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companies need to show real leadership

January 2005

Business leaders must begin to set their own CSR agendas, not just respond to the latest bout of campaigning, argues Roger Cowe

Leadership is a recurrent theme in CSR, but it’s time it was seen more broadly. Usually, leadership is discussed in an internal context – the need for a CEO and board to demonstrate commitment to CSR if employees are to take it seriously. But leadership should be about more than saying the right things – it should be about doing difficult or unpopular, but necessary, things, and persuading others they are necessary.

In the UK, we have recently seen a tremendous example of political leadership, unfortunately in the context of the Iraq war. But on other matters, Tony Blair and his government have demonstrated followership rather than leadership. In an addendum to his recent climate change speech, the prime minister said he needed to know there was support for action in the business world. Surely leadership means building that support, not waiting for it to emerge?

It is time, though, that business leaders showed more leadership on climate change, and on other aspects of CSR. It is necessary to persuade sceptics that their commitment is genuine, not just spin. And it would yield solid reputational benefits for their companies. Many companies are working hard to reduce their emissions and develop better products. But where are the business leaders who will complain about the pathetically low targets under the UK’s allocations for emissions trading, and tell the Confederation of British Industry to stop whingeing about the climate change levy?

Business leaders tend to be similarly pusillanimous in other areas of CSR. Where is the leadership, for example, that will break the sick compensation culture in Britain’s boardrooms? Which will be the first company to decide that bonuses for all staff should be based on the same proportions of salary, rather than those at the top getting several times their (huge) salaries while outstanding performance by those at the bottom can yield no more than, say, 15 per cent?

More broadly, business seems stuck in the corporate equivalent of the focus group mentality that has been the hallmark of New Labour. Stakeholder engagement is all very well, and necessary to understand issues fully, but merely responding to the latest campaign is not being responsible. Having listened, managers need to set their own agendas. Similarly, businesses like to complain that the consumer is not interested in CSR. Yet they could be showing more leadership in marketing these attributes.

Of course there are many things that business cannot achieve on its own. In that case leadership means telling government what needs to be done to make desired social progress. You cannot lead with your head below the parapet.

Roger Cowe writes for the Financial Times.



Further Information
rogercowe@blueyonder.co.uk
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