The environment and climate change rank most highly for executives when they consider what issues will attract the most attention and shareholder value, followed by privacy and data security, according to a recent survey of more than 1,400 executives by The McKinsey Quarterly.
Of the 15 trends McKinsey queried executives about in the survey, executives viewed roughly half (eight) as opportunity rather than risks — up from just four the year prior. "The share of executives who see opportunities has grown for every single issue except job losses from offshoring; however, a few trends remain firmly entrenched as risks," notes the McKinsey October 2008 report. "They include pension and retirement benefits, health care and other benefits, and the high level of executive pay. These are wallet issues that appear negative for executives and their companies, but as noted earlier, the other societal stakeholders assign even greater importance to them. This pattern suggests mounting pressures on business leaders to confront these issues sooner rather than later."
The challenge for executives is how to manage and transform sociopolitical issues into business opportunities, as the report found that the tactics senior leaders often use to handle them don't always work. "The tactics employed most frequently — including media and public relations, lobbying regulators, advertising and marketing, speeches by the CEO, sustainability reports, and philanthropy are not necessarily viewed as most effective."
Instead, "executives see greater effectiveness from less-used tactics, such as implementing policies on ethics, engaging with NGOs [nongovernmental organizations] and other stakeholders, increasing transparency about the risks of products or processes, and changing product lines and processes. These presumably underused tactics directly affect operations or reflect an expanding contract between business and society."
