New Era – New Challenge – New Leadership

The world is being reshaped by the Pandemic, and business faces a new era where stakeholder voices matter.

The recession ahead of us is likely to be of a scale not seen since the 1930s. The public’s view of business was already changing due to corporate failures, social inequality, and looming climate change: it has become increasingly critical and much less tolerant. Societies globally are less stable, and measures taken to mitigate the effects of the epidemic mean government’s influence on business is increasing dramatically. Business resilience been found wanting with regard to the Pandemic; how much more resilience will be required to meet the encroaching climate crisis? The risks for business are on a previously unthought of scale. Leadership must take new forms to succeed in the new normal. “…a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders… Ultimately, purpose is the engine of long-term profitability.”

- Larry Fink, Founder, Chairman and Chief Executive Officer of BlackRock, Inc.

In this Overture Fidelio argues that ESG represents both an unprecedented risk for business but also an exceptional opportunity for companies that are able to deliver value for both shareholders and stakeholders. Success will depend upon leadership and ESG represents a new leadership competence. In our Overture we set out 10 attributes that will characterise the companies that succeed; and also the seven levers of value which will determine (i) a Board’s ability to satisfy the interests of shareholders and stakeholders and (ii) to generate value. SEVEN LEVERS OF VALUE

1. Value & Purpose

2. Strategy

3. Decision Making

4. Composition

5. Remuneration

6. Risk

7. Engagement

These seven levers form Fidelio’s ESG Leadership GRID.

To read further about the shift from shareholder to stakeholder primacy and the implications for Boards and leadership, click here.