While no one expects management accounting and finance professionals to be able to fix systemic ethical issues on their own, stakeholders—including customers, employees, shareholders, and society—do expect business leaders to address challenges such as workplace inequality to the extent that they’re able. The Conference Board, a member-driven, nonpartisan, not-for-profit think tank, regularly convenes senior executives across industry verticals in virtual and in-person conferences, asking their opinions on ethics and corporate citizenship and researching the steps the attendees are taking to drive lasting change in their own organizations and communities to work toward a more just and civil society.
Chuck Mitchell, executive director of content quality at the Conference Board, argues that leaders have both a moral obligation and a business imperative to address environmental, social, and governance (ESG)—as well as economic—threats to achieve a sustainable business model providing prosperity for all. Objectives include opening equal opportunities in education, workplace advancement, upward mobility, and wealth creation in the context of benefiting the business.
Mitchell stresses that social justice and corporate citizenship aren’t about altruism or being good for goodness’s sake. Finance leaders can help to make the business case for it to be driven from the top down as part of the organization’s long-term strategic plans.
“There’s such an acute awareness of issues around civility, justice, equality, and equal opportunity and a change in the attitude of a workforce that’s looking for businesses to lead in these areas,” Mitchell says. “Even though there’s that realization that now it’s part of corporations’ responsibility, the first issue that one has to overcome is that there’s still a perception out there that there’s a trade-off, sacrificing profit for social good, and that simply isn’t the case—there’s enough data out there to show that you can do both effectively, and, in fact, if you take care of the community, the business, in some instances, will take care of itself.”
HOW ACCOUNTANTS CAN CONTRIBUTE
Conference Board research shows that an overwhelming percentage of employees want their organizations to be engaged and to speak out on social issues, especially around gender and equal pay, as well as, to a lesser extent, race.
“So if you’re head of the finance function or if you’re managing people, the most important thing is to find out what issues are on [employees’] minds and that they feel the company can do more, both internally and externally, to address issues of equal opportunity,” Mitchell says. “It’s really about taking care of the overall well-being of your staff, listening, and getting input from your team members and those that you manage, being very open and transparent and trying to understand what issues they have [top of mind].”
After listening to the issues that matter to employees and other stakeholders, a strong leader can help the finance function to lead by example in being advocates for ethics and corporate citizenship. Mitchell suggests that leaders can begin by recognizing that there’s probably been inequality of opportunity within the organization and across the profession for a long time. Now finance leaders and hiring managers need to address it.
“If you can start…building equal opportunity within your own function, then you don’t have to wait for the headquarters to lead,” Mitchell says. “Individual leaders within their function can take that responsibility, and it really starts with the recruitment process, making sure that you’re looking at a diverse slate of candidates and that equal opportunities are given for internal promotion opportunities from within, and that the career needs of minority staff are being met through mentoring.
“It’s not going to be solved all at once, but you can start with small steps, even within your function, and it really starts with making sure that the recruitment pipeline is diverse—you have to have a diverse slate of candidates for each open position, and the same goes for internal promotions,” Mitchell says. “On an individual basis, there’s a lot that a CFO, the head of a function, and managers can do with their own teams, and as long as those conversations are open, transparent, and honest, it’s going to work.”
Mitchell says that becoming a socially responsible company requires thoughtful discussions among leadership during the strategic planning process informed by both financial and nonfinancial ESG metrics. After leaders agree to a plan for which social issues to address and how to do so, the next step is internal communications to get employee buy-in, establishing a mission and sense of purpose across the organization.
“You don’t just say, ‘We’re going to be socially responsible’ and then do it piecemeal,” Mitchell says. “It has to be a strategy that’s embedded across the enterprise, from the board and the C-suite to middle management and individual contributors.”
ETHICAL ROAD TO PROFITABILITY
The Conference Board is careful to emphasize that prioritizing social justice and corporate citizenship isn’t just the ethical course of action but it’s also in organizations’ best interests. More investors are now seeing it as a road to profitability and long-term sustainability, not a separate ethics issue.
Mitchell acknowledges the validity of looking at these issues through an ethics lens, but it’s hard to separate that view from business imperatives without weakening the sense of urgency or motivation to act. He cites the diversity, equity, and inclusion function, which is still battling the idea that it’s an add-on that’s somehow separate from a company’s core business.
“I get a little bit concerned if you separate social justice issues and put them in an ethics bucket, because the essence of what we see from these CEOs, CFOs, and other conference participants, from our data, they tell us that it’s very much a business decision,” Mitchell says. “Yes, it’s the right thing to do, but it’s all part of doing business—this whole social justice and corporate social responsibility push shouldn’t be a separate vision from the business; it’s part of it, and one has to do the cliché ‘walk the talk’ to preserve and enhance the organization’s reputation.”