CEOs are definitely the heroes of 2020.
That was the bold assertion made by Salesforce CEO Marc Benioff during a wider debate on a familiar theme - that of Stakeholder Capitalism - that took place as part of this week's ‘virtual Davos’ meeting of the World Economic Forum (WEF).
Benioff has long been an articulate and outspoken champion of the stakeholder concept, first posited by WEF founder Klaus Schwab, and has over the years striven to put it into practice at Salesforce, both via dedicated initiatives, such as the company's philanthropic 1/1/1 program, as well as empowering the firm to take activist stances on a range of topics, from equality through climate change to homelessness in the firm’s home city of San Francisco.
The argument he puts forward is by now well-rehearsed and familiar - he's even written a book on the subject - but bears repetition:
CEOs around the world need to realize they must manage for all stakeholders, not just shareholders. There has been a mantra for too long that the business of business is business, but today the business of business is improving the state of the world. This is more important than ever.
His comments this week come against a backdrop of the devastating impact that COVID has wrought worldwide in 2020, something which, for all the damage done, has brought out the best in many business leaders, he argued:
This year, in the pandemic, it was CEOs in many, many cases, all over the world, who were the heroes. They are the ones who stepped forward with their financial resources, their corporate resources, their employees, their factories, and pivoted rapidly, not for profit, but to save the world. Just look at the many examples that we have, whether it was the aggregation of PPE, building of contact tracing systems, the development of the vaccines themselves, the development of liquidity into the system to keep the financial systems floating, developing mental health systems to let people have mental health capabilities at critical times. These CEOs delivered when we needed.
Not, of course, that this is an assertion that can be universally applied, he admitted. Another familiar Benioff theme of late has been the need to rein in the excesses of social platforms such as Facebook and their claimed negative influence on society. This too has carried over into the COVID economy, he said:
There were bad actors as well, we know that. We saw it in social media, bad actors and their CEOs who would not step forward to stop lies and misinformation. And a lot of people lost their lives because of bad information that they read on those social media channels. That was very, very much the dark part of 2020.
But that shouldn’t prevent acknowledgement of the positive aspects of the year, he went on, especially as business found itself stepping up to fill a leadership void left by governments in the face of the crisis:
The highlight is the tremendous work that Chief Executive Officers did all over the world…CEOs are gathering every week to figure out how can we improve the state of the world and get through this pandemic, against the dysfunction of governments and non-governmental organizations (NGOs) over the last year. They were not the ones who saved us. So the public is counting on CEOs to make the right calls on political and social issues, way more than ever before.
No going back?
All that being so, it’s surely the case that ongoing expectations for CEO conduct and the exercising of stakeholder responsibilities are now higher than ever before. If that is the case, the next question clearly becomes whether this is indeed a sustainable rise? Or is it a case that the ‘all in it together’, rallying around in a crisis attitude will wane when the crisis itself subsides and the Vaccine Economy kicks in. Benioff’s view is that the better practice he’s seen will be the so-called ‘new normal’ for CEOs:
I think this is a breakout moment for CEOs. Klaus Schwab has predicted this for many years, we've talked about it at Davos for decades, but we would not be where we are in the world today without the outstanding leadership of many, many CEOs, who did heroic work all over the world to basically save their communities. They operated locally, they also operated globally. It was a powerful moment for CEOs and it has not been written about enough. It's hard [for some] to say that CEOs are doing a great job. This is not just about earnings per share, this is not just about shareholder return; this is about, did you make sure that your hospitals have the PPE they need to protect their frontline workers? This is about, did your local community have the contact tracing systems?
I really want to come back to what Klaus [Schwab] has always said: the power of the corporation is not just in the ability to generate money, but the ability to contribute to society, to the community, whether it's in volunteerism, whether it's taking care of your local public schools, your local public hospitals, taking care of the homeless. Now, I'll tell you, I didn't expect this - this is my first pandemic! I didn't expect when we were in Davos last year that I'd be at home two months later and my whole year would be obsessed with, ‘How can I use Salesforce to make lives better for the world during this pandemic?’. But that's been my entire year.
And this isn’t just Benioff’s experience, he insisted:
It's many, many CEOs that I've spoken to. I think we have to say it - CEOs are definitely the heroes of 2020. Just look, for example, at the pharmacy industry CEOs and what they have done, with the world's fastest development of these vaccines, which we badly need to get control of the pandemic and stop it before these mutations get any farther.
Inevitably there will be those who will raise a cynical eyebrow here and think, ‘Well, he would say that, wouldn’t he?’. Certainly, as noted above, it’s an expansion of a familiar theme for those who track Salesforce closely, but since when was consistency of thesis a fault in its own right? What matters is the validity of the assertions being made. Do they hold up to scrutiny?
Away from his personal philosophy, Benioff did cite a third party to back up his argument in the form of the Edelman Trust Barometer, the 2021 edition of which was published last week. Now in its 20th year, the Barometer report is an annual trust and credibility survey, conducted by global comms firm Edelman and based on responses to an online survey of 34,000 respondents around the world, with the data for this year’s publication collated between 19 October and 18 November last year.
Among the most striking headline findings for 2021 is that business has become the most trusted institution among respondents to the survey, more so than governments in 18 out of 27 countries covered by the poll. At the same time, the COVID crisis has taken its toll on faith in the official legislative leadership, with trust in government institutions down 8% globally.
This general loss of faith in the political mainstream varies around the world, inevitably mirroring the local landscape and how effectively or otherwise the pandemic response is perceived to have been handled. This has changed over time as the scale of the crisis has been realised. For example, in the first five months of 2020, a period that saw the initial recognition of and reaction to the COVID outbreak, US respondents initially marked up government trust by 9%, but the second half of the year, taking in the febrile Presidential Election and the rise in infection rates, saw that fall by 6%.
Meanwhile in the UK, there was an initial substantial boost of support for government, with trust levels up 24%, only for this to collapse by 15% in the second half of the year. By the time the Edelman polling was done in October/November, the UK was heading into its second national lockdown period. Given that yesterday the country passed the horrific milestone of over 100,000 COVID deaths, reporting the highest mortality rate in the world when measured against population, how far that percentage would fall now if the survey took place this week can only be guessed at.
That said, the Edelman Barometer doesn’t back up the 'business as trusted hero' thesis entirely without reservation and has some clear caveats. Yes, business is more trusted than government among the majority of countries polled, but it is only explicitly trusted in 16 of those - including the likes of China and Nigeria - while it’s definitively not trusted in a mere three nations - Russia, Japan and South Korea. In most Western economies - including the US, the UK, Canada and the major centers of the European Union, such as France and Germany - trust in business is merely categorised as neutral in the survey findings.
In addition, levels of professed trust have actually declined year-on-year across all business sectors. The technology industry does come out best with a 70% positivity reported among respondents. That’s down 6% in its own right and in fact is the lowest ranking over the past nine years - 2012 saw a 77% approval rating - but it is considerably better than social media firms who sit at the bottom of the pile in terms of public trust (46%), the only sector to come in below 50% approval. That’s perhaps hardly surprising given the scandals of recent years, but adds weight to Benioff’s ‘bad actors’ sentiment.
As to his claim that business has stepped up when government and NGOs have fallen short, the Edelman findings back this notion up, with 68% of respondents believing that CEOs should be ready to do so, while two-thirds (66%) think business leaders ought to take the reins on bringing about change rather than waiting for governments to impose it.
In addition, CEOs should hold themselves accountable to the public and not just to a board of directors or stockholders according to nearly as many of those surveyed (65%), a validation of the overall Stakeholder Capitalism mantra. With that in mind, 86% of respondents want to see CEOs follow the lead of 'activist CEOs' like Benioff - a term he once recoiled from, but now seems comfortable with - and speak out on societal issues, such as the impact of the pandemic (59%), job automation (51%) and local community matters (40%).
But there is still room for improvement among business leaders when it comes to public trust around misinformation and so-called Fake News, a term that sadly isn’t likely to follow its master to the Mar-a-Lago poolside any time soon. Government leaders are suspected of shortcomings in this regard by 57% of respondents, but their business counterparts have little room to be smug here as they don’t do that much better on 56%. In a week in which the CEO of MyPillow has been banned from Twitter for his unrepentant spreading of lurid conspiracy theories around the US election results, that might seem appropriate enough, but as a general finding it frankly comes as something of a surprise.
The better news for business leaders is that there is corporate loyalty in evidence as nearly two-thirds (63%) claim they do trust “my employer CEO”. That’s something that will come in handy in terms of the trust deficit around the safe return to the workplace, a shortfall that Salesforce’s own research data has highlighted. According to Edelman, out of the 48% of respondents who have chosen to return to an office environment, 34% say they’ve done so because their employer has made them feel safe.
So, does the Edelman Barometer substantiate the ‘we can be heroes’ idealism expressed by Benioff. I’d say it does in the main. Certainly it’s not a difficult task to find positive exemplars around the world of executive practices over the past ten months that have gone ‘above and beyond’. Of course there are those who have failed their employees and fallen short in their behavior - and not just the social media bogeymen - but yes, I can certainly go along with praising the leadership shown by many businesses, particularly when (with the obvious exceptions) compared to the shortcomings and borderline deadly incompetence of certain governments around the world.
But the real test will come when the ‘new normal’ - whatever the hell that means - kicks in and we get a clearer picture of whether this is systemic improvement on view or a crisis-inspired aberration on the part of the business 'good and the great'. Let's hope the answer to that - a positive one, please! - is in evidence by the time the corporate jets touch down in the real world Davos this time next year.