than CEOs who made little or no investment into social responsibility efforts.
This is a double standard, and everyone who has been held accountable to a double standard knows how dangerous and damaging it can be. Boards can be terrible about this and the board that is particularly toxic is the board that holds the executive accountable for what they do not say.
The Solution: Clarity and Accountability
Power, though dangerous, can be rendered safe. All it takes is intent and being mindful.
The fact that 84 percent of those who invested in socially responsible programs were fired versus only 16 percent of those who did not indicates that maintaining revenue is considered a prerequisite of corporate social responsibility. The question is, how many boards spelled out to the CEO in advance that a drop in revenue due to corporate social investing was criterion for judging their effectiveness?
Whenever we are holding someone responsible, we need to make sure of two things. First, the desired outcome needs to be crystal clear to both parties. Second, the leader being held accountable needs to know in advance about behaviors, omissions or other violations that could incur penalties.
How many of the boards who fired the 84 percent told the CEO, "We are not happy with this revenue drop but never spelled that out. We won’t penalize you for something we didn’t warn you about, but from now on we expect a revenue neutral or positive result"?
That is safe power. It’s the road less travelled, which is part of why the really outperforming companies are comparatively few.
About the Author
Randal is a results-driven, development and execution-oriented leader with more than 25 years of experience leading high performance teams. He’s a proven business professional, capable of leading change in both the boardroom and on the frontline, with a strong track record leading strategy development, entrepreneurship, performance and evaluation globally across a variety of social enterprises and functions.