Canadian corporations can’t ignore the role they play in addressing society’s challenges

As published by the Globe and Mail.

Canadian society has undergone profound change during the COVID-19 pandemic.

We’ve changed the way we work, the way we shop, the way we study and the way we interact. It has changed how we look at our health care system, especially in how we care for the elderly and the at-risk.

But it has also had a profound impact on our social consciousness. The realities of the pandemic have required Canadians to act as a collective through the shuttering of our economy, physical distancing and the wearing of masks to protect ourselves – and each other.

While physical distancing has kept us from directly interacting, the commitment to do so has demonstrated how interconnected we all are and has brought us closer together as a nation. But with that has come a greater expectation that everyone, businesses included, will do their parts to keep us safe and strong through these unprecedented times.

A trust barometer survey by Edelman in May demonstrated just how expectations of business have changed since the pandemic began. Almost all Canadians said they expect business to be an active partner with government in addressing the crisis.

A recent KPMG in Canada survey found that most Canadians feel their employer is doing their part, with 82 per cent saying they trust their employers to take and maintain all the necessary health and safety precautions to protect them from the virus.

These surveys reflect the growth of stakeholder capitalism – where companies are increasingly scrutinized for actions taken, or not taken, to support the broader needs of society, not just their shareholders.

As we have seen with the Black Lives Matter movement, this growing sense of social consciousness has citizens around the world opening their eyes to the historical injustices, inequity and racism driving a demand for real change.

In KPMG’s new CEO Outlook, 71 per cent of Canadian business leaders told us the public is looking to them to play a greater role in addressing societal challenges – and more than three-quarters of Canadian CEOs said they have a personal responsibility to be a leader for change on these issues.

But barely half of Canadian CEOs felt their corporate “purpose” provided a strong framework for decision making during the pandemic, with more than three-quarters of them admitting that the COVID-19 crisis has required them to re-evaluate purpose to meet stakeholder needs.

The challenge for leaders is not to focus their time on writing new purpose statements but to actually understand how what they do has purpose for their stakeholders. Canadians have been very clear in their social demands – they increasingly want to work for, invest in and buy from companies that align with their values and focus on more than shareholder returns.

The world we live in when we emerge from this pandemic will be very different that the one that entered it. As such, it is critical that organizations look at what they can do to:

1. Support their employees’ personal and financial health. When the crisis is over, organizations will be measured by how they treated their employees. Consumers will factor this in when deciding to do business with them, and it will weigh heavily on their ability to attract the talent they need to drive their recovery coming out of the pandemic.
2. Ensure they maintain a diverse work force. In recent years, Canadian organizations have made a concerted effort to be more inclusive and diverse. The disproportionate impact of COVID-19 on people of colour and women is squeezing them out of the work force at a greater rate, which threatens to erase these gains. Diverse workforces produce greater innovation and returns. Without enacting a strategy today to retain women and people of colour, an organization may quickly find it is out of step with its customers and society as a whole.
3. Be active in the community. Canadians increasingly expect companies to be partners in dealing with the issues facing society. This means supporting and contributing solutions to key issues like systemic racism and poverty.

Canadians’ memories will be long on how they judge the actions of organizations today and the overall role they play in the recovery.

I believe Canadian business leaders are up to the task of addressing these new expectations as we build a stronger, more resilient Canada.