Here is the translation of the article by Pierre Casse, SKOLKOVO Leadership Professor, published on Slon.ru. The original text in Russian is available here.
How do you think, why Warren Buffett may ask the US Congress to impose higher taxes for American billionaires? And what could make US investment bankers renounce not only their bonuses but salaries in 2008-2010? The answer is almost clear: public opinion becomes more and more important for the companies. Top managers feel the pressure of public opinion and can’t ignore it if they want to stay on the top.
World financial crisis has stressed the issue of corporate social responsibility. Taxpayers now really doubt if they can trust leaders – they saw the latest show no concern about public finance and disability to cope with unexpected circumstances.
Press publications kept aggravating the anger. Stories about top managers’ immense income and spending showed their total unconsciousness and no feeling of remorse. People saw that the bankers played with their money, lost everything, but stayed with their bonuses. You’d bet, nobody can like that.
The first wave of discontent has passed, being redeemed by the bankers’ renouncement of their bonuses and government’s appeal to social responsibility; but the second time wouldn’t work out like that – people are now more careful about their money and those whom they trust them. Now public wants to know not only what managers do with their clients’ money, but also what they do with their own.
In the meantime we see another power arising – the employees of large corporations, who don’t want to pay for the top managers’ mistakes with their workplaces. Against this background those politicians become popular who speak of business mission to improve life of the society and not just to make money. Successful growth now becomes just a means for that goal.
It seems that the companies will have to consider what they can answer to a question “What do you work for?” (“For the shareholders’ sake” as an answer is not going to satisfy anyone anymore.) And the managers who don’t get it today may leave their posts in the nearest future.
Crisis as a corporate responsibility challenge
Why does Warren Buffett ask the US Congress to impose higher taxes for American billionaires, and why do investment bankers renounce their bonuses?
World financial crisis has stressed the issue of corporate social responsibility. Taxpayers now really doubt if they can trust leaders – they saw the latest show no concern about public finance and disability to cope with unexpected circumstances.
Press publications kept aggravating the anger. Stories about top managers’ immense income and spending showed their total unconsciousness and no feeling of remorse. People saw that the bankers played with their money, lost everything, but stayed with their bonuses. You’d bet, nobody can like that.
The first wave of discontent has passed, being redeemed by the bankers’ renouncement of their bonuses and government’s appeal to social responsibility; but the second time wouldn’t work out like that – people are now more careful about their money and those whom they trust them. Now public wants to know not only what managers do with their clients’ money, but also what they do with their own.
In the meantime we see another power arising – the employees of large corporations, who don’t want to pay for the top managers’ mistakes with their workplaces. Against this background those politicians become popular who speak of business mission to improve life of the society and not just to make money. Successful growth now becomes just a means for that goal.
It seems that the companies will have to consider what they can answer to a question “What do you work for?” (“For the shareholders’ sake” as an answer is not going to satisfy anyone anymore.) And the managers who don’t get it today may leave their posts in the nearest future.
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