Sir Richard Branson: CEOs should stand up to their shareholders more often
The world needs more CEOs to stand up to their shareholders, according to serial entrepreneur Sir Richard Branson.
Speaking in Oxford last night at the Skoll World Forum, Branson, founder of the Virgin Group, made clear his admiration for CEOs who were brazen in putting their company’s social values ahead of purely financial return.
As an example, he said the CEO of Apple recently stood up to the company’s shareholders and told them that if they did not like the fact that it was doing something to help fight global warming, they should sell their shares and invest elsewhere.
“I thought that was very refreshing,” he said. “If your company is not making people’s lives better, it won’t exist…We need more CEOs standing up to their shareholders.”
Branson shared the stage with fellow “rock star” (according to moderator Mindy Lubber, president of sustainability leadership organisation Ceres) Arif Naqvi, founder and group chief executive of the Abraaj Group, a leading private equity investor in global markets.
Naqvi said that part of his success was realising it was necessary to be driven by stakeholder engagement.
“We were very focused on driving value in almost every element of what we were doing,” he said.
Asked what stakeholder engagement meant, Naqvi said it was about long-term value creation.
“Too much of what we do is driven by… instant gratification,” he said. “A company cannot be an island of excellence in an ocean of turbulence… You can’t drive a Range Rover through Soweto without doing something for Soweto as well.”
He made it clear that this way of behaving was not simply a “nice” thing to do, but was part of his company’s business principles. And he added that these principles were not about becoming a charity. “Charity implies an unequal relationship between the giver and the recipient,” he said.
Naqvi called the financial crisis a “great moment”, because it forced the world to think about what was wrong with the system, and said the world was now at a watershed time.
Photo credit: Jarle Naustvik, Flickr