One World’s 4th Annual Innovations in Corporate Social Impact is coming up on October 30th. As we get ready for the event, we’re scanning the Bay Area social impact landscape and gaining insights from experts in our network.
We chatted with Bernadette Clavier, Director of the Center for Social Innovation at the Stanford Graduate School of Business, to get her take on the role students, business schools and companies play in the growing field of corporate social impact.
How does The Stanford Graduate School of Business expose its students to the core concepts around corporate social impact?
GSB students all take an ethics course that examines the trade-offs inherent to most business decisions. Our flagship entrepreneurship class, StartUp Garage, invites students to systematically examine the impact of their entrepreneurial projects on people, the planet, and society. Students are guided to identify areas of risks, develop mitigation plans, and think about ways their operations can create additional value to their stakeholders. The GSB also offers a myriad of electives for students to explore social issues, ways to design and measure impact, and the specifics of running impact driven organizations.
MBA students seem to be quite interested in corporate social impact, what is driving their interest?
Millennials are notorious for their focus on purpose and meaning in all areas of their lives. Their future prospects aren’t exactly looking as hopeful as what their parents experienced. Generational social mobility is under threat, if not a thing of the past. The planet is in danger. As students of business, MBAs are both eager to use their business tool kit for social change and ready to examine the foundations of the system they are a part of. Stanford GSB students are driving an ongoing discussion about the challenges of capitalism. They are organized in a “Corporations and Society Initiative” (CASI). They regularly raise questions about the role of business in society in the classroom, and put on student workshops and speaker events. A third of the class comes in with the explicit goal to explore social impact. Some of them will even launch their own social enterprise.
What professional opportunities are available for those entering the workforce after an MBA program in the corporate social impact arena?
Because the world of corporate impact is still mostly organized around corporate foundations and CSR offices, roles specializing in this area are few and far between. However, there’s room for a lot of corporate intrapreneurs to change the way business is done and harvest opportunities for corporations to add value to society in addition to shareholders. Social entrepreneurs may also help the corporate world to adopt models for impact through B to B services.
How do senior leaders in the Stanford network view corporate social impact?
Questions of business and society are coming in sharp focus for senior corporate leaders in the Stanford community and elsewhere. The level of inequalities in the US today brings us back to issues of the Gilded Age. Trust in business is low and declining. Populism is rising. The license of business to operate is threatened and has become important to protect. Corporate social responsibility approaches that attempt to fix issues generated by the core business are no longer credible. Stanford GSB leaders today are working to redefine corporate leadership. Please reach out if you are interested in joining current efforts.
What will help companies drive more social impact? (For example, additional senior leadership support, other?)
As bizarre as it may sound, CEOs need permission to provide value to society. The Business Roundtable’s new definition of the purpose of corporations provides them with a mandate to think beyond quarterly reports and serve a broader set of stakeholders. Financial markets provide the ultimate test of whether or not that permission is real. There are signs that markets are willing to reward sustainable behaviors. For example, in their 2016 Sustainability & Innovation Global Executive Study & Research Project, MIT & BCG indicate that nearly half of investors say that they won’t invest in a company with a record of poor sustainability performance. However, short-termism is still in the way and new capital market models need to emerge.
Permission won’t suffice unless corporations and their CEOs are protected against the ruthless enforcement of shareholder interests when those directly conflict with the interests of society. Good regulation should set the rules of the game in a way that promotes corporate social impact. The example provided by the current opioid crisis is a textbook example for this. Stronger regulation would have protected patients from addiction. It would have allowed the pharmaceutical companies involved to direct their marketing efforts toward the medical cases that truly needed the extended release opioid drugs, thereby providing tremendous positive impact on those lives through their core business. We need guardrails that allow businesses to express their best selves.
Business should routinely deliver positive social value. Nothing less than profound changes to the capitalist system are needed for this to become a reality.