For the past two decades, professional services giant
PricewaterhouseCoopers has been surveying more than 1,000
CEOs around the world each year.
Over the past few surveys, it's become clear that a growing
number of CEOs are concluding that maximizing quarterly growth
is not the path to sustainable, long-term value.
Treating employees as more than an expenditure or incorporating
a societal purpose into your company is no longer seen as feel-good marketing, but a necessity for survival.
Business Insider spoke with PwC global chairman Bob Moritz at the
public companies met with investors to discuss ways to move toward prioritizing long-term value in a way that benefits all stakeholders,
including customers, employees, communities, and shareholders.
Moritz told us that a CEO who complains that shareholders won't
let them make necessary investments for the future are missing
the point (a belief media mogul and former New York City mayor
Mortiz said, adding that you shouldn't have to.
"The onus is on the CEO and the management team to put forth
a value proposition that over a certain time horizon investors
should want to participate and share in the returns of the company,
" he said.
Moritz explained to us that the debate over how to balance short-term
and long-term strategies has been going on in the United States
since the 1930s, but it's emerged in a new context because of the
rise of instant data transfer, years of hedge funds and day traders,
and an increasingly empowered and informed consumer base and
workforce that is demanding more from businesses.
In the 2018 CEO survey (which included more than 1,200 respondents) Moritz wrote that this year's findings reveal a community of CEOs
who are seeing a troubling misalignment of economic growth and
social progress, primarily fueled by income inequality. He offered
four suggestions for ways corporate leaders can address this.
Develop metrics beyond financial goals
"As business executives, we can supplement measures such as GDP
and shareholder value with indicators of quality of life," Moritz wrote.
He said he's found there's an increasing number of chief executives
working with boards to developing long-term goals that will
improve the relationship with the stakeholders other than investors.
For example, consumer-goods company Unilever is working toward
having all of its agricultural raw materials be sustainable by 2020
Implement emerging technologies in a
socially conscious way
For the last few years, one of the hottest topics in the entire business
world is the rise of artificial intelligence across all walks of life, and
how it will displace jobs. Moritz recommended that companies
Invest in employee education
Moritz wrote that he found it encouraging that the majority of the
CEOs surveyed recognized the importance of investing in their employees' skillsets, given that we are in an age of rapidly changing technologies that will either transform or replace existing jobs.
Commit to a purpose that accounts for all stakeholders
January that his company, the world's largest asset manager, would
only do business with companies that could define both their role in
society and their long-term strategy.
Moritz agreed, noting that it's a necessity in today's world.
"From environmental footprints to social impacts to investor demands, businesses are scrutinized by an ever-wider array of stakeholders,"
he wrote. "If they fall short in any respect, they erode a vital commodity: trust. In an age of enhanced transparency and heightened accountability,
a loss of trust has profound consequences."
He continued: "Perhaps the most important job CEOs — and the
broader business community — can do to contribute meaningfully
to social progress, as well as business results, is to commit to a
common purpose, a shared set of values and behaviours, and
drive them through our organisations."
