How do our CEOs and business leaders create a truly sustainable society, one where the needs of the present are met without compromising the needs of future generations?
This question sits at the core of Griffith University’s values-led MBA program and was the basis for the ground-breaking research conducted by Griffith MBA lecturers Professor Nick Barter and Dr Akihiro Ohmura which suggested a direct correlation between a CEO’s age and the climate change policies of the organisations they run.
With global sentiment studies such as the Edelman Trust Barometer (2020) indicating the trust to act on sustainability issues such as climate change lies with business leaders as opposed to governments, the decisions of CEOs appear to matter now more than ever.
Prof Barter and Dr Ohmura’s research focused on the top 166 companies which are responsible for up to 80 per cent of corporate industrial greenhouse gas emissions. Cross-referencing these CEO’s age to their corporations’ commitment to net-zero revealed the older the CEO the less likely the corporation was to have a net-zero policy.
Could it be that those who are older are less likely to care about a future they have no stake in?
While there is no desire to overreach, given the sample size and the unitary issue of climate change being explored, this research does offer warning signs to our CEOs and business leaders’ ability to create a sustainable society for future generations.
It also offers a potential solution – the forming of Future Generations Boards as part of the corporate governance framework that advises current leaders on future generations’ needs and is constituted by those 30 years younger than current leaders. Such a vehicle would at the very least enable those who will incur the future debts of climate change or other sustainability issues to have a voice on their acceptability of how decisions which might compromise their ability to meet their needs.
Although such an initiative could appear radical, there is research and emerging precedents that inform this possibility. For example, the country of Wales has embedded a Well-being Future Generations act into law and has a Future Generations commissioner (Future Generations, 2022). While the UK government has a similar bill working its way through its upper house (UK Parliament, 2022). Similarly, Finland has a Committee for the Future which reports on likely future developments and its impact on society to the country’s prime minister (Parliament of Finland, 2022). Consequently, if it is possible for governments to start formally considering the well-being of future generations, then corporations can too.
As a society we face generational challenges, and the voracity of those future challenges is impacted by the decisions of business leaders now.
Griffith University is dedicated to training extraordinary, values-driven business leaders who will lead corporations through these challenges to a more sustainable future.
For more information on Griffith University’s world-leading, values-driven MBA, visit: griffith.edu.au/mba