Read the case study and answer the following questions. CEOs as Leaders and Corporate Social Responsibility Managers who talk about what state the planet might be in when their grandchildren grow up fall into the first camp its the right thing to do. This is a good place to start, but unless its translated into business outcomes it wont get much traction particularly with the Chief Financial Officer whose support is critical in getting a budget allocation. The big international traded oil and gas companies like Exxon Mobile and British Petroleum have elaborated Corporate Social Responsibility (CSR) programs because they know that they attract the best graduates. They probably fall into the second camp its good for business. We say probably because they dont say much publicly about having a responsibility to do this anyway and still havent figured out a way to account for the outcomes of their CSR programs. Companies who make the most progress towards CSR have leaders who believe that the right thing to do is good for business. There are three key factors influencing the degree to which big banks like Exxon Mobile integrates CSR and all three are about leadership: 1. The strength of commitment and leadership qualities of the CEO If CSR initiatives are to succeed, the CEO must believe it is the right thing to do and that business should do the right thing. The CEO of Exxon Mobile Darren Woods realized that he needs to have the foresight and courage to see that doing the right thing is good for the corporation. His moral conviction must be strong enough to convince others to follow. (Most employees at Exxon Mobile will want to follow a sustainable path if that is where they are led. Being part of a team which is taking a CSR path will be a source of great satisfaction to many.) Mr. Woods has an important role to play in ensuring that the management structures and governance processes are in place and the leadership styles (transactional and laissez-faire leadership styles), of the executive team are conducive to integrating CSR. 2. The level of the Boards understanding of the relevance of sustainability to strategy and risk The Board members of Exxon Mobile set the strategic direction of the corporation. If the Board doesnt recognize the importance of staff, customers, communities or risks associated with the limitations of natural resources and the impact of pollution, change will be limited. An understanding of these issues on the business model, long term success and ability to deliver on strategy are critical. So, too is an appreciation that identifying sustainability risks requires stakeholder engagement. The Board has an important role to play in holding the CEO to account which in turn makes it easier for the CEO to hold senior executives to account. The Boards Remuneration Committee could chose to seek CSR performance data to inform its deliberations. Board diversity, including, but not only gender diversity, becomes really important in ensuring the board is fit to drive change towards CSR. Common sense dictates and research has shown that women on boards increase the CSR focus along with profits. Similarly, a boardroom full of accountants brought up to think about financial returns above all else, and with little or no CSR. 3. A senior leader with the expertise, leadership skills and authority to make it happen A committed, proactive executive (Mr. Woods) will be needed to make change happen. They will need to be knowledgeable about CSR issues, processes, performance management and communication. If organisations are to change in time to avoid negative (social, environmental and business) consequences, this person needs to be senior enough to have authority. They need to have the ear of the CEO. Moral authority and leadership skills like problem solving skills are important, but not enough for the scale of change required. The challenges Competent, committed business leaders will face significant challenges: Solving CSR problems requires working across functions. This can only happen if the senior team have collaborative leadership styles. Organisations with clear functional boundaries and hierarchical structures may not have the desirable degree of cross-functional and informal communication channels needed to make CSR change works. Collaborative leadership style at Exxon Mobile enabled the corporation to change its organizational culture to be supportive for CSR. Indeed, all leadership styles followed by Exxon Mobile (transactional, laissez-faire, and collaborative leadership styles) affected the organizational culture positively and backed CSR plans. Encountering inertia and resistance stemming from lack of know-how and already full workloads. In this situation, people focus on what is in their job description and on performance which is assessed. Support and leadership from the Human Resources team will be needed to get CSR incorporated into job descriptions and performance review practices. Difficulty influencing the decision makers and getting CSR into strategy. Help will be needed from the finance team to develop a business case for sustainability initiatives. Getting agreement on Key Performance Indicators and targets and getting CSR incorporated into plans. Working with marketing and communications people to ensure that CSR messages are consistent, prioritised, accurate and above all, not greenwash. Developing stakeholder engagement processes to identify material issues and risk. Solving these challenges requires corporate leaders who are guided by a sense of what is right. We need self-aware senior executives with collaborative leadership styles working in a culture, which allows for critical reflection. Q1: This question has four parts: (a) If you were Mr. Woods as a CEO of Exxon Mobile, How would you apply leadership to enhance CSR? (CLO2, K2, 2 marks) (b) Analyze the role of leadership in CSR based on problem solving skills and social judgement skills. (CLO2, S3, 2 marks) (c) Analyze the role of leadership in CSR from analytical skills perspective. (CLO2, S4, 4 Marks) (d) Assume that Exxon Mobile is a corporation in the Gulf Region where social and cultural insights are different; analyze the role of leadership in CSR based on this assumption. (CLO2, CAR8, 2 marks).