National

In response to political ethics scandals and the #MeToo movement — both turbocharged by social and traditional media — the business world is recognizing how toxic leadership and culture can threaten a company’s image, profits and long-term survival. More “enlightened” CEOs are taking a stand on issues like immigration and more boards are holding executives accountable for ethical organizational culture. 

Why it matters: Corporate boards and executives are taking a broader view of their key stakeholders — not just the vaunted shareholder but also their employees and customers.

Companies have had to follow through on their ethical commitments in a glaring spotlight:

After Trump’s comments about the white nationalist rally in Charlottesville, Merck CEO Ken Frazier led a mass exodus from the president’s corporate advisory councils. Apple’s Tim Cook, Goldman Sachs’ Lloyd Blankfein, Unilever’s Paul Polman and other CEOs also weighed in.

The rise of the #MeToo movement in late 2017, following the Harvey Weinstein exposé, prompted a new awareness of CEOs' pervasive influence on company culture, seen also in the departure of Steve Wynn from Wynn Resorts and the subsequent restructuring of its board.

Intel, Rambus, Paramount TV, Texas Instruments and Papa John’s have all recently fired CEOs or chairmen over “code of conduct” violations, a sign that boardrooms are indeed taking these issues more seriously.

After having fired Roseanne from her hit namesake TV show in May, Disney fired the director James Gunn last weekend over years-old but recently unearthed offensive tweets, demonstrating that CEOs and boards must respond swiftly to stay in sync with their customers and public opinion.

Where it stands: Integrity programs are becoming more integrated into performance management, especially now that toxic leaders and their cultures have become too hard to keep in the shadows. Boards increasingly want reporting from C-suite officers who oversee ethics, compliance, risk and corporate responsibility. Likewise, companies are creating cross-disciplinary teams to deal with these issues and the reputation risks they pose, which have been dramatically amplified by social media.

What to watch: The hardest work will involve bringing these ethics standards and performance metrics into the political realm, by shifting the stakeholder focus from lobbyists and donors back to citizens and the national interest.

Andrea Bonime-Blanc is the founder and CEO of GEC Risk Advisory.

Amid string of scandals, businesses placing new premium on ethics

Reputation risks have been amplified in the social media age.

Photo: Anthony Weller/View Pictures/UIG via Getty Images

Business

Ethics

Expert Voices

Media

In response to political ethics scandals and the #MeToo movement — both turbocharged by social and traditional media — the business world is recognizing how toxic leadership and culture can threaten a company’s image, profits and long-term survival. More “enlightened” CEOs are taking a stand on issues like immigration and more boards are holding executives accountable for ethical organizational culture. Why it matters: Corporate boards and executives are taking a broader view of their key stakeholders — not just the vaunted shareholder but also their employees and customers.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

The U.S. stock market has seesawed in the new year, following a chaotic end to 2018 — its worst annual performance since the Great Recession and worst December performance since the Great Depression. The magnitude of recent swings suggests they are driven less by economic and market conditions than by geopolitical challenges.

Why it matters: Market actors focus, sometimes myopically, on technical indicators like “moving averages” or what the Fed will do on interest rates. But the current turbulence requires factoring in critical geopolitical trends like the rise of illiberalism in Europe, Trump administration trade policies, and China’s Belt and Road initiative.

Global geopolitical tensions are already impacting trade and business.

Russian interference in democracies like the U.S. and the U.K. is diminishing trust in election results, inflaming political rivalries, and distorting economic policy.

Protracted U.S.–China trade conflicts are straining supply chains essential to sourcing goods and services.

Unraveling negotiations in the Middle East and the regional influence of Russia, Iran and Saudi Arabia have increased the risk of a hot war and the economic harm it would bring.

The rise of illiberalism and right-wing populism across Europe is scaling back democratic checks and balances and raising the potential for corruption.

Together, these trends are eroding faith in pillars of global governance (NATO, UN, EU, WTO, and more) and social institutions, which contributes to market volatility and unpredictability.

Meanwhile, intensified polarization in the U.S. has led to standoffs like a partial government shutdown over a border wall dispute that threaten the economy and national security.

The economic power of the U.S. could decline as its debt and the associated costs mount, in the absence of effective congressional leadership.

Yes, but: In the U.S., some pillars of democracy — the federal judiciary, intelligence and law enforcement communities, a reinvigorated media, and grassroots political movements — have helped counter other risks.

The bottom line: These geopolitical trends erode trust, increase market volatility and dampen investment. If the U.S. pulls out of its current malaise, particularly after the 2020 elections, more effective governance could help correct the current course. It could also serve as an example to improve stability elsewhere, especially through international cooperation.

Andrea Bonime-Blanc is the founder and CEO of GEC Risk Advisory and author of the forthcoming book “Gloom to Boom: How Leaders Transform Risk into Resilience and Value.”

Market volatility shows strains of widespread geopolitical tensions

Protracted conflicts and poor governance are adding to global instability.

crystal ball with graph arrow going up and then down

World

Global politics

The U.S. stock market has seesawed in the new year, following a chaotic end to 2018 — its worst annual performance <a class="gtmContentClick" data-vars-link-text="since the Great Recession" data-vars-click-url="https://www.axios.com/2019-economy-2008-trump-stock-markets-7df1e216-0300-474d-a4dd-5ce031a2036e.html" data-vars-content-id="db81f33c-8eff-4fb7-a23c-efe9774bbebe" data-vars-headline="Market volatility shows strains of widespread geopolitical tensions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2019-economy-2008-trump-stock-markets-7df1e216-0300-474d-a4dd-5ce031a2036e.html" target="_self">since the Great Recession</a> and worst December performance <a class="gtmContentClick" data-vars-link-text="since the Great Depression" data-vars-click-url="https://www.axios.com/markets-on-pace-for-worst-december-in-80-years-83af4c45-fb91-4ecd-8c8c-1c643fd572ca.html" data-vars-content-id="db81f33c-8eff-4fb7-a23c-efe9774bbebe" data-vars-headline="Market volatility shows strains of widespread geopolitical tensions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/markets-on-pace-for-worst-december-in-80-years-83af4c45-fb91-4ecd-8c8c-1c643fd572ca.html" target="_self">since the Great Depression</a>. The magnitude of recent swings suggests they are driven less by economic and market conditions than by geopolitical challenges.Why it matters: Market actors focus, sometimes myopically, on technical indicators like “moving averages” or <a class="gtmContentClick" data-vars-link-text="what the Fed will do on interest rates" data-vars-click-url="https://www.ft.com/content/c3923210-03b5-11e9-9d01-cd4d49afbbe3" data-vars-content-id="db81f33c-8eff-4fb7-a23c-efe9774bbebe" data-vars-headline="Market volatility shows strains of widespread geopolitical tensions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.ft.com/content/c3923210-03b5-11e9-9d01-cd4d49afbbe3" target="_blank">what the Fed will do on interest rates</a>. But the current turbulence requires factoring in critical geopolitical trends like the rise of illiberalism in Europe, Trump administration trade policies, and China’s Belt and Road initiative.

Andrea Bonime-Blanc

Stories

Market volatility shows strains of widespread geopolitical tensions

Amid string of scandals, businesses placing new premium on ethics