LONDON – As the season in which public companies hold their annual general meetings progresses, one persistent issue is the lack of genuine dialogue between company officials and the general public. In place of robust debate and discussion among investors, executives, the workforce, and the community at large, the conversation seems to be taking place in different silos, with one group sitting around the boardroom table and another gathered at the kitchen table.
From the outside, a boardroom is all too often viewed as a kind of bubble where big decisions that influence thousands of lives are made by faceless people. They are perceived as places where big bonuses are awarded to chief executives and where horse-trading and old boy networks are more important than merit or hard work. With people outside the boardroom increasingly demanding to hold those inside it to account, opening up avenues of communication is now critical to companies’ long-term success.
An important feature of this shift will be the realization by high-profile executives that they can no longer afford to brush off criticism with the you-just-don’t-understand defense. When Jamie Dimon, CEO of JPMorgan Chase, said that he didn’t think that United States Senator Elizabeth Warren “fully understands the global banking system,” many were infuriated at the arrogant condescension of his pronouncement. His words tapped into a wider feeling that CEOs are out of touch and unwilling, or unable, to respond to tough questions with sincere answers. Even the widely respected investor Warren Buffett missed the mark when he said that Warren “would do better if she was less angry and demonized less.”
In the absence of genuine dialogue about issues like wage discrepancy, corporate social responsibility, data privacy, and a bonus culture that does not seem to provide the right incentives for hard work or to adequately penalize failure, worries and mistrust are guaranteed to fester. Lack of transparency, absence of clarity, and a paucity of answers feeds into the perception that companies are too often engaged in dodgy dealings and can’t be trusted. Worst of all, the breakdown in communication deprives those around both the boardroom and kitchen tables of the opportunity to realize that they are talking about similar problems and share similar desires to find solutions to them.