6) Leading on the Big Issues

It would be good news if the SDGs were used to their full potential by the Canadian business community. Businesses would be linking profit with purpose while addressing major challenges facing the world by creating and sharing societal value with their stakeholders. There would be a reason to rejoice, yet businesses would be asked to go further by voicing their support for the need to have businesses be purpose-driven.

6) Leading on the Big Issues

“Leaders are supposed to lead.” – Zita Cobb, Canadian businesswoman and social entrepreneur

The year 2020 will be remembered for a list of reasons including the Black Lives Matter (BLM) movement which is centered on eliminating systemic racism and police brutality towards black individuals. With the BLM movement has come immense pressure for businesses to speak out against systemic racism and take concrete actions within their organizations and communities to help eradicate it.

According to numerous Survey Participants, the types of expectations placed on businesses in 2020 and 2021 to step up on systemic racism will not be the exception in the future and will in fact become the rule.

Quite a few of the Survey Participants are of the view that to truly be a purpose-driven business that gives prominence to all stakeholders means that in addition to the organization putting in efforts itself, it will also work to influence others to help address societal issues and any injustices towards its stakeholders. In other words, there is mounting pressure for business leaders to lead.

i) Speaking Out on Social Issues

“No one has ever improved the world without making a few people uncomfortable” – Michael McAdoo, Partner and Associate Director at Boston Consulting Group

It is the view of a number of Survey Participants that business leaders will increasingly need to use their positions of influence to voice their concerns, suggestions, and ideas on substantial social matters on the public stage.

This is a departure from the long-standing practice of business leaders staying out of the public discourse. Although it is seen a tad more these days, it is quite abnormal for business leaders to voice their opinions and participate in public debate unless it is a topic that will directly impact their business - and even in that scenario, it is often business associations, councils, or chambers of commerce doing the talking on their behalf.

This is yet another corporate behaviour that was arguably born or at least enshrined out of the ‘Chicago School’ of thought. Milton Friedman did not believe corporate leaders should speak out on public issues. According to Eric Posner, Friedman claimed that “business executives, although ‘extremely far-sighted and clear-headed in matters that are internal to their business,’ evidently became ‘short-sighted and muddle-headed’ in matters of public import.34

Some business leaders appear to be dismissing this element of the Friedman doctrine as well. Chris Coulter implores business leaders to speak out, “Companies have got to speak up – to be an

advocate for positive change is an increasingly important expectation and dimension of corporate leadership. One of the most important impacts companies can have is to use their influence to drive for more systemic changes, within their supply chain, within their industry and within the regulatory and policy environment.”

There is recognition amongst the Survey Participants that it is not always easy for business leaders to speak out on account of potential backlash from stakeholders, in particular customers, employees, shareholders, boards of directors, investors, and governments - which most likely explains their reticence to be heard.

Regardless, some Survey Participants provide a reminder that making a difference is often not easy. Indeed, when asked about the considerations and challenges facing a business leader who wants to be publicly heard on a certain issue, some Survey Participants simply respond with a version of ‘so what?’. Louis Audet observes, “That’s the new world of democratized communications, if we’re afraid of that and take that as a reason to do nothing, then nobody will ever do anything.”

Numerous Survey Participants are strongly advocating for business leaders to speak up and be heard on important societal issues more frequently moving forward. Alison Loat is of the opinion that civil society and the business world need to get used to business leaders speaking out, “There is a lot of care and scripting that goes into CEO’s statements, such that we’re often surprised when a CEO actually says something or speaks from the heart.” Sophie Brochu agrees and would like corporate boards to provide support to allow CEOs to speak out: It takes a board of directors that will allow the CEO to speak on things other than the business.” Lisa Kimmel, of Edelman, which annually releases the Edelman trust barometer, analyzing the public’s trust in certain institutions, believes there is an argument that CEOs not speaking out can thwart their ability to lead, “CEOs particularly in Canada are not willing to be in the spotlight and are generally not willing to take a stand on issues. And they don’t communicate frequently enough with stakeholders. It’s a key issue that prevents Canadians from trusting business leaders in this country.”

It is the view of some Survey Participants that CEOs should start to get accustomed to commenting on important societal issues as the pressure for them to do so will continue to mount. Lisa Kimmel anticipates, “Canadian CEOs are ultimately going to be forced to take stands or to have a position on issues because there’s going to be a swell of grassroots pressure on them to do so.”

ii) Encouraging Other Business Leaders to Act

“Creating a community of interest around purpose, helping business people find like-minded people to spend time with - that’s a pretty good start.” – André Beaulieu, Senior Vice President of BCE Inc.

Some Business Leaders note that members of the business community are people who need support – or a nudge - from time to time just like anyone else.

An interesting number of Survey Participants, including Business Leaders themselves, raise the idea that it would be nice to have peer groups supporting one another as they each go through the journey of transforming their businesses to purpose-driven organizations.

Further, a handful of Survey Participants submit that it will be necessary for there to be some peer pressure on business leaders to step up on linking profit with purpose by creating and sharing value with stakeholders if there is going to be any real change. These same Survey Participants often discuss the need for business leaders to publicly voice their support for the concept of linking profit with purpose. Some believe this could have many positive impacts including improving the relationship between society and business. “If we can get some business leaders together to really truly talk about this as being important to Canadians, we’re going to start to rebuild trust in capitalism, trust in the business community,” affirms Michael McKnight.

The Business Leaders have certainly tried to lend their voice and raise awareness about the discussion regarding the linking of profit with purpose by participating in the interviews for this report.

A considerable number of Survey Participants opine that Business Leaders should also support a similar initiative to that of the U.S. Business Roundtable (BRT) statement of 2019.

On that note, Survey Participants were asked if they thought a Canadian version of the BRT statement would be helpful.

It is frequently argued by Survey Participants that businesses in Canada already do what the BRT statement puts forward as they place an emphasis on all stakeholders rather than a sole focus on shareholders. Some Survey Participants argue this has been established in Canada through law and legal precedent or business practices. “I think the declaration in the US was far more important than it is in Canada because I think Canadian corporations just naturally have a disposition this way, just because our culture is quite different,” says Mark Little.

Moreover, some Survey Participants point out the lack of follow-up to the BRT’s statement is a real problem. Indeed, there is empirical evidence that the BRT statement has not led to any concrete actions by its signatories.35 Louis Audet’s reaction to the BRT statement illustrates some of the concerns the Survey Participants raise, “In view of the state of the nation in the United States, it’s a little late - nice try, but you’ve just begun.”

Consequently, Survey Participants frequently caution that it would be imperative for business leaders who would sign on to a Canadian version of the BRT statement go further on action and follow-ups than their counterparts in the United States. “Statements are important, they’re absolutely important. Today’s markets, today’s consumers are incredibly smart. So, they can see through statements into what’s really happening. If you’re going to put your name behind a statement, you had better be living it,” notes Kevin Sitka.

Figure 14: Views of all Survey Participants on whether a Canadian version of the US Business Roundtable statement would be doable and useful.

Guy Cormier is of the view that a Canadian version of the BRT statement could be helpful if it is sincere, an initiative to spark dialogue to influence decision-makers and not just a marketing ploy. Dr. Marie Delorme agrees and remarks that there have been inauthentic declarations made in the past, “A collective commitment is always a good start. But it is only a start. A statement, without meaningful action, becomes a vinyl trophy. One only needs to look at the commitment most corporations have made to diversity, but a scan of senior management and governance roles provides evidence that little progress has been made in the past 30 years.” Dan Kelly, President, CEO, and Chairperson of the Board of the Canadian Federation of Independent Business, adds skeptically that such a statement might not end up being real in action for many, “I would suspect that the first time an environmental goal or a labour goal got in the way of the share price of a large multinational, it would be ditched really fast.”

Conversely, a part of the Survey Participants observes that although these points against a Canadian version might be true, Canada should still deliver a similar statement to that of the BRT. They argue that not only would a statement be helpful, but it is also needed as Canada is lagging on the narrative of this consequential issue when instead it could be global leaders. Michael Penner remarks, “We are eons’ ahead of the United States in practice and in spirit, but eons behind in PR and announcements.” Martin LeBlanc is of the view that it is of great importance for Canada to put out a statement that is even better in its declaration and in its follow-up because, in the absence of others, the BRT statement is “interpreted as the world’s capitalist system statement”.

The majority of the Survey Participants believe a Canadian version of the BRT should be pursued. “The message that you have more than the shareholders to be accountable to is a great message.” comments one business leader. Suzanne Bergeron declares that “It is imperative and necessary.”

Of the Survey Participants, 70% are of the opinion that a Canadian version of the BRT Statement would be useful compared to only 5% who are of the view that it would not be useful. One-quarter of Survey Participants are uncertain and feel that it would maybe be useful.

Among Business Leaders 66% say a Canadian version of the BRT Statement would be useful while only 7% believe it would not be useful. A quarter of Business Leaders judge that it would maybe be useful. Even if it is not a solution in itself, some Business Leaders argue it can help. Michael Sabia remarks, “The more messages that get sent; it helps. It’s not a solution, but it helps.” Vicki Wallace-Godbout believes since business leaders are busy running their organizations, they often put their own prioritization on each of the stakeholder groups, a Canadian version of the BRT statement could be helpful as it could serve as a reminder of different issues and stakeholders the business leaders should be making time to consider.

Among the Accelerators group 75% are of the view that it would be helpful compared to only 4% who are of the opinion it would not be. It would appear the Accelerators are quite keen to see the business community put out a statement like the BRT’s. Mary Ellen Schaafsma adds, “Yes, absolutely, Canada should do that. We need to step up. Unfortunately, we weren’t the first, but that doesn’t mean we don’t also put our stake in the ground.”

Figure 15: Views of Business Leaders and Accelerators on whether a Canadian version of the US Business Roundtable statement would be doable and useful.

There is a clear majority of the Survey Participants that are of the view that there should be a Canadian version of the statement. On the other hand, plenty of the Survey Participants advocate that a Canadian version would need to be a tad different. They suggest proactively addressing the main issue of the BRT statement by ensuring there is action and follow-up stemming from the statement.

Moreover, it is suggested that any Canadian version include more small businesses instead of just large businesses as the BRT has done. Andrew Molson, Chairperson of Avenir Global and Chairperson of Molson Coors Beverage Company, remarks, “I quite frankly like the idea of making it less ‘big business’ in Canada. There are a lot of small businesses that care a lot about their communities.” Dan Kelly, who leads an organization representing small and medium-sized businesses thinks it would be easier for Canadian SMEs to sign on to such a declaration, “I really don’t think it would be a stretch to get buy-in from small and medium-sized businesses, I think in some ways they are already there.”

Canadian business leaders signing on to a substantive statement that would be supported in action and follow-up would be a significant demonstration of leadership to other businesses in the country and around the globe. In addition to that, it is a great way for business leaders to convince their colleagues of the importance of linking profit with purpose by generating and sharing value with stakeholders.

A few of the Survey Participants speak about how peer groups of business leaders would be helpful for those looking to assist in the effort to overcome challenges facing the globe by linking profit with purpose through generating and sharing value with stakeholders. Some Survey Participants explain that cooperation with other business leaders - even one’s competitors - can be a very helpful exercise. A Business Leader surveyed explains that even if competitors will most likely not collaborate when the topic or matter can represent a competitive advantage to a business, there is no problem to collaborate on issues that affect the industry or the larger community.

Further, it is the view of Michael McCain that it is in the best interest of all stakeholders for businesses to collaborate when appropriate and points to the example that many in the food processing sector agree to not ‘compete’ on safety. Michael McCain speaks proudly of how Maple Leaf Foods will help competitors when it can ensure safety in their operations.

Meanwhile, Elizabeth Alves, Vice President, Enterprise Strategy and Social Responsibility at Cogeco and Nancy Bouffard, Senior Director of Corporate Communications at Cogeco believe one way in which peers can support each other is to have best practice sharing through a network of businesses.

It is the belief of some Survey Participants, that there is a need for some of Canada’s business leaders to act boldly and articulate the value in stepping up to create and share value with society through linking profit with purpose by generating and sharing value with stakeholders with the aim to convince and even apply pressure on other business leaders to do the same. Clarissa Desjardins is of the view there is really no peer pressure at the moment on Canadian business leaders to step up. Accordingly, she says more peer pressure is needed and one way in which a business leader can apply some is to, “Set the standard on something.” She puts forward the idea that taking action and lifting the ‘bar’ on something will apply implicit pressure for others in the same industry or with similar operations to do the same.

One Business leader suggests that a way to influence others in the business community to link profit with purpose is to use the organization’s sphere of influence. The idea is to apply pressure on a stakeholder, so they work on having a more positive impact. For instance, an organization could apply pressure on its suppliers to do more to create and share value with their respective stakeholders such as their employees, the communities in which they operate, and even customers – which has the added benefit of including the organization applying pressure. Zita Cobb adds another example saying that a business can exert influence through its procurement and tendering process, “For every dollar you spend, know where that money goes - and know its impact.”

Some Survey Participants speak about the power of looking at where a business’ money goes and its impact. To illustrate, Louis Audet spoke about how the business he helps lead had done an assessment of who within the organization is the most likely to feel like they are being left behind. This exercise found it to be sub-contractors. Louis Audet argues it is a consequence of the typical tendering process normally putting a lot of weight on price which drives down the ability of the sub-contractor to provide better salaries and benefits to its workers.

Even though a business leader who has successfully embarked on the journey to set up their business in a way that links profit with purpose by generating and sharing value with its stakeholders should be commended, one more thing is going to be asked of them in the future; they will be expected to use their voice and their influence as a business leader to encourage others to follow suit.