This proposal starts from a bind. CEOs are pulled in every direction by better informed and more demanding employees, customers, communities, and investors, and getting it right is described as almost impossible.
Its answer is the IRG Impact Study, which the authors say shows a way to pivot successfully from shareholder primacy to stakeholder value creation.
Key findings
- The record of the 2019 Business Roundtable declaration is mixed in both directions. Many signatories have since been accused of doing too little, and others have been fired for doing too much.
- Two forces pushed against the agenda: COVID-19 and the financial crisis renewed the focus on the bottom line, and ESG became highly politicized.
- The work continues quietly. Citing WTW Global, the proposal reports that some 77 percent of listed companies now include ESG metrics in their incentive plans, up from 68 percent a year earlier.
- The cost of that quiet is shared learning. Because many companies are flying under the radar, valuable lessons are not being passed on.
- Ninety percent of overperforming companies view stakeholder value creation as a business opportunity rather than a risk, having moved past the polarizing language.
What overperformers do differently
They ground strategy in two kinds of understanding at once: their own company’s DNA, values, and beliefs, and their stakeholders’ perspectives, reality, needs, and interests.
They reimagine the future of their market with a positive vision, and guide strategic decisions with a clear view of the role the company will play in it.
They focus the business with an integrated strategy, educate stakeholders, align executive rewards with shared value metrics, and handle short-term challenges inside that long-term strategy.
They foster interdependence across internal functional silos and across the external partner ecosystem, and they role model Da Vinci leadership by combining analytical, creative, and empathetic attitudes and behaviors.
The evidence behind the claim
The Impact Study is described as the first global cross-C-suite study on the pivot from shareholder primacy. It covers more than 450 C-suite interviews and 750 online survey responses from academics, experts, and practitioners in 61 markets.
It adds deep dives on the board and five C-suite roles, and an AI analysis of the interview recordings and 112,000 business leader social media posts. The fieldwork ran from February to October 2023.
It was run by IRG and the Future of Marketing Initiative at Oxford’s Saïd Business School, in partnership with organizations including NACD, SHRM, ACCA, the Global CMO Growth Council, Spencer Stuart, WARC, The B Team, CKGSB, and the Yale Program on Stakeholder Innovation and Management.
Who would write it
The proposed authors led the study and its advisory board: IRG founders Marc de Swaan Arons and Frank van den Driest, Professor Andrew Stephen, Vice-Dean of Research at Oxford’s Saïd Business School, and Angela Ahrendts, former CEO of Burberry and Apple Retail.
IRG describes itself as independent and not-for-profit, supported by WPP, Meta, Google, Tata Consultancy Services, and other partners, running research, advisory services, and executive leadership programs.
The Oxford initiative describes its own reason for existing as the need to infuse practice with evidence-based solutions, on the view that neither academics nor practitioners should tackle these problems alone.
Scope and limitations
This is a proposal rather than a finished article, and the promised examples are described as real-world illustrations and tales from the trenches rather than as measured cases.
Source
This page summarises Humanizing Growth, by Marc de Swaan Arons, Frank van den Driest, Professor Andrew Stephen, Angela Ahrendts, February 2024.