The first implication of the new leadership paradigm is that business leaders need to understand that behaviours that compromise the future of our global society will no longer be tolerated. Business is becoming a wholly owned subsidiary of society, both figuratively and literally—after the global meltdown in September 2008, 75 percent of the banking system in the United Kingdom was placed under the custodianship of the UK Government. Why? Because the leaders of the banking sector of Britain could not be trusted: they were either incompetent or excessively greedy.
The BP Gulf disaster represents another milestone moment in our collective recognition of the need for accountable business practices. Companies that fail to recognise the importance of environmental protection will pay a heavy price if they continue to ignore their societal responsibilities. The new leadership paradigm calls for a new breed of business and political leaders who can rise above their self-interest and work towards the good of the whole.
Business leaders are increasingly being asked to work with their competitors and political leaders to define a framework of policies that support the evolution of our global society by developing industry charters that regulate the rules of competition between companies in a way that supports the societal common good. The Caux Principles and the Earth Charter provide good starting points for this discussion.
I share the sentiments of Tex Gunning, President of Unilever Bestfoods Asia. He puts it this way:
The paradigm that divides the world into the social sector, the private sector, and the governmental sector is not working. It creates artificial barriers. We are each a constituent of the problem, so we have to combine our forces, our efforts, and our competencies.
Chapter 1: Introduction (The Societal Imperative)