14 October 2021

Pressure on CEO’s is increasing

“Ceo’s around the world are struggling more than ever with their role” was the title of a recently published article in the Financial Times (FD). CEO’s are being put under pressure from all sides. Governments expect them to solve major societal issues, such as global warming. Shareholders want more sustainable busines models, but also a return on investment. Furthermore, action groups do not shy away from lawsuits if their demands are not met, as happened with Shell earlier this year.

Governance is becoming more diverse and complex

Business as usual is no longer good enough. Hague has already published about the increased call for moral leadership of CEO’s. According to a spokesperson of the Financial Times, CEO’s are at the center of an increasingly loud and divergent number opinions that they need to take into consideration when conducting their business. This is an growing challenge as governance is becoming more diverse and complex as CEO’s are expected to do more than just optimize financial and economic outcomes.

Spotlight on external affairs

Hence, proactive issue management becomes more critical due to the increased pressure on leaders. Finding a middle way between different views is becoming less and less accepted by the various stakeholders. The Financial Times argues that this happens due to the increased level of polarization in society and politics. For example, Shell was sued by climate groups in The Netherlands to accelerate its climate policy. In the end the climate group won the case, increasing the pressure on Shell to decarbonize.

No longer can organizations solely focus on their chosen target groups. Every company must deal with a broad set of stakeholder and public opinion. This requires good stakeholder management: building relationships and entering into dialogue with parties with overlapping or conflicting interests.

New reality, new leadership

This new reality also calls for new leadership. The survey shows that top executives are more open to feedback than they have been before. They are more likely to question whether they have enough information to make a decision, as they are more aware of their own bias in subjects. A strategic Corporate Affairs approach allow you to remain in charge on the complex outside world, to capitalize on opportunities and avert (reputational) risks. Hague can therefore only endorse the conclusion of the research that was conducted amongst CEO’s: these times require new leadership in which all stakeholders are involved and included.

Questions about Corporate Affairs or stakeholder management?

Hague helps organizations build and strengthen relationships with stakeholders and manages your organizations reputation. For more information about Corporate Affairs, please contact Irene van As, Account Director Hague Corporate Affairs.

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14 October 2021
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