I’m not one for spotting trends, but if I had to wager on the next big thing in corporate C-suite recruitment it would be for the Chief Impact Officer.
I’m still less one for coining phrases, but let’s call them “CImpO”, in order to differentiate from the various other CIO roles out there. (I’m not sure it will stick, though.)
Currently, scans of Google, LinkedIn and job sites reveal very few CImpO roles, and a “Chief Impact Officer” LinkedIn group with a membership of only three people.
I suspect that will change fast now, particularly in light of the new Statement of the Purpose of a Corporation from Business Roundtable – a CImpO will be a key guardian of stakeholder interests.
Here’s what I think, after time spent myself as a freelance CImpO, the brief might include:
- To oversee the measurement, verification, management, reporting and improvement of the company’s social and environmental impact (its value delivered to stakeholders);
- To advise the board on business model and operational risks arising from areas of impact underperformance and developments in the understanding of social and environmental impact;
- To contribute to the strategic and operational development of the business by identifying and promoting innovation that mitigates impact risks and opens up new commercial opportunities;
- To ensure that all stakeholder relationships (workers, suppliers, community and environment) are managed consistently with the company’s impact vision and values;
- To report on and discuss at each board meeting progress against agreed key environmental, social and governance metrics;
- To oversee the production and publication of an annual impact report which will be made public as soon as practicable after year end and filed as part of the company’s strategic report thereafter.
I suspect that sort of role is currently filled, if at all, by a Chief Sustainability Officer, Human Resources Director, Company Secretary and/or General Counsel or even CEO.
Here are some of the reasons I can imagine a dedicated role being necessary:
- Sustainability is no longer enough – it’s not aspirational enough and implies maintenance of steady state, rather than growth and development. That’s not a bad starting point if what came before was deeply unsustainable, but it’s not going to feed a growing population or excite an investor. It also sounds too restricted to the environmental domain – important but only part of the equation. Furthermore, businesses are now alive to the fact that doing good in the world isn’t the sole preserve of the third sector. The B Corp community is full of examples of companies using the for-profit model to deliver, often, multiple impact returns alongside financial profits. This is a big job: these opportunities need to be coordinated strategically, at the right level, with the right investment and for the right reasons.
- Impact is undoubtedly a board issue – unmanaged negative impacts, and the financial and brand risks they entail, will negatively affect shareholder and stakeholder value. Conversely, but in exactly the same way, the opportunities of innovating to create positive impact will create positive value. Impact has to form part of every strategic planning discussion, as well as having a meaningful place in governance systems, processes and structures.
- Funders will expect it – looking at Larry Fink’s latest letter to CEOs on this topic as well as the rapid divestment by various funds in recent months from non-renewable energy stocks, the investors (and indeed banks) of the future will need to be persuaded that every company has robust social and environmental impact strategies in place. Over time, it may become a pre-requisite for access to capital, but it will not be straightforward to get right.
In the investor community, impact has been moving out of its bubble and into the mainstream for 12 months or more. The Business Roundtable statement makes it clear that the corporate community is following close behind.
Getting impact right is a topic of increasing relevance to all businesses and those who don’t think it applies to them could, before too long, be in for a nasty shock.
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