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This year’s IBE Annual Lecture welcomed Alison Taylor, Clinical Associate Professor at NYU Stern School of Business and former Executive Director of Ethical Systems, to share her insights on the role of responsible business and ethical leadership. The starting point was her recently published book, Higher Ground: How business can do the right thing in a turbulent world.
Unpacking the words
Alison Taylor opened her talk by highlighting the increasing confusion that surrounds the terminology of responsible business: Ethics, ESG, Sustainability, DEI, Purpose, and Responsibility have become “confounding weird jargon that nobody clearly understands or defines”. However, below the acronyms and loaded words, there is a real, long-standing debate about the role of responsible business in society.
Business, today more than ever, is expected to do much more than deliver, increase shareholder value and not break the law. It is expected to address issues beyond its direct remit, like interrelated sustainability challenges, and for many more stakeholders: employees, community, suppliers, government, investors, to name a few. It is no surprise that business leaders feel besieged (“everybody is yelling at us”). There has never been a more difficult time than today to run a business.
Alison went on to outline three major trends which she said have shaped and sharpened these increasing pressures on business leaders.
The weaponisation of transparency
When previously companies could control the message, via TV, radio and other traditional channels, the rise of social media means that information is now transmitted by anyone, constantly, in real time. "Leaking is the new whistleblowing," Taylor observed, as employees choose to leak internal e-mails, memos and documents rather than discussing their concerns internally. As a result, transparency has become a weapon against corporations. Corporate culture is easily exposed to face the “courts of public opinion”. In addition, the rise of misinformation and disinformation has contributed to increased polarisation and falling trust. When companies are doing something bad, they may be exposed; when they are doing something good, they may not be believed.
The politicisation of business
The second trend is that business has become political: many have taken a stand on a variety of issues. Whilst traditional liberal institutions (e.g. UN) and governments seem to be losing public confidence, business has tried stepping up to fill the gap. Between 2014 and 2020, there was a remarkable number of companies voicing their opinions on issues like climate change, human rights, and diversity. Research suggests that employees increasingly expect their companies to represent not only the values but also themselves (“Why vote when you can pressure a brand?”). But with this transition has come huge challenges for companies on which issues to take a stand on and why. “Pick your battles” was Alison’s advice.
The personalisation of the workplace
The third trend is that “the professional became personal”. As we now have five generations in the workplace, younger cohorts are bringing different perspectives on work ethic and the employer-employee relationship (“It should be my employer’s job to adapt to me”, this new generation often say). Wellness and mental health issues are becoming increasingly important for employees, and they expect their employers to take measures.
As a result, the debate about the role of corporate responsibility has become very polarised. Activists seem to target both sustainability underperformers for not having met their targets, but also leaders, as they expect them to drive systemic change. So, what is the way forward for an ethical leader in times like these?
Ethical leadership
Alison outlined the idea of how ethical leadership is about refocusing on the basics. She presented the 2025 Rankings of the priorities of the public and their expectations of corporate America from JUST Capital. This suggests that there are three issues that stakeholders expect CEOs to focus on:
- Pay a fair, living wage
- Act ethically at the leadership level
- Support worker well-being
The questions and discussion that followed homed in on this theme. There is an urgent need to return to ethics, to the principles of transparency and honesty, human rights, dignity and respect. It is about avoiding overpromising and making big commitments, but instead acknowledging challenges and learnings. For those who want to lead ethically, it is about closing the gap between what you say and what you do.
Author
Dr Elli Siapkidou
Research Director
Elli Siapkidou has extensive experience in research, analysis, evaluation and writing. Following a former career in research and academia, she has worked for commercial and non-profit organisations developing evaluation frameworks and methodologies to assess markets and companies. For the past 8 years, she has focused on ESG and sustainability, creating benchmarks and evaluations to assess responsible and sustainable business practices. Her areas of focus include gender equality in the workplace and supply chains; nature and biodiversity; climate; social and human rights; sustainable finance. She holds an MA in Economics and Management (University of Oxford), an MPhil in European Politics and Economics (University of Oxford) and a PhD in European Politics (University of Athens).