CEOs and CSR: A Mismatch?

Last week I was in Berlin speaking at Humboldt University's Conference on Corporate Sustainability and Responsibility. It was the 6th annual conference convened by the very admirable and scholarly Professor Dr. Joachim Schwalbach. I was a little embarrassed because he kept telling me how well-known I was my reputation work and how people were attending to see me!

I had been asked to keynote a morning session on CEO Reputation, CSR and Thought Leadership and participate in the panel discussion afterwards. The panel focused on the importance of CEOs in the world of CSR and sustainable practices. If you want to read more about the conference, please read Elaine Cohen's synopsis which does a terrific job summing it up. She is a much better note-taker than me. Elaine was the moderator for two of the panels I was on and she did an excellent job making them compelling, stimulating and useful for attendees.  She blogs and runs her own social and environmental business consulting firm, specializing in CSR strategy, reporting and assurance. 

For my part, I spoke about the importance of CEO reputation when it comes to CSR. As I see it, CEOs are responsible for assigning their resources to different strategies and pathways. If the CEO wants to commit to sustainability and make the resources available, it will happen. If not, the CEO might just make sure that a CSR report is written and distributed and call it a day. 

The panel that followed my keynote was lively. One of our panel members was a senior executive from Egon Zehnder, the highly reputable executive recruiting firm. We all gasped when she told us that CSR capabilities, expertise, and interest are not qualities that companies ask for when looking to hire CEOs. As Elaine quoted her in her round up, "Instead, CEOs are hired for traditional qualities such as decision-making, P&L orientation, experience, profit maximization etc." It was a rude awakening to a CSR-fest audience and unfortunately, I do not doubt what she said. My sense is that boards spend more time focusing on what the CEO candidate can deliver to the bottom line than how many CSR reports they've signed their name to.  I am not that naive to think that financial performance is less important that CSR. However, the stark realization that CSR is not on board agendas when looking for new CEOs was crushing to a room full of do-gooders (hate the word but you get my drift) and believers.

To my disappointment, CSR has always been a laggard when it comes to what drives corporate reputation. For the many years that I have studied corporate reputation and CEOs, the leading criteria are quality products and services, financial performance, management quality, the ability to build and lead teams and having the right stuff to motivate others. Honest and ethical conduct also figure high in the list of what matters. CSR usually falls in the bottom tier of drivers no matter how important it has become over the past decade and how important it should be considering that the planet is spinning on borrowed time. 

Here is what I think. It still might not be at the top of the list of drivers for executives, boards and other influentials but it is becoming critically important to future consumers. Responsible consuming or buying products and services based on being a good corporate citizen is only going to increase over time as our resources stop replenishing themselves and the younger generations begin populating our ivory towers. The Millennial generation will have to see to it.  When that happens, it will matter to boards of directors and subsequently to those in the CEO consideration set. Time will tell. 

 

CEO performance, Best in the world

Harvard Business Review just released their 100 Best-Performing CEOs in the WORLD list. As the editor in chief says, "We approached the task scientifically, basing the ranking on hard data, not on reputation or anecdote." I was surprised to read this because it somewhat dismissed the importance of reputation and grouped it in a category of hearsay. Oh well. But then later in the press release I read on the ranking, there is an unattributable statement that since the best CEOs are not only those who are high performers investment-wise, they asked Reputation Institute for the top CEOs based on "workplace, CSR, governance and leadership." Of RI's top three reputation-bearers, none are Americans. Seems to me that HBR doubled back on their earlier statement to cover all bases because as we know, CEO reputation accounts for something and perhaps gives CEOs the permission and confidence to perform over the long-term. 

A few noteworthy stats appear in the study findings which I want to list here:

  • 24 of the CEOs have undergraduate or graduate degrees in engineering and 29 have MBAs. Curious how many were philosophy or liberal arts majors. Few I imagine.
  • Only two women make the list -- Debra Cafaro of Ventas and Carol Meyrowitz of TJX. Good for them. 
  • 13 are of nationalities that differ from their companies which is an increase from 2013. Progress is being made in terms of bringing true outsiders in. 

Hope to spend more time reading the full report but that was my first impression. Check out their interactive tables for even more. 

Cybersecurity reputational risk

Just recently heard that our first US homeland security chief Tom Ridge is helping to launch an insurance product that specializes in corporate cyber security policies. In the article, I read that the global economy has lost more than $400 billion annually due to these cyber breaches that seem to be coming at us like a tsunami. Moreover, only one in four companies, if that much, have some form of cyber attack coverage.

I also learned awhile back when we did our Employees Rising survey on how employees were using social media to champion and possibly sabotage their companies, that one of the reasons that companies have chosen to train their work forces about being responsible social citizens was to caution them about how cyber hacking often occurs. And that is from employees themselves who can be unintentionally loose with passwords, clicking on errant links or not understanding well enough the safeguards of protecting confidential documents. Again, another reason for formal social media training at work and recognizing the importance of internal employee communications. 

Cyber breaches are clearly hurting the reputations of companies that find their customer data let loose online from hacking. This has become a major reputational issue and one that companies have to get smart about or they will be joining the ever growing long list of the largest data breaches. Plus the background stories in the media often reveal that companies and their leaders had some forewarning or were lax about privacy controls which only makes matters worse. Need I even add that CEOs have lost their jobs over cyber breaches! This is becoming a reputational issue of epic proportions.

What makes a CEO? Tall, deep voice and marathoner

A few fun (funny) facts about CEOs. The point of the article I read was that as much as we want  diversity at the top, stereotypes persist, persist and persist:

1. 30% of Fortune 500 CEOs are taller than 6 feet 2 inches. Only 3.9% of Americans are this tall. Big significant difference. Advice: Decide on your career path after you measure your height.4. 

2. In a study of CEOs giving speeches, voice quality accounted for 23% of evaluations while content only accounted for 11% (Quantified Communications). Advice: Movie stars should apply.

3. When listening to 792 male CEOs giving presentations to investors, the ones with the deepest voices earned approximately $187,000 more than the average (University of California, San Diego and Duke University). Advice: take voice lessons.

4. CEOs who have finished a marathon were worth 5% more on average than those other slacker CEOs (Karlsruhe Institute of Technology and University of Cologne). Advice: Get out those running shoes.

 

Women executives unlearning uptalk

Yesterday I had to laugh. I can not recall exactly where I read it now but it was about how women interested in the corner suite have to learn how not to uptalk or upspeak.  Frankly, I had not heard of these terms.  However, I did a search to find an apt definition for this post and I found this description in an article that appeared in Fortune last year on how to be an irresistible leader. Fortune was talking about a new book that they say is required reading at Harvard Business School

"Naturally for a couple of communications coaches, the authors offer remedies for habits of speech that undermine people’s influence at work. One of these is “uptalk,” that annoying Valley-girl intonation that makes every sentence turn up at the end like a question. It’s a verbal tic that inadvertently signals “submissive approval seeking” and “creates the impression the speaker is uncertain about things that should not be in doubt” — neither of which conveys strength (or warmth either, for that matter)."

So here is why this all made me laugh. Years ago (many) when I wrote my dissertation, my topic was whether fathers used different communications styles when talking to their 2 year old sons and daughters. My dissertation in general was on the importance of fathers in children's lives and how they influence their early growth and development. One of the findings from my research was how fathers did speak differently to girls and used "upspeak" significantly more often than with their sons. Little did I know how detrimental it would be to women getting on those power lists! I am sure someone out there will now infer here that there has been an ongoing conspiracy among dads to keep their daughters lower on the career ladder to save their own jobs but I hope not. I just thought it was worthwhile to mention that upspeak-training starts pre-kindergarten.

I think that fathers may be more conversational, back and forth, and engaging in their dialogue with their daughters when they are young. With the sons, the fathers held back more and let their sons do their jobs (which consisted of building things). With daughters, dads joined in on the play more often and engaged in uptalk. 

Little did I realize that this style of communications would have to be undone.