Corporate leaders have an obligation as global citizens to play a larger role on the world stage, but they need to understand that this role requires them to perform a difficult and sometimes thankless balancing act, according to CEOs of five of the world''s leading companies.
The CEOs made their remarks during a plenary session, "From Business Leaders to Global Leaders," at the annual meeting of the World Economic Forum. World Bank President James D. Wolfensohn and U.S. Secretary of Commerce Don Evans also participated.
Some 3,000 world leaders from business, government, academia, religion, the media and civil society convened in New York this week.
Microsoft chairman Bill Gates noted that a company like Microsoft is judged on the skills of its employees, meaning issues such as job training and educational reform are now competitive as well as social factors.
"There''s no question your image as a corporate citizen and your ability to move product are closely connected," Gates said.
Turning to the challenges to corporate power by demonstrators on the New York streets during the annual meeting, Gates noted, "It''s a healthy thing there are demonstrators in the streets. We need a discussion about whether the rich world is giving back what it should in the developing world. I think there is a legitimate question whether we are."
Global leadership, participants agreed, requires executives to juggle two sets of responsibilities: They must address the urgent issues of our times, without overstepping the boundaries of democratic legitimacy. And they must contribute to the public welfare, without neglecting their primary role as generators of private wealth. "We are both leaders and statesmen," Wolfensohn said, "although there are those who would like us to be neither."
Unfortunately, no recipe has been written for managing these conflicting duties, noted Louis Schweitzer, chairman and CEO of France''s Renault. The kitchen can become particularly hot for multinationals such as Renault, he added, that look to the developing world for future growth.
While it might seem corporations have an advantage in countries where the regulatory rulebook is thin, the opposite is true, Schweitzer suggested. In those instances, companies must define their own codes of conduct, with the knowledge that mistakes or misjudgments may spark negative publicity, social unrest or worse.
"We have to speak much more clearly and listen much more carefully than we would in our home markets," he said.
But companies will have to do more than meet local standards in order to be judged model citizens, said Taizo Nishimuro, chairman of the board, Toshiba Corp., Japan. Toshiba, he noted, requires its mining operations around the world to adhere to the strictest environmental standards in effect anywhere, even though regulations in most countries are far less burdensome.
"We are moving towards global standards and we have to be responsible as we help governments establish those standards," Nishimuro said.
Rolf-Ernst Breuer, spokesman, Group Board, Deutsche Bank, Germany, said his company concluded it must consider social and environmental issues, even if it means rejecting profitable business opportunities.
Such behavior isn''t entirely altruistic, he admitted. Market research shows consumers will pay a premium for products made by companies seen as socially responsible, while demanding discounts from those that are not.
"Being a good corporate citizens pays," he concluded.
by Sandy Smith ([email protected])