In August 2019, the very influential US roundtable comprising 200 top CEOs in the country put out a very significant statement.
The headline said, "Updated Statement Moves Away from Shareholder Primacy, Includes Commitment to All Stakeholders"
The note went on to say," The Business Roundtable today announced the release of a new Statement on the Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders."
With these words, a trend that had been long in the making was formalised. Speaking on purpose is now firmly in the realm of a CEO's responsibilities.
"CEOs today exert not only the power to lead organizations but also have the responsibility to inspire purpose-driven change. In the age of relentless information, effective communication is not just about words; it's about how CEOs and organisations are aware of engaging the communications & sustainability specialists, igniting a shared sense of purpose that propels businesses and societies forward. As leaders, CEOs' commitment is to translate the organisation's vision into a compelling narrative that resonates with authenticity, making purpose not just a statement", says Aman Gupta, managing partner, SPAG FINN Partners.
The recent SEBI norms on ESG reporting means that the requirement for Indian firms to adhere to purpose will only expand, throwing the CEO into the centre of the communication cycle.
This a tough challenge for the normally social media-shy Indian CEO, who doesn't normally comment beyond the proscribed business and brand messages.
Challenges and complexities of CEO communication in India: A background
The Green Hushing Trend
Citizens all over the world, including in India, expect the CEO to have a clear idea about the purpose of their company beyond profit and communicate that effectively across all their stakeholders, beyond the shareholders.
It's easier said than done. Along with the term greenwashing, green hushing has strengthened post-COVID-driven by a specific right-wing political filter in the US. The bottom line of that viewpoint is that firstly purpose and ESG metrics actually hamper diversity and second of all, ESG investing has not proven to provide business returns.
All this makes the CEO's task of speaking authentically about purpose extremely difficult.
Diversity in India is vast, tough for CEOs to comment
The biggest challenge India's CEOs have while talking about purpose is that the diversity in India is massive. For, any Indian CEO to speak about purpose, extreme clarity is needed with regard to what issues should be commented on.
A popular choice is climate change. That is one issue that CEOs do speak about, gender inclusion also receives attention from Indian CEOs.
Even these need more support on the ground. For example, FTI's India Disclosure Index 2023
shows that Only 38 of the top 100 companies have more than 20% women employees in their workforce. Just Five companies have over 40% women employees in their workforce: Page Industries (75%) SBI Cards (52%), Interglobe (44%), Samvardhan Motherson (43%) and Infoedge (41%)
The rest they tread with caution. For example, DeI mandates in India tend to focus on gender inclusion and companies like Mahindra, Tata Group and Godrej have also pushed strongly for LGBTQAI participation.
But what of CEO communication on issues such as caste, regional and language biases and religion? Most CEOs in India are very reticent while speaking about major social issues and perhaps, rightly so.
There is no concerted campaign by India's CEOs, like one sees with the US Business Roundtable to come together to talk about societal issues, the roundtable made a strong statement against targeting immigrants during the Trump era.
There are individual exceptions Anand Mahindra who is a master class himself on how to comment on social and political issues, Harish Goenka who is very outspoken on most issues, and so is in Kiran Mazumdar Shaw.
The Shark Tank Effect: StartUp Celebrity CEOs vs Traditional CEOs and Purpose
The Silicon Valley bro culture is often blamed for the rise of celebrity CEOs, often in tech, the trend peaking with Elon Musk whose social media influence is unmatched globally.
In India, CEOs from the startup space have also certainly been more visible than their brick-and-mortar counterparts. Shark Tank India has made instant celebs of their the programme's 'sharks' even landing boAt's Aman Gupta at the Cannes Film Festival in 2023.
The typical startup CEO, used to being visible on social media may be more open to commenting widely on purpose even as the start-up sector is undergoing sharp consolidations.
Even as the Indian corporate sector grapples with the strong ESG reporting norms put in place by SEBI, CEOs may no longer have a choice in championing ESG and purpose as SEBI widens the scope of the companies that must provide credible ESG data.
The PRmoment Tracking Purpose, Tech, Digital Comms, presented by SPAG-FINN PARTNERS aims to answer questions weekly on the intersection of purpose with tech and digital communications.