Swift action on Ukraine suggests the days of corporate indifference are over
André Pratte is chair of the Canadian Centre for the Purpose of the Corporation and a principal at Navigator.
The response from the international business community is also unparalleled: According to a list compiled by the Yale Chief Executive Leadership Institute, at least 300 companies have withdrawn from Russia in protest. On March 8, Mr.
This was the case for Shell, which, after initially defending its purchase of Russian oil, backtracked and admitted that the decision “was not the right one and we are sorry.” At the same time, the oil and gas giant announced a series of measures to disentangle itself from Russia. “In Russia, we employ 62,000 people who have poured their heart and soul into our McDonald’s brand to serve their communities. We work with hundreds of local, Russian suppliers and partners who produce the food for our menu and support our brand,” Mr. Kempczinski said. “At the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
Companies that have invested considerable amounts of time, energy and money in corporate social responsibility and environmental, social and corporate governance initiatives wonder how becoming “purposeful” is different. It is very different. Companies often do CSR and ESG on the side, as an afterthought to their operations. “Purpose” is embedded in operations. It implies tough decisions, balancing the interests of the business’s stakeholders.
Some worry that CEOs will become social activists, imposing their own values upon society and ignoring the legitimate interests of their company’s shareholders. But that is not what becoming purposeful is about. Indeed, taking stands on issues should and will remain a very small part of what company executives do. First and foremost, purpose is about the strategic decisions and the operations of the firm.
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