Corporate Executives See the Writing on the Wall

Corporate executives have come to accept that greater government regulation is likely. Some embrace it because they believe it is right. Others, like a boxer facing off against a punishing opponent, would rather embrace it than be socked by it.

A national survey last month of senior executives by the Chicago-based accounting firm Grant Thornton LLP, found both (1) strong support (by 72 percent of respondents) for more environmental regulation of companies, and (2) strong expectation (by 70 percent of respondents) that this regulation will happen within the next five years. More than half of the respondents, 56 percent, supported more workplace regulation (human rights and labor practices), but a smaller percentage expect it to happen. Only 35 percent believe the government should regulate companies regarding their impact on the communities in which they operate.

Of the respondents, 68 percent also expect more environmental responsibility reporting requirements in the next five years, while 35 percent believe the same will be true for social responsibility (workplace) reporting. Only 29 percent currently produce some kind of corporate responsibility report and more than half (55 percent) say they have no plans to produce such a report, despite believing such reports will in time be required!

These results suggest that corporate executives are acutely aware of the context within which they work and favor government intervention in certain areas. The views revealed by the survey may reflect the reality that environmental issues are very much in the forefront of political debate and that a consensus is building for a more active stance for the government. Jim Maurer, Managing Partner of Grant Thornton's Consumer and Industrial Products practice, says that if there is to be more regulation, most executives "want to be sitting at the table deciding what the parameters of that regulation should be."

A different survey, of UK opinion leaders, by Chatsworth Communications was reported last month by Edie as concluding that one-fourth of respondents believe companies pursue green policies to protect their reputation, with one-fifth saying these initiatives result from consumer pressure and good business sense. Only 1 percent said they believed genuine concern for the environment was the main motivation for companies becoming more environmentally friendly. Although Brits tend to be more sceptical and critical of corporations than Americans, it's clear why corporate executives on either side of the Atlantic might believe more regulation is on its way.