Social Impact and CEO Reputation: The Fine Line

It takes a certain personality and approach to business to get to the top. You must have those positive attributes of drive, hard work, single-minded dedication, persistence and a refusal to listen to doubters and to those who’ve told you your dream is impossible. A colleague of Steve Jobs working on the first Macintosh computer in 1981, described Jobs as having a reality distortion field, a bubble Jobs lived in that shielded him from the normal fears that held back others. Jobs throughout his careers refused to accept limitations that stood in the way of his ideas, to convince himself that any difficulty was surmountable and that his ideas on so many different topics were the right ones.

Not every business leader will have this reality distortion field, but as your business grows more and more successful, it's all too easy to start to equate its success to your actions. There are many business leaders who have built something from nothing, achieved tremendous success, been championed and awarded by peers and there’s very few who wouldn’t let this go to their head and begin to believe their own hype. This is when, and why, it’s so important to have the right people around you. A reliable team of colleagues and advisors who can help keep you grounded and tell you what you need to hear, not what you want to hear.

For long term sustainable success you must be in tune with those people that matter to your success. For the modern CEO and founder this can be a difficult task. The stakeholder base you need to satiate has expanded exponentially. It now includes not just the traditional groups of shareholders, employees and customers but also activists, communities, more and more regulators, and a worldwide online population who have the power to shape your company’s reputation positively and negatively. Modern CEOs are expected to balance all these stakeholders and all their interests; it’s not an enviable position.

Leaders are under scrutiny for how they interact with society and the environment – and how they demonstrate impact and for more and more companies this isn’t just a nice-to-do; it’s a need to do as the regulatory landscape continues to evolve for businesses of all sizes towards a stakeholder-led approach to ensure business practices are aligned with societal and environmental goals. This shift in how CEOs and corporate leaders are measured on wider company impact is forcing many to take a stance on a myriad of issues they would have traditionally shied away from. It’s a fine line - balancing the company stance with diverse stakeholder views and indeed your own personal views.

One golden rule to help navigate these challenges is to always remember that business leaders should express the company’s opinion, not a personal one. When CEOs and other leaders synonymous with the business put their personal interests over the well-being of the company and its stakeholders, it can lead to unethical behaviour, poor decision-making, and a loss of trust amongst stakeholders. The best CEOs understand stakeholders’ opinions and what’s of material importance to them and they strive to bring stakeholders' thoughts and feelings into the room where decisions are being made. But there is a tightrope to be walked between addressing social issues and the duty a leader has to the company, its employees, and its wider stakeholders. You must be strategic in your engagement and communications to not create friction, reputation damage, and potentially jeopardise the commercial viability of your business.

CEOs can be outspoken on topics but only where relevant to their business and what’s expected of that business – an airline CEO can be outspoken against politicians and regulators in pursuit of cheaper fares, for example, a fashion company targeting eco-conscious customers can be outspoken on environmental issues. But you can’t and should not be all things to all people as you or your company cannot have the legitimacy or credibility in every space.

At times like this, companies must value clear communication and aligning stances with company values at all times. You must be strategic and consistent in how you tackle these challenges, and most importantly, you have to understand your stakeholder landscape. Do your research, map out the potential reactions, understand the impact, and prepare for backlash if there is a risk that you are willing to take with certain stakeholders. There is no one-size-fits-all answer here, and that’s why we have seen a number of business leaders get themselves into trouble. Good reputation governance means actions, communications, and ethical standards are in place to build, protect, and enhance company reputation in alignment with its values and stakeholder expectations.

Look at your words and actions through the lens of your reputation with your key stakeholders.

You must look in before you can speak out.

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