After their podcast interview in December, our Executive Director Frederik Otto spoke to Alison Taylor again. This time the discussion focused on risk, opportunities, public relations, and diversity & inclusion.
Alison is a clinical associate professor at NYU Stern School of Business, and the executive director at Ethical Systems. She is an outspoken sceptic of strategic communications and public relations on societal issues. Alison is concerned about the overwhelming focus on public commitments at the expense of actually getting things done on sustainability.
Let’s look at the 2024 World Economic Forum in Davos that just concluded. This year’s theme was ‘Rebuilding Trust’. Where do you stand on the notion of trust?
Trust is very difficult to define, and academics don't really agree what it is. There is an overall tendency to equate trust with reputational risk management, with attractive messaging, with forms of public relations (PR) designed to appeal to stakeholders. My biggest concern about trust is the way that it is commonly misused by the media and by the PR industry. Trust in reality includes an expectation of reciprocity, the idea that there is a mutuality, a relationship. The way that trust is commonly used is more about messaging and more about treating stakeholders as passive recipients of information, which in turn prioritises putting out attractive messages solely to protect brand value.
We're clearly in a very, very low trust environment as the WEF has pointed out in their own Global Risk Report, outlining the risk of misinformation and disinformation in undermining trust. So, I think we're having a problematic conversation. We’ve allowed the strategic communications industry to take over the concept of trust. And I think we need to do some work to reclaim what it actually means.
Several risk forecasts came out this month. What are the key risks for business in 2024 in your opinion, and which do you expect businesses to prepare most for?
It depends where you are, but I think geopolitical turmoil is a huge issue in 2024, and two thirds of the world's population are going to the polls. Businesses will have to navigate their involvement in political influence, corporate political responsibility, responsible tax, corruption. I think those are some of the biggest issues.
This obviously speaks to what businesses are and aren’t doing on questions of climate policy, inequality, and social impact more broadly.
What should the scope be of businesses taking a stance on politics or societal issues?
I think that businesses need to be much more cautious about taking a stance. The notion of corporations “speaking up” implies that we're again treating all these issues as PR issues. I would suggest that companies limit their public stances to issues that they can influence. I would suggest that businesses are much more restrained and cautious and honest about the degree to which they are profit making entities, and what pressing societal challenges they can really solve.
What are the opportunities for sustainable business in 2024 broadly?
I think there is finally a chance to reshape the narrative, to get substance behind sustainability commitments. To be much sharper about whether those commitments are opportunities, risk management, or managing negative impacts. I think there is an opportunity to be more restrained and honest and thoughtful about the kind of positions you take.
There is an opportunity to engage in a much more transparent, honest, and thoughtful way with the political and policy making process. I think those businesses will be in a stronger position from businesses that continue to overpromise and treat all these topics as PR.
One opportunity and potentially a risk is diversity, equity - or equality - and inclusion (DE&I). Particularly in the US we see a backlash similar to ESG. What are your thoughts on the current developments?
It's certainly related to the backlash on ESG. I could answer this in a very specific US context, whereas we know the Supreme Court has reversed its position on affirmative action. I think a lot of members of the right wing are seeing a lot of opportunity here to frame DE&I as a problem. I think there is quite some ground for arguing that the way DE&I has been implemented in American corporations is legalistic, is focused on “protected classes” and has done more harm than good.
We have ended up with an overwhelming focus on social identity. What I hear in the classroom that these legalistic, tick box approaches may be affecting women and people of colour negatively and increasing internal divisions. So, there's plenty to criticise about the scope and range of DE&I efforts.
I would not want those comments to be understood as thinking that there isn't a very real problem to solve. I would really challenge everybody that is currently attacking DE&I to explain what their proposal is for changing the reality. Leadership positions in business, in government, in the media, any sector that you can think of is still dominated by white middle aged men. Hence, everybody criticising DE&I needs to explain what they're going to do to address that issue.
What are the positions that CEOs or boards should take on these issues?
I think what we need to do is to focus on the actual benefits of diversity, which are better risk management, better decision making, a broader range of perspectives, more creativity, better conversations. We certainly need to do work to elevate people that have been marginalised. My students want to see people in senior leadership that look like them and their friends.
We need to do a lot of work on what kind of behaviours get rewarded. We need to work on the pipeline, how we retain and motivate workers. Overall, we need to do a lot of work on psychological safety and speaking up and making people feel comfortable to share their ideas in an organisational setting.
Finally, talk to us about your new book coming out very soon.
It's called Higher Ground - How Business Can Do the Right Thing in a Turbulent World. I intent to answer all the difficult ethical dilemmas facing global corporations today, and I aim to be controversial. I would love it if your audience would read it, download it, and debate me on it.