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November 1, 2021

In Camera Session with Hon. John Manley: The role of the corporation in society

By Prasanthi Vasanthakumar, Institute of Corporate Directors

The corporation’s role in society has been hotly debated, highlighted by the U.S. Business Roundtable’s statement redefining the purpose of the corporation in August 2019. Since that pre-pandemic pledge, much has certainly changed.

In the second video of our In Camera Sessions, our 2021 ICD Fellow, the Honourable John Manley, joins Rahul Bhardwaj, ICD President and CEO, to discuss the evolution of the corporate sector’s impact on, and responsibilities to, society.

With leadership experience in both the political and corporate spheres, Manley is uniquely qualified to comment on the intersection of public policy, business and society. His conversation is followed by insights from other distinguished leaders on corporate citizenship, and the expectations of boards to deliver on environmental and social outcomes, especially in the pandemic era.

Here are some highlights from the video.

John Manley: Getting the best outcomes
In his conversation with Bhardwaj, Manley delves into the role corporate Canada must play in supporting the government’s capacity to achieve outcomes. He emphasizes the importance of collaboration between the public and private sectors, shares his three rules of politics, and explains why a diverse board is better prepared to tackle emerging issues.

When asked about the CEO’s role in speaking up about social issues, he recommends caution. In his view, highly-paid CEOs that sound too sanctimonious create cynicism.

“Stick to what you're good at, stick to what you know,” he says. “And make sure you put your business in the context of the role it can play in society, whether it's a financial institution or an extraction company. What you know is where you have genuine expertise.”

Looking to the future, Manley notes the trends of globalization and global supply chains are weakening. “We need to pivot,” he says. “Canada needs to rely on itself more… I think we have the resources, people, institutions and attitudes that give us the ability to continue to prosper in this environment.”

John Haigh: Defining corporate citizenship
Following Manley’s discussion, John Haigh, Co-Director of the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School of Government, presents his view of the role of the corporation in society.

Haigh invites viewers to put themselves in the shoes of the CEOs of Delta Airlines and Coca-Cola when the U.S. state of Georgia passed legislation that was widely interpreted as restricting voter rights. As both companies are headquartered in Atlanta, how should their CEOs respond?
 
Haigh walks us through the key considerations in the decision-making process, which include identifying your responsibilities as a board, understanding your commitments, both individually and collectively, continuing to deliver financial performance, and acting with integrity.

“If you think about your purpose and values, and how you would respond to some of these issues, you start to get to the core of what your institution should focus on,” says Haigh. “There are no simple answers. These questions will manifest themselves in the most difficult times, not when the choices are easy, but when they are hard, and they will often be in grey zones. They will require trade-offs.”

As directors return to the board table, Haigh advises them to think about their individual beliefs and values on key social issues, and the role their institutions should play, now, before crisis strikes.

Corporate purpose post-pandemic
Indeed, most organizations were not prepared for the COVID-19 pandemic, arguably the biggest crisis many of us will face in our lifetimes. In the video’s concluding panel, Marty Cej, Partner at Longview Communications and Public Affairs, leads Simon Kennedy, Canada’s Deputy Minister of Industry and Innovation, Carine Smith Ihenacho, Chief Governance and Compliance Officer, Norges Bank, and Karina Litvack, Director, Eni S.p.A, in a discussion on how businesses interact with societal change, especially over the past 18 months.

Kennedy observes that the pandemic’s impact on the world economy and society has highlighted the gravity of other systemic risks, such as climate change. Governments are taking a harder look at these issues, which will impact their relationship with business in the future.

On the other side, Litvack outlines what businesses expect from government. Using the example of climate change, she notes the importance of an enabling policy environment for companies that are trying to transform their business model.

Smith Ihenacho believes responsibility for sustainability, including the business’s outcomes around environmental and social issues, lies with the board. As an investor in 9,000 companies across multiple countries, she highlights how important it is that companies report on sustainability issues.

Kennedy expands on this idea, noting the growing expectation that boards have the capabilities and competencies to address sustainability issues like net-zero, equity, diversity and inclusion, and social welfare. Litvack concurs, adding that environmental and social issues are no longer just management’s job.

“Whether it’s about rectifying imbalances in the diversity profile or reimagining the business model for net-zero, the pressure is on us to demonstrate we have clarity on our goals and a roadmap to deliver on them,” says Litvack. “The majority of board directors don’t have that degree of skill. We have to skill up.”

The final word
Certainly, these are challenging times for everyone. Investors are asking governments and businesses to be predictable in an increasingly unpredictable environment, and the role of the corporation in society is constantly evolving. But as Manley notes, there are plenty of reasons to be optimistic.

“We have lots of problems and lots of things to do,” says Manley. “But when all is said and done, and I look at the list of countries in the world, there's not one I would rather be in than this one.”

Thank you to our sponsors for enabling us to deliver this In Camera Session with Hon. John Manley:

Series Sponsors
  • LEAD: Canadian Pacific, KPMG, Longview
  • PREMIUM: Deloitte, Torys
Session Sponsor
  • John Manley: CAE, Telus
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