CEOs Exit the Trump Era With Reputations Intact
Maybe the idea that “shareholder primacy” is no longer the sole purpose of a corporation is finally taking hold.
Bloomberg, February 16, 2021
U.S. chief executive officers had a pretty good 2020 despite the ravages of the pandemic and a severe economic contraction. Polls show that the country’s biggest companies and its leaders are enjoying the highest levels of approval among the public relative to almost any other institution. As a group, they are perceived as capable and competent.
This stands in sharp contrast to the ineptness toward the Covid-19 pandemic exhibited by governments at every level. State and local leaders showed a spectrum of incompetence, but the failure was greatest at the federal level. The White House exhibited weak leadership, confused the public with misinformation, failing to even encourage mask wearing. Highly effective vaccines were created in a miraculously short period of time, only to have the Trump administration botch the vaccination roll out.
The role corporate leadership plays in society – economically, socially or politically – is sometimes overlooked. As a group, CEOs have a large impact on everything from technology to public policy. I tend more toward critic than cheerleader of the C-suite, but even I couldn’t help but notice the immense differences effective leadership made between the public and private sectors. Businesses and their leaders have not always been recognized as competent and trustworthy. Bankers were rightly blamed for being a major cause of the 2008-09 financial crisis.
It’s too early to tell if this was a “one-off,” with executives rising to the occasion – something leaders tend to do – or the beginning of a permanent change in corporate behavior. Perhaps the high profile announcement in August 2019 by the Business Roundtable, a group that lobbies on behalf of Corporate America, that “shareholder primacy” is no longer the sole purpose of a corporation, but should include a commitment to “all stakeholders,” which includes customers, employees, suppliers and local communities, was more than a mere public relations ploy.
Consider the role played by CEOs over the past 12 months…
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I originally published this at Bloomberg, February 16, 2021. All of my Bloomberg columns can be found here and here.
