However, the social climate of recent years and the public responses of companies suggest a major turn in the tide.
A recent and highly indicative example of this is the strategic makeover of the American association, Business Roundtable. An alliance of America’s top CEOs, Business Roundtable has existed to discuss issues of public policy. Previously, as CEOs, they openly prioritised their duty to shareholders.
Recently, however, this purpose has been completely overturned in a reworked mission statement which prioritises ‘expanded opportunity for all Americans’. Even the images on their ‘About Us’ page now boast statistics surrounding their provision of employment, healthcare and retirement benefits, charity contributions and research and development investments. Almost concealed at the bottom of the list are the dividends generated for shareholders. If this list in itself is a symbol of the list of priorities on the minds of the world’s top CEOs, it suggests a major reconstruction of the business sphere.
The social license has become a necessity when operating among modern markets. When considering what the motivator of these emerging ethical efforts may be, it is hard to overlook the generation which will soon represent the largest demographic in the workplace, is the dominant voice in media and is growing increasingly loud in defence of the greater good.
The growing demand for ethical integrity has corresponded with the growth in both age and prevalence of the Millennial demographic. As the largest generation in history, this group is not one you can afford to ignore.
Born into the age of advertising, Millennials are no strangers to the ploys of marketers. Suspicion and skepticism are second nature to this group, bolstered by the transparency provided by social media. Behind every flashy ad and catchy slogan, the Millennial knows, is a company with probably questionable ethics, run by a rich guy who is getting richer by the minute. Scrolling past the ads and ignoring the slogans comes naturally. According to the Harvard University Institute of Politics, 86% of Millennials distrust financial institutions and 88% of this younger generation distrust the media. They have been trained to mistrust.
Beyond this, a key characteristic of Millennials is the internal need to make an impact, and where they spend their money is a crucial way they will express this. 60% of Millennials will consider a brand’s reputation and social credibility when choosing who they buy from or work for. Whether or not the flashy slogan is effective, for them, it is superfluous if the company is upheld by integrity, transparency and respectable ethics. In fact, a staggering 92% of Millennials believe that business success should be not be measured primarily by profit. It is here that this radical overthrow of the shareholder priority of Business Roundtable becomes less surprising. When the market is dominated by a group who prioritises corporate social responsibility, it is likely that businesses will follow. Or, at least, it should be, if these businesses want to hold onto relevance at all.
The capitalist age that Millennials were born into, in their eyes, has given them nothing more than a great divide between rich and poor, an extreme dichotomy in politics and a climate crisis. Job security, the minimum wage and potential employment are huge points of personal concern for this group. One of the movers and shakers of this new direction of Business Roundtable, Johnson & Johnson CEO, Alex Gorsky stated, ‘People are asking fundamental questions about how well capitalism is serving society.’
I think the key word here is ‘serving’. A social license is really just an expression of the quality Millennials are so desperate to see in companies: a purpose centred around service. The revived mission of Business Roundtable exhibits just this, promoting ‘an economy that serves all Americans.’
This democratic, inclusive and empowering approach to marketing may be exactly what the corporate world needs in order to grab and hold the attention of its most indispensable market. The current front cover of Fortune magazine says it best in summarising the line businesses must walk in the modern age. Across a photo of the three key leaders in this Business Roundtable transformation poses the question, ‘Profits or Purpose: Can big businesses have it both ways?’ Chong, K 2017, ‘Millennials and the rising demand for corporate social responsibility’, BerkleyHaas, 2 September  Murray, A 2019, ‘America’s CEOs seek a new purpose for the corporation’, Fortune, 2 September  2019, ‘About Us’, Business Roundtable, 2 September  2016, ‘Millennials, Mobiles & Money’, Telstra Corporation.  Chong, K 2017, ‘Millennials and the rising demand for corporate social responsibility’, BerkleyHaas, 2 September  Botsman, R. 2018, Who Can You Trust?, Penguin Business, London, p. 41.  Tredgold, G. 2016, ‘29 Surprising Facts That Explain Why Millennials See the World Differently’, Inc, 2 May.  Murray, A 2019, ‘America’s CEOs seek a new purpose for the corporation’, Fortune, 2 September  2019, ‘Business Roundtable redefines the purpose of a corporation to promote ‘an economy that serves all Americans’’, Business Roundtable, 2 September