Corporate social responsibility I Social Compact

Shifting expectations of the social CEO

Sustainability can no longer be considered a fringe issue beyond the remit of a CEO, according to Coca-Cola Amatil Group Managing Director, Alison Watkins.

Addressing CEDA’s social CEO event in Sydney, Ms Watkins described the concept of a social CEO as an uplifting combination of addressing social responsibility, having an active social media presence, demonstrating thought leadership and a lot of pizazz.

Ms Watkins said that over the last decade or two a different set of expectations of CEOs has emerged, largely due to a lack of trust in business and community concerns. Delivering decent returns for shareholders is not enough.

“There is a clear imperative for businesses everywhere in Australia to balance the delivery of results for today with building a sustainable business for tomorrow,” she said.

Drawing on findings from the latest Edelman Trust Barometer, Ms Watkins said there was undoubtedly a lack of trust in businesses.

The Edelman survey had found Australia is one of the least trusting countries with less than 50 per cent trust in any of our national institutions. While business results compared well to other sectors they were still incredibly poor with a majority perception that business is uncaring and inauthentic.

“And the banking royal commission turned the art of ‘bank bashing’ into a reality TV show and accelerated public distrust of businesses,” Ms Watkins said.

But it’s not all bad news for business. Ms Watkins pointed out that the Edelman survey found most respondents trust their own employer to do the right thing and 76 per cent feel CEOs should take the lead on social issues rather than governments.

Ms Watkins said CEOs need to think about their role in social issues to legitimately restore trust.

“For me there’s really two things that matter,” she said.

“First of all, I think we absolutely should take the opportunity to lead on social issues that are relevant to our businesses. For us at Coca-Cola Amatil that includes obesity and sugar and packaging, particularly plastics.

“These are issues where there is a clear alignment with shareholder returns. It’s not an either/or.

“And secondly I think we should focus on communicating using social media in a way that first and foremost builds the trust of our own people and then secondly the community.”

Ms Watkins said there is now a clear community expectation that every part of our community and institutions act on sustainability or, if they’re not, explain why.

“Businesses have matured considerably in how they think about sustainability. For many of us it’s an absolutely integral part of our strategy in a way that wasn’t true 20 years ago,” she said.

“Today sustainability issues are front and centre of everyone’s strategic agenda. They’re at the heart of our brands and or reputation and they’re reflected in our organisational structures and our resource allocation.

“And they’re also reflected in the way our boards spend their time and in the structure of our board committees.”

Ms Watkins said it doesn’t really matter if this shift had occurred in response to lack of trust and a belated recognition of the risk to social licence to operate, or just occurred as companies adapt strategies in line with shareholder interests.

“It’s very clear certainly to me and to most of us that acting sustainably is in line, absolutely in line, with our shareholder interests,” Ms Watkins said.

“To the extent that there is a conflict, it’s usually one about timeframes. So, it’s about how you balance the need to deliver for today with making judgements that set you up for a strong tomorrow.”

Ms Watkins said the Coca-Cola Amatil has two major sustainability priorities; contributing to consumer wellbeing through reducing the sugar content of beverages and reducing its impact on the environment by addressing plastic packaging.

She said a CEO should assume the role of direct communicator with their people and the public.

“If it’s done well it can definitely be a foundation of business trust and take you in the right direction towards reinforcing your social licence to operate,” she said.

“But done poorly it can be inauthentic, it can be seen as spin and it can actually undermine those objectives. I think though it’s clear communities do expect more direct communication from CEOs and doing it well is going to be an important part of restoring trust.”

She said restoring trust in business needs commitment from all and she has no doubt the business community is up for the challenge.

Following her keynote address, Ms Watkins took part in a facilitated panel discussion joined by HESTA CEO, Debby Blakey; Thinking the Unthinkable Founder and Co-Director, Nik Gowing; Company Director Magazine Editor-in-Chief, Narelle Hooper; and Edelman Australia CEO, Steven Spurr, who recently contributed an article to the CEDA blog outlining the latest findings from the Edelman Trust Barometer