The business of doing business, by which I mean transforming resources into products and services in the most efficient and sustainable way, has never been more challenging, yet at the same time, the opportunities have never been greater. The transformative forces underway—driven by the world’s increasing complexity, interconnectivity, and velocity, as well as a rapidly changing geopolitical environment—create a need for new models of engagement among business, government, and civil society to address the shortcomings of our existing multilateral governance system and the critical challenges of our times. By serving as a responsible and responsive stakeholder in the global community, global business has a unique role to play in safeguarding our collective future. The urgent task now is to define how it best fulfills this role and the qualities its leaders must possess to do so effectively.
The concept of corporate social responsibility (CSR) has long been used as an effective lens through which to examine the actions business can take toward ensuring mutual long-term well-being and sustainability. CSR provides context on the role of business in the global community, benchmarking business performance against its responsibilities to society and the environment as well as to shareholders. Yet the definition of CSR has become increasingly broad, referring to anything from the health and safety of workers to sustainable sourcing or philanthropy. CSR alone, therefore, is not sufficient to help optimize corporate behavior and decision-making, and should be supplemented with five other pillars of a company’s engagement with its stakeholders: corporate governance, corporate philanthropy, corporate social entrepreneurship, global corporate citizenship, and professional accountability.
Corporate governance refers to how a company is run—in accordance with local and international law, transparency and accountability requirements, ethical norms, and environmental codes of conduct. Essentially, it is a corporation’s basic “license to operate.” Absent good corporate governance, no collaboration with the wider stakeholder universe is possible. A good example of an initiative that successfully binds corporations to a common set of