How a ‘crisis of conformity’ is stopping corporate leaders from saving the world

Business leaders are ready to ‘do the right thing’ but need the ‘radical collaboration’ of philanthropists and corporate social investors as their catalysts.

This was the conclusion of a conversation between two leading figures in the movement to change ‘business as usual’ that concluded last week’s C Summit, run by philanthropy networks EVPA and Dafne.

Halla Tómasdóttir is the CEO of The B Team, a group of business and civil society leaders working together ‘to transform business for a better world’. She was speaking with EVPA chair Steven Serneels, who asked: “How can the community of corporate social investors play a role?”

Serneels said it was “easy to get overwhelmed and sometimes even paralysed” by the massive challenges facing society and the planet, from Covid to climate change, to the crisis in inequality and the globalised power of the market.

“How can we move back to hope and action?” he asked. 

Steven SerneelsIt is easy to get overwhelmed and sometimes even paralysed... How can we move back to hope and action? – Steven Serneels 

Tómasdóttir said business as usual had “left us on a burning planet with a broken social system”. She said the world required a change to more “principled leadership”. This meant having the courage to focus on sustainability, equality and humility.

Serneels suggested many corporate leaders could see the challenges on the horizon but were “locked into” a system that forced them to deliver “in the next quarter, next year, three years”.

He said foundations could apply a “golden nudge” to their corporate parents – but in reality it was a “David and Goliath” battle even “to get a listening ear from the corporate side”.

Tómasdóttir said the philanthropy and corporate social investor (CSI) community “can and must play a critical role in helping to drive this transition”.

“We have examples of businesses leaders doing the right things but who end up losing board support, investor support and in some case losing their jobs,” she said. “I think CSIs and philanthropy [can provide] critical risk capital to help us fund the shift to new mindsets, new business models and new metrics and models.

“We are in this reality of being stuck in the old system knowing very well we need to go to this new system and I think your role in it is to help fund and give support to all of those who are working to shift the system. That’s not something that one organisation or one corporate funder can do. So you can help create what I would call almost like the 'pilot space' for the new ways of working. And if you do that I think leaders everywhere are now so ready to do the right thing but they are stuck in the crisis of conformity in a broken system. And so, help us to create that new reality is my call to action.”

Halla TómasdóttirWe have examples of businesses leaders doing the right things but who end up losing support... and in some case losing their jobs – Halla Tómasdóttir

She added that corporate leaders were faced with a “jungle” of demanding new measures and metrics from governments as well as “thousands of not for profits” asking them to do more. Amidst the “alphabet soup” the CSI community could help “fund systemic thinking to innovate and push the system to support the kind of leadership that we all want to do”.

There were three key shifts that needed to take place, Tómasdóttir said: From short term to long term – “from quarter to quarter century”; from financial goals to global goals – the SDGs; and “from shareholder primacy to stakeholder governance”.

“We need a reset,” she said. “We are still working in an economic system from the Friedman era – maximising shareholder wealth. But I think we all know if we want to go from this moment to a future state where we have shared prosperity and a healthy planet, we need to change how we lead, how we do business and we need an economic system that lets us do this.”

Pioneers Post was a media partner of the C Summit, which took place online on 3-4 December and was co-organised by EVPA and Dafne. Find all our reporting from the event here.