ESG may be fading—but moral leadership isn’t
Quick Take
Despite ESG's decline, the importance of moral leadership remains strong.
Key Points
- ESG initiatives face increasing skepticism.
- Moral leadership is crucial for sustainable business.
- Companies must adapt to changing ethical expectations.
📖 Reader Mode
~4 min readGood morning. I first met Dov Seidman in 2007 when he published a book called HOW: Why HOW We Do Anything Means Everything. In it, he built the case for creating a culture of moral leadership, based on his philosophy and experience in building LRN, an ethics and compliance training company. As Seidman put it: “How we do anything means everything.” The message resonated with leaders, especially as attention surged around “stakeholder capitalism.” (Seidman addressed CEOs on the topic at the 2016 Fortune-Time Global Forum.)
While interest in stakeholder capitalism ebbed amid an ESG backlash and other issues, moral leadership has become increasingly important in an atmosphere of growing distrust, dishonesty, and divisiveness. Seidman founded and chairs the How Institute for Society, which convened a group of leaders in business, academia, philanthropy and media yesterday to talk about the state of How in advance of Seidman being honored by 92NY. Because the conversation took place under the Chatham House Rule, I’ll share some top-line takeaways:
Model behaviors, not values. One business leader pointed out what Seidman has long talked about with me: Generic values are meaningless in most contexts. Talk about the behaviors that you want to see modeled in interactions—in short, how people treat each other—and reward that.
Look to Minnesota. A few people mentioned the remarkable surge of civic engagement that we saw in Minnesota during the ICE raids and how that seemed to turn the tide on immigration policy. What anchored it was a sense of people being their neighbors’ keeper. That hyper-local, hyper-personal sense of trust and the village green is becoming an important bulwark against the erosion of values in other realms. Several spoke about the hunger for a middle ground anchored in community.
AI requires a new type of How. We are creating synthetic workforces that have to have a moral model in which to operate. Yes, we need guidelines for humans and a way to keep us in the loop. But we also need principles, guardrails, and a stronger organizing structure for keeping agents and AI in check when the human is not there. And several shared views on what’s lost when we direct AI to serve up an answer, denying ourselves the joy of discovery, education, curiosity, and the journey to reach that conclusion.
Share the light. This was the theme of the afternoon and the evening. Lots of people right now are grabbing the spotlight, redirecting the light and, in some cases, trying to turn it off. Great leaders—and I’ve seen this consistently over my career—make an effort to share the light so that it’s a two-way conversation and others can benefit from the attention. Wise words and behavior that others notice.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
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S&P 500 futures are down 0.19% this morning. The last session closed down 0.07%. The STOXX Europe 600 was up 0.76% in early trading. The U.K.’s FTSE 100 was up 0.68% in early trading. Japan’s Nikkei 225 was down 0.44%. South Korea’s KOSPI was down 3.25%. China’s CSI 300 was up 0.40%. Hong Kong’s Hang Seng was up 0.48%. India’s NIFTY 50 is up 0.28%. Bitcoin was at $77K.
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CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.
— Originally published at fortune.com
