You’re a leader? Fine. But to whom are you responsible?

In a book I wrote fifteen years ago titled, Bad Leadership, I described seven different types of bad leadership, one of which was Insular.

Insular leadership is when the leader and at least some followers minimize or disregard the health and welfare of “the other” – that is, those outside the group or organization for which they are directly responsible.

I described among others the case of Lee Raymond, who for years was chairman and chief executive officer of Exxon, the largest energy company in the United States. But while he was leading Exxon, Raymond was also the most powerful and outspoken oil industry executive against any and all efforts to contain global warming. Additionally, he had zero compunction about cooperating with repressive regimes. As Forbes put it, Raymond was “unapologetic about making deals with regimes that lean toward the diabolical.” But … was Raymond an effective CEO – good for Exxon and everyone directly associated with it, especially stockholders? He was.

Which raises this question: To whom are leaders responsible?  Are they responsible only to those who are their obvious constituents? Or do they bear some responsibility also to a wider public? Do leaders of, say, large publicly held companies have any responsibility at all for the general welfare? Or are they accountable only to those directly in their line of sight?

The question is always important, especially this week in the United States, where because of two recent mass shootings gun violence as a political issue is front and center, again. Writing in the New York Times, Andrew Ross Sorkin took a novel approach. He wrote what was, in effect, an open letter to Doug McMillon, who is CEO of Walmart, the largest seller of guns in the United States.    

Sorkin wrote, “You, singularly, have a greater chance to use your role as the chief executive of the country’s largest retailer and largest seller of guns – with greater sway of the entire ecosystem that controls guns sales in the United States than any other individual in corporate America…. It is your moral responsibility to see that it stops.” *

I am sympathetic to Sorkin’s point. But is he right? Is it clear that McMillon is responsible to Americans generally rather than to, say, Walmart stockholders specifically? If the latter is true, then the measure of what constitutes a successful CEO must change. For decades this measure primarily has been profits and stock performance. If profits are up and the stock goes up great, no matter the fallout. If, though, profits are down and the stock goes down, the CEO is likely to be in trouble, whatever his or her other virtues. For example, when the Harvard Business Review (HBR) ranks the “best-performing CEOs” it uses this measure: “financial returns over each CEO’s entire tenure.” To be sure, HBR now also “factors in” ratings on environmental, social and governance issues. But it’s clear that financial performance is the measure that matters much the most.

So, until our assessments are line with our values, nothing much will change. Overwhelmingly private sector leaders will shy from becoming involved in public sector problems because doing so is as likely to punish as reward them.

Back to Doug McMillon. What has he done in response to the two mass murders? So far he has given the order to remove from Walmart’s shelves violent video games. So far he has not given the order to remove from Walmart’s shelves so much as one gun.

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*https://www.nytimes.com/2019/08/05/business/dealbook/walmart-guns.html   

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