MENU

The Power of One: Leadership and Corporate Sustainability

September 18, 2018 • LEADERSHIP, SUSTAINABILITY & ETHICS, Social Impact

By Judith L. Walls

What kind of leader does it take to make a positive change? What traits set these leaders apart? In this article, the author presents their research highlighting the kind of leaders that can move companies towards a better social and environmental performance.

 

Examples of positive leadership are all around us. But we rarely see them. Instead, public interest gravitates towards CEO’s abusing their positions of power: everything from fraudulent accounting practices (Jeff Skilling at Enron) and using company money to buy basketball tickets (Aubrey McClendon at Chesapeake Energy) to throwing a second wife a $2 million birthday bash, dubbed the “Roman Orgy” (Dennis Kozlowski at Tyco). It’s no wonder then that we get hung up on the dark side of leadership.1

Yet, every day, people in powerful positions are working to make the world a better place. And their passion to do so can have long-lasting benefits to companies and society. One of the most famous examples is Ray Anderson, late CEO of carpet maker InterfaceFLOR, whose “spear in the chest” moment ignited the drive towards a company with zero negative impact on the natural environment by 2020. In Europe, CEOs are trailblazing strategies to address climate change, actively combatting it by using renewable sources of energy.2 Leaders like Paul Polman, CEO of Unilever, have even gone as far as to scrap quarterly reporting in favour of pursuing long-term goals like achieving 100% sustainable agricultural practices by 2020.3

But, what kind of leader does it take to make a positive change? What traits set these leaders apart? This is a question that my co-authors and I have been studying over the last five years, looking at the roles that CEOs and board directors play in moving companies towards better social and environmental performance. Collectively, our research shows that some individual background traits (like something as simple as having experiences in nature) matter in doing good. Other background traits hinder social and environmental progress. The good news is that research can help us identify the right kinds of leaders who can and do step up to tackle society’s toughest environmental challenges like climate change, habitat destruction, or water scarcity. 

 

Experience is Power

Our first finding is that experience is power. When we have enough experience, we attain the power that comes with being an expert. And experts are special: they can notice things others cannot, they can take advantage of unexpected opportunities, they can wade more easily through ambiguity and complexity, and they make sense of all that information to others.4,5 For this reason, experts have the ability to influence others around them. In other words, they have the power to create change.



Please login or register to continue reading... Registration is simple and it is free!

About the Author

Judith L. Walls is an Assistant Professor at Nanyang Business School (NBS) and a Faculty Affiliate at the Asian School of the Environment at NTU Singapore. She is an associate director at the Centre for Business Sustainability at NBS. Her research focusses on corporate governance and sustainability, with a particular emphasis on businesses and land use. She teaches on corporate environmental and social sustainability strategies at undergraduate and graduate levels.

References

1. Chatterjee, A. & Hambrick, D.C. (2007). It’s all about me: Narcissistic Chief Executive Officers and their effects on company strategy and performance. Administrative Science Quarterly, 52(3): 351-386.

2. “European Businesses are Acting on Renewables – The EU Must Match Their Ambition. The Climate Group,” April 19, 2018. Accessed online: https://www.theclimategroup.org/news/european-businesses-are-acting-renewables-eu-must-match-their-ambition

3. Feloni, R. (2018). “Unilever’s CEO says that in 9 years, no investor has asked him the questions he’s waiting to hear,” Business Insider US. Accessed online: https://www.businessinsider.sg/unilever-paul-polman-long-term-sustainability-diversity-2018-3/?r=US&IR=T

4. Klein, G.A. (1998). Sources of Power: How People Make Decisions. Boston, MIT Press.

5. Lines, R. (2007). Using power to install strategy: The relationship between expert power, position power, influence tactics and implementation success. Journal of Change Management, 7(2): 143-170.

6. Chawla, L. (1999). “Life paths into effective environmental action,” The Journal of Environmental Education, 31(1): 15-26.

7. Walls, J.L. & Hoffman, A.J. (2013). “Exceptional boards: Environmental experience and positive deviance from institutional norms,” Journal of Organizational Behavior, 34: 253-271.

8. Walls, J.L. & Berrone, P. (2017). “The power of one to make a difference: How informal and formal CEO power affect environmental sustainability,” Journal of Business Ethics, 145(2): 293-308.

9. Ng, E.S.Q., Walls, J.L. & Wingard, G. (2016). “Getting to the Heart of Corporate Sustainability: The Role of Managerial Values and Motivation in the Mongolian Mining Industry.” Working Paper, 10. Lewis, B.W., Walls, J.L. & Dowell, G.W.S. (2014). “Difference in degrees: CEO characteristics and firm environmental disclosure,” Strategic Management Journal, 35: 712-722.

11. Jones Christensen, L., Mackey, A. & Whetten, D. (2014). “Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors”. Academy of Management Perspectives, 28(2): 164-178.

12. DeCelles, K., DeRue, D.S., Margolis, J.D. & Ceranic. T.L. (2012). “Does power corrupt or enable? When and why power facilitates self-interested behavior,” Journal of Applied Psychology, 97(3): 681-689.

13. Kennedy, B. & Funk, C. (2016). “Many Americans are skeptical about scientific research on climate and GM foods” Pew Research Center. December 5, 2016. Accessed online: http://www.pewresearch.org/fact-tank/2016/12/05/many-americans-are-skeptical-about-scientific-research-on-climate-and-gm-foods/

14. Cameron, K., Dutton, J. & Wuinn, R.E. (2003). Positive Organizational Scholarship: Foundations for a New Discipline. Berrett-Koehler: San Francisco.

Leave a Reply

Your email address will not be published. Required fields are marked *

« »