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Question: How can CEOs combat the popular image that businesses are evil?

Stephen Miles: So I think the GFC, the global financial crisis created a sense of evil almost in corporations and that evil has diffused to the regular company. It’s not just financial services anymore. This is a broad based issue for every CEO in every industry and I think what really matters from a CEO perspective in terms of brand image and corporate responsibility is taking this seriously and what I mean by that is this can’t be a veneer. You can’t just sort of poke through the veneer and find out that actually what you’re talking about is not what your company is really about, so there has to be this redwood behind all the statements that you make around your corporate image and I think CEOs need to think broadly about value creation now. It’s not just about shareholder value creation. It’s broader than that. It’s how am I creating value for the society that I operate in, in the communities that I operate in? How am I creating value for my employees? How am I creating value for the broader world if you will if you’re a global organization? And you can’t just think about extracting shareholder value.

There needs to be a symbiotic relationship between the corporation and all of its stakeholders, whoever they happen to be and I think again that is a change because we’ve been- beaten into us in every MBA program it’s about shareholder value, how do you create shareholder value. It’s about financial metrics and all of those things matter and you can’t get distracted by all of the noise. You still have to run a profitable company because profitable companies allow you to hire more employees, give more back to the communities that you work in and do great things, so you need that profit motive, but then what, so it needs to be the profit motive plus how am I going to create broad stakeholder value as opposed to simply shareholder value.

Question: What has changed in the world such that businesses now have to think more about stakeholder value?

Stephen Miles: So what has really changed in the world that we operate in today is this connected real time and I mean real time by the second, information era and CEOs today, everything is captured by the second, by the minute and put up on the web for everybody to see, so you’re literally operating in this aquarium and everybody’s commentary is about you and the decisions that you make and are they consistent with the messaging that you’re giving out, so I refer back to this parasitic versus symbiotic. If you have a message that says you’re a symbiotic company and you’re doing these things you’re going to be called out every single day in real time, every minute whether that is actually true or not, so you have to be consistent and you have to, as I say, you need a redwood behind the veneer because everything you do is going to be tested every day and it’s going to be tested by millions of people and it’s going to be up there forever. There is no sort of tabula rasa; it doesn’t just go to a blank slate after you’re done. It stays up there and is on the record if you will, forever, so as CEOs you need to think differently about how you think about corporate social responsibility, how you think about the messaging and brand of your company because A); you’re going to be tested on it everyday and B); people inside and outside your company are going to evaluate and give you a grade and that grade is a public grade, so I think it’s really, really important for CEOs to take this personally very seriously.

Recorded January 12, 2011
Interviewed by Max Miller
Directed by Jonathan Fowler
Produced by Elizabeth Rodd

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