BUSINESS BRIEFING
All the latest updates from across AMBA’s global network
Included in our latest selection of updates is a report on how boards rate company leaders’ ability to handle today’s business challenges, an index on artificial intelligence that identifies the world’s leading firms, an experiment designed to encourage consumers to opt for dishes with a lower carbon footprint and research on how a CEO’s political preferences influence company policy. By Tim Banerjee Dhoul and Ellen Buchan
HOW POLITICAL PERSPECTIVES IMPACT COMPANY SUSTAINABILITY POLICIES
SCHOOL : University of St Gallen COUNTRY : Switzerland
At the start of November, people around the world anxiously awaited the results of the US presidential election because they recognised that its outcome would inevitably have ripple effects felt far beyond the country’s borders, influencing economies, policies and global relationships. The leanings of a country’s leadership will be representative of the country’s ensuing political outlook and actions, but can the same be said for organisations? Does the political stance of an organisation’s CEO, in particular, impact that company’s policies? This is what new research from the University of St Gallen has investigated. Specifically, it explored how a CEO’s political preferences might influence decisions taken around sustainability. The findings reveal that left-leaning CEOs tend to drive more green new product introductions in their companies; in other words, products that have been developed to reduce environmental impact.
While this aligns with what most people would expect, the study delved deeper to demonstrate that a CEO’s political leaning will have more of an impact in adverse business conditions. There is also more of a difference between the actions of left and right-leaning CEOs when there is little public interest in their company’s sustainability policies. However, if a company is under scrutiny, or has been accused of greenwashing, political ideology will have less of an impact because decisions are much more likely to be driven by a need to address public concerns and maintain the organisation’s reputation. The research highlights that the implementation of sustainable practices is not directed purely by economic rationality and that much depends on business leaders and their willingness to promote this transition. Entitled Red, blue and green? The association between CEOs’ political ideologies and green new product introductions , the study was published in the Journal of Product Innovation Management . EB
8 | Ambition | DECEMBER 2024
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