CEF Spotlight

Corporations as Stewards: Getting Beyond the Starting Blocks

By Susan Albers Mohrman, James O’Toole, and Corporate stewardship_new
Edward E. Lawler III 

Stewardship entails a profound understanding and acceptance of the organization’s interdependence with the societal and ecological contexts in which it operates and becoming a force for building a viable future. The chapters in this book offer a variety of perspectives about the threats to the sustainability of earth, humanity, and the global economy, and many examples of the approaches that corporations, working with other institutions, are taking—and should take—to deal with them. The authors show why the forward-looking practices of these corporations are important first steps, but insufficient departures from business as usual to keep pace with the growing problems facing the world.

Corporate leaders are becoming more concerned about the challenges facing our planet and its inhabitants, and many are now convinced they must fundamentally change how their companies must operate in order to be sustainably effective. Climate change, water shortages, decreasing biodiversity, unequal distribution of wealth and economic opportunity, social unrest, and cyber-attacks are among the acknowledged threats to the sustainability of businesses around the globe.  

The challenges are increasing in both likelihood and severity of impact, yet there has been more discussion and debate about them in the business community than transformative action. The order of the day has been the wringing of hands with, at best, the bolting on of sustainability initiatives to business models designed to optimize the traditional goal of increased shareholder wealth.

Today, corporations play central roles in communities, nations, and the world, and their unprecedented access to resources and power position them to become “stewards of the future of humanity and the earth,” and we believe they are ethically obligated to act as such. Stewards not only make responsible use of that which they hold in trust, they leave it in an enhanced condition for future generations. But to become responsible stewards, profound changes in the way business executives and their corporation act are required.

We recently assembled a group of experts to chronicle what is known about how corporations can act as stewards and to identify what paths they must take in order to assume that role. Together we have produced a book entitled Corporate Stewardship: Achieving Sustainable EffectivenessAlthough diverse in discipline and focus, the authors of this volume agree that the changes required are fundamental, and entail nothing short of the re-purposing of corporations. Corporations must become providers of meaningful employment and equitably distributed wealth in the context of a healthy and sustainable global environment. They must do so not in spite of the interests of their shareholders, but because the future of those investors, and the futures of all of us, depend on creating a sustainable planet.  

There is much we can learn from companies that are already on the path to stewardship. The “usual suspects” emerge as the key levers of change, but with subtle twists:

  • Corporate leaders such as Paul Polman of Unilever and Marc Benioff of Salesforce.com are going to great lengths to redefine the purpose of their companies to include broader social, environmental, and ethical goals, and thus deliver expanded value to the communities and stakeholders they serve.
  • Companies such as Novo Nordisk and Anglo-American are introducing transparent reporting systems that enable them to track and simultaneously achieve triple-bottom-line outcomes. These integrated reporting systems shine light on social and ecological outcomes, as well as financial performance.
  • Kingfisher plc, Patagonia, and others have crafted strategies in which social and environmental concerns are integral components and drivers of their business models, not just bolt-ons.
  • Unilever is designing its production, human resource practices, and management processes to optimize positive, and mitigate negative impact on environments, communities, and stakeholders. Starbucks has aligned its organization to help solve critical societal problems.
  • GE’s Ecomagination program focuses innovation on meeting broader social and environmental needs, helping the company to learn how to operate in concert with the needs of the earth and humanity.
  • Nike, Toyota and IBM, and newer companies such as Timberland and Lululemon spend time reflecting on the true purpose of the corporation.

After examining the non-traditional practices of leading companies, the authors have concluded this fundamental lesson: the human race cannot engineer its way out of the mess of its own making. Making real progress will depend on expanded aspirations for corporate stewardship, and new assumptions about what “good business” means, which will entail:

  • Striving for shared value, rather than focusing solely on shareholder value.
  • Protecting and enhancing the earth and its people, rather than exploiting these resources for financial gain.
  • Acting to create a world with healthy employees, communities, and natural systems, rather than engaging in sustainability initiatives as a way to achieve business success.
  • Taking leadership roles in solving the problems of the world, rather than assuming that is the role of governments, and that business need only comply with what it is legislated to do.
  • Collaborating with other stakeholders and sectors to build a global system governed by different principles and a new sense of equity and justice, rather than wielding corporate power to steer a disproportionate share of wealth to capital.
  • Focusing on long-term sustainable effectiveness rather than short-term financial outcomes.

Much has been learned over the past decade about how corporations can use their power to help create a viable future for all humanity. Nevertheless, despite pockets of progress, the world is slipping further behind on many social, economic and environmental dimensions. While some forward looking companies have spearheaded excellent social and environmental initiatives, it is clear that global sustainability cannot be achieved one company at a time. All corporations must learn to think in terms of how the global social/economic/environmental system operates as a whole and must head toward a different finish line.

Each company and each employee has to be part of the solution. That will require the development of a deep appreciation that the fate of the world, of each business, and of each individual, depends on how we work together to face our shared challenges. We’re in a race against time—one that we must win to insure planetary and human well-being.


Susan Albers Mohrman
is a Senior Research Scientist at the Center for Effective Organizations in the Marshall School of Business at the University of Southern California.

James O’Toole is Executive Director of the Neely Center for Ethical Leadership, in the Marshall School of Business at the University of Southern California.

Edward E. Lawler III
is Distinguished Professor of Business and Director of the Center for Effective Organizations in the Marshall School of Business at the University of Southern California.

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