{"id":7055,"date":"2020-08-29T10:03:10","date_gmt":"2020-08-29T10:03:10","guid":{"rendered":"https:\/\/crigroup.com\/?p=7055"},"modified":"2022-07-12T14:14:12","modified_gmt":"2022-07-12T14:14:12","slug":"responsible-management-and-ceos","status":"publish","type":"post","link":"https:\/\/crigroup.com\/ar\/responsible-management-and-ceos\/","title":{"rendered":"Responsible Management and CEOs"},"content":{"rendered":"

As of 13 August 2020, COVID-19 has affected more than million people globally, including 744,385 deaths<\/span><\/a>, reported to\u00a0<\/span>WHO<\/span><\/a>. The virus has also had severe economic implications, leaving organizations facing a unique set of new challenges that can only be summed up in one word: uncertainty. And the only way to navigate these uncertain times is through leadership. <\/span>This is critical right now, as COVID-19 has magnified societal vulnerabilities. Good leaders can and should lead society into a new \u201cnormal\u201d. However when Harvard economist\u00a0<\/span>Greg Mankiw argued in a New York Times opinion piece<\/span><\/a>\u00a0that\u00a0<\/span>CEOs are qualified to make profits, not lead society<\/span><\/a>\u00a0this is somewhat inadequate to the times we live in now.\u00a0<\/span>Furthermore,\u00a0Doug Sundheim<\/a>, contributor at Forbes,\u00a0has argued in his article\u00a0“CEOs Have A Responsibility To Help Lead Society”<\/span><\/em><\/a>\u00a0that Greg’sc arguments just simply do not fit today\u2019s business models. This “shareholder-first business model” originated from 1970, however 50 years on a lot has changed and at a time when over\u00a0<\/span>70% of the largest entities on earth are corporations<\/span><\/a>, not nations, Mankiw\u2019s view is troubling.\u00a0<\/span><\/p>\n

The sheer number of corporations around the world should make us understand that business impacts societies on a global scale; therefore, business leaders have the responsibility to at least consider those societies and how they impact them.\u00a0<\/span>The singular management goal of CEOs is no longer about maximizing returns to shareholders, but to support society as business has grown more interconnected and complex. Today, business and society are weaved together in an intricate way, both depending on the other for stability and success.\u00a0<\/span><\/p>\n

The COVID-19 pandemic has also changed businesses and created a surge in the number of positive collaborations between companies, institutions and governments. Our article\u00a0<\/span>\u201cCOVID-19 prompted innovative leadership<\/span><\/a>\u201d reflects how Mankiw fails to grasp the world in which CEOs are now in fact leading communities and helping societies.<\/span><\/p>\n

Mankiw asks the reader to imagine having to make an executive decision and how effective and simplier it is when your only priority is profits, and not the wider set of stakeholders \u2013 i.e., employees, suppliers, communities, and shareholders. Mankiw defends the idea that c<\/span>orporate management\u2019s mandate should be the narrow self-interest of achieving greater profits for shareholders, not broad social welfare.\u00a0<\/span><\/em>He goes on to list several additional hypothetical questions. A social-driven leader would have to consider:<\/span><\/p>\n