UVA Darden Leadership Communication Council Explores Business Roundtable Statement on Purpose of Business

When CEOs from companies such as The Coca-Cola Company, UPS and The Home Depot signed on to the Business Roundtable’s updated “Statement on the Purpose of a Corporation,” they did so not to be revolutionaries throwing off the yoke of shareholder primacy but because their companies were already committed to a broader service to all stakeholders.

In essence, many companies supported a new Business Roundtable statement that represented the values their corporations were already living, according to Katrina Blauvelt of The Home Depot, Dean Foust of UPS and Rocky Rief of Coca-Cola — three corporate communicators serving as panelists at the University of Virginia Darden School of Business’ annual Leadership Communication Council (LCC) meeting.

Indeed, the statement reflects the seminal work on stakeholder management led by Darden Professor Ed Freeman and colleagues over several decades.

“For us, it was an easy thing to sign,” Blauvelt said. “We are already taking a stakeholder approach and trying to be more public about what we’re already doing. The letter was aligned with our values, and our CEO felt it was the right thing to do.”

“If anything, I thought there was an overreaction to the Business Roundtable statement by the media and others,” said Rief. “For many of us, we felt the statement was just catching up to reflect its membership’s views.”

However, Foust pointed to the broad membership of the roundtable and suggested the statement was likely still progressive for many of the co-signing companies, which might still operate with a primarily shareholder value approach but “see the societal trends.”

“It remains to be seen how much companies will be willing to do and how much they will be willing to change,” Foust said. “There are a lot of questions about how much this was for show versus how much they are going to do.”

To the 60-plus communicators in attendance at the LCC summit, a strong reaction to the statement in the media and society was a surprise. A statement that was intended to present a common-sense portrait of the multifaceted role of a corporation in 2019 instead drew attacks ranging from accusations of creeping socialism on one side to mocking skepticism on the other.

The communications professionals in the room represented roughly 50 companies and agencies, bringing countless experiences with highly publicized messaging successes and failures. To the council, what happened was clear: “Within hours, the Business Roundtable completely lost the thread of the narrative,” said Jeremiah McWilliams, director of employee communications at North Highland, a change and transformation consultancy.

Tim Beecher, who recently retired as a senior partner from FleishmanHillard and served as moderator of the LCC panel, said the lost narrative might have been avoided had the Business Roundtable more clearly established three things:

1. “Why this?”
2. “Why now?” (“There is no such thing as a nice surprise,” Beecher said.)
3. That businesses should balance all stakeholder interests equally. The statement was interpreted by many in the media as demoting shareholder interests.

Examining the Intersection of Media and Business

Managing editors Angela Greiling Keane of POLITICO and Jenny Paurys of S&P Global Market Intelligence joined communicators McWilliams and Benjamin West of France’s The Experimental Group on another panel examining the challenges of managing corporate reputations in a fast-paced, ever changing media environment.

Among the journalists and communicators, the panelists lamented the erosion of relationships and trust between the two sides. While LCC members speculated at the causes — everything from increasing demands on time for all parties, higher rates of turnover among journalists at reputable media outlets or a general souring on interactions with the media due to a proliferation of nontraditional media outlets with weaker ethical standards — the group generally agreed that the fallout has been a weaker voice for corporations in news coverage.

“A lot of companies have decided the risk is not worth it so they have opted out of participating with the media,” Paurys said. “But we know it doesn’t work that way. Coverage is going to happen and it can be worse for you. There is a perception that the news media has fallen prey to a lot of bias issues, and some of that is true. When you combine that with the fear of risk, that’s where we’re seeing tension that is increasingly obvious.”

So how can a corporation navigate the new media landscape?

LCC members did not suggest abandoning media relationships. Rather, they advised coaching executive teams on realistic expectations — that fully controlling the narrative and ensuring positive coverage was impossible but that establishing a position as a respected, credible voice in the conversation was key.

For more controlled mediums, members of the group agreed that the age of digital communication had broken down the walls between corporations and consumers, meaning corporate content aimed directly at consumers through social media, blogs and other digital channels were now a key part of the communications toolkit.

What Communication Skills Matter to an MBA?

Management Communication is one of several academic areas at Darden and part of the core First Year education experience for MBA students. However, communications is not as highly correlated with MBAs as skills such as finance or quantitative analysis.

Professors Brian Moriarty and June West debunked the myth that communications is in some way a less important skill for MBAs.

Moriarty, in fact, presented research showing that communications skills — from oral communication to written communication to presenting — all rank among the most highly sought and hardest-to-find traits in job candidates.

LCC members discussed the need for communicators and educators to rebrand their profession and skillset, noting that communication is really an art of influence and that no change or strategic imperative can be achieved without effective communication.

The LCC serves to advise the Darden School in its aim to provide the best management communication program in the world.