SINGAPORE – The new era in corporate leadership requires chief executives who can not only grow shareholder value but also take care of the interests and well-being of employees, customers, the environment, and society as a whole.
This was the main message that Rajeev Peshawaria, chief executive of Stewardship Asia Centre, delivered to delegates at the Stewardship Asia Roundtable 202022 on Thursday (March 31, 2018).
He said, “Today’s corporate leaders are not those with the highest titles or authority.” “Today’s leader will be defined primarily by his or her genuine desire to create a better tomorrow.”
Corporate leaders must not only look out for shareholder value but also the interests and well-being of the wider society.
Peshawaria argued that CEOs and corporate leaders can generate superior shareholder returns by addressing the very issues that threaten the planet and humanity. Clients, investors, and markets are increasingly attracted to socially responsible businesses.
He cited Unilever and Starbucks as examples of companies that have done well by doing good, balancing profitability with a social conscience.
“Doing good by doing good is possible, but it will require new lenses,” he said. He added that leadership is the genuine desire to create a better culture and that stewardship is about creating value.
In the meantime, stewardship creates value by integrating stakeholders, society and future generations’ needs with the environment.
He added that a good steward leader must adhere to four simple, but not complicated, rules.
First, interdependence. This is the realization that the world is interconnected. One’s success is dependent on the success of others.
Second, steward-leaders must have a long term view in order to create lasting value.
Third, steward leadership involves taking ownership. Leaders must take responsibility for being stewards.
Fourth, steward leaders need to demonstrate creative resilience and tenacity in finding innovative solutions to disruptive problems.
When Richard Quest, CNN Business anchor and editor-at large, asked Mr Peshawaria about the role of directors in all of this, Mr Peshawaria replied that the board played a critical role in putting the right CEO in the place.
He stated, “Stewardship is an art and not a science.”
“As a CEO, you must know what is right and wrong.” Leaders must have the ability to uphold the right values, even when it’s not convenient.
The board plays a role in identifying such people.
However, Mr Peshawaria stated that stewardship leadership is not easy.
He cited Nelson Mandela, the late South African freedom fighter and president, who stood for forgiveness and reconciliation even though he lost his wife and children, who disagreed with him.
He said, “As a CEO you can do anything you want to do.”
“But, you cannot be a true leader and steward unless your values are right.”
“Take baby steps with a full spirit and the right intention.”