Sticking to Principles
As we cross our fingers that the cap will hold, what can we say about the over three month oil leak in the Gulf and its implications for corporate responsibility (CR)?
A simple but powerful message emerges - leadership matters. Leaders must set an authentic tone from the top, supported by example, and buttressed by the commitment to oversee the implementation of clear policies, incentives, and controls. BP's Tony Hayward, and before him John Browne, showed a contrast in leadership.
Under Browne, the emphasis was on outreach - bold media campaigns, heretical positions on climate change and transparency, and groundbreaking programs from solar energy to community engagement. The company won praise, awards, and was featured in best practice case studies.
Under Hayward, BP adopted a quieter leadership style focused - in terrible irony - on safety while still preserving the strong reputation positioning built through Browne's outreach.
The balance has not held. Browne boldly reached out, but did not create the mechanisms to create true sustainability. Hayward looked inward and hoped that an internal focus, plus the brief legacy of "Beyond Petroleum" would be enough. BP teaches us how important it is for leaders to enact the key principles of AA1000: materiality, inclusiveness, and responsiveness.
Materiality: In the wake of the disaster, Hayward's immediate action was to protect the interests of shareholders. Once the oil started to flow, material risk to the company came from how the leak affected individuals and ecosystems. In a catastrophe, what might otherwise be dismissed as PR missteps are reputation killers.
Inclusiveness: Evidence suggests Hayward did not create a culture to listen to concerns voiced by key stakeholders such as employees and partners. Other stakeholders - such as environmentalists with technical expertise -- could have helped too.
Responsiveness: Popular perception viewed Hayward, and therefore his company, as unresponsive, disconnected, and removed from the concerns of communities in the Gulf. The proof for any leader is not just whether it has identified the material issues, and not whether it has listened, but what actions it is taking in response.
Bottom line: Had the tone from the top reinforced the promises and commitments the company had made, the risks could have been mitigated and the damage to the corporation's overall reputation significantly reduced. Instead we've again learned the hard way that there are no shortcuts to responsible performance.
A simple but powerful message emerges - leadership matters. Leaders must set an authentic tone from the top, supported by example, and buttressed by the commitment to oversee the implementation of clear policies, incentives, and controls. BP's Tony Hayward, and before him John Browne, showed a contrast in leadership.
Under Browne, the emphasis was on outreach - bold media campaigns, heretical positions on climate change and transparency, and groundbreaking programs from solar energy to community engagement. The company won praise, awards, and was featured in best practice case studies.
Under Hayward, BP adopted a quieter leadership style focused - in terrible irony - on safety while still preserving the strong reputation positioning built through Browne's outreach.
The balance has not held. Browne boldly reached out, but did not create the mechanisms to create true sustainability. Hayward looked inward and hoped that an internal focus, plus the brief legacy of "Beyond Petroleum" would be enough. BP teaches us how important it is for leaders to enact the key principles of AA1000: materiality, inclusiveness, and responsiveness.
Materiality: In the wake of the disaster, Hayward's immediate action was to protect the interests of shareholders. Once the oil started to flow, material risk to the company came from how the leak affected individuals and ecosystems. In a catastrophe, what might otherwise be dismissed as PR missteps are reputation killers.
Inclusiveness: Evidence suggests Hayward did not create a culture to listen to concerns voiced by key stakeholders such as employees and partners. Other stakeholders - such as environmentalists with technical expertise -- could have helped too.
Responsiveness: Popular perception viewed Hayward, and therefore his company, as unresponsive, disconnected, and removed from the concerns of communities in the Gulf. The proof for any leader is not just whether it has identified the material issues, and not whether it has listened, but what actions it is taking in response.
Bottom line: Had the tone from the top reinforced the promises and commitments the company had made, the risks could have been mitigated and the damage to the corporation's overall reputation significantly reduced. Instead we've again learned the hard way that there are no shortcuts to responsible performance.
Accountability International
