The world’s top academics, politicians, business, youth, and civil society leaders came together at Davos last week to engage in addressing the most pressing issues on the global agenda.
This year’s Davos Agenda was one like no other and marked the launch of the World Economic Forum’s “Great Reset Initiative”.
With many leaders joining virtually, the event captured the mood of the world today, focusing on seven key themes – How to Save the Planet, Fairer Economies, Tech for Good, Society and Future of Work, Better Business, Healthy Futures and Beyond Geopolitics.
There were many discussions of relevancy for corporate affairs professionals and the future of the discipline. I’m pleased to share some of our observations:
As the World Economic Forum stated “the COVID-19 pandemic has demonstrated that no institution or individual alone can address the economic, environmental, social and technological challenges of our complex, interdependent world. The pandemic has accelerated systemic changes that were apparent before its inception. The fault lines that emerged in 2020 now appear as critical crossroads in 2021. The time to rebuild trust and to make crucial choices is fast approaching as the need to reset priorities and the urgency to reform systems grow stronger around the world”.
On the positive side, for corporate affairs professionals, the pandemic has accelerated trends that have been a long time coming – the digitisation of workplaces and the platform economy, the expansion of remote and flexible work, and virtual education.
A ‘skills revolution’ is key to the future
Speaking at the Agenda’s 'Skilling the Global Workforce' panel, CEO of Adecco Group, Alain Dehaze emphasised the importance of lifelong learning and called on a “tripartite approach” to promote upskilling and reskilling on a global level.
Alain insists we need a “skills revolution”, because 85% of all jobs in 2030 have not been invented yet.
“The ongoing disruption to labour markets from the Fourth Industrial Revolution has been further complicated – and in some cases accelerated – by the onset of the pandemic-related recession of 2020,” said the Future of Jobs Report 2020.
Liz Hilton Segel, Managing Partner of McKinsey in North America attended The Davos Agenda, and in her reflections on the important changes business leaders are making to emerge stronger from the challenges of the past year, she highlighted their efforts in “reskilling and retraining employees to meet the shifting needs of consumers to fostering a more flexible, empathetic, and connected workforce in our hybrid work world. Elsewhere, conversations covered the new social contract of business and the importance of collaboration at a local level to make a difference,” she said.
The World Economic Forum believes the current moment provides an opportunity for leaders in business, government, and public policy to “focus common efforts on improving the access and delivery of reskilling and upskilling, motivating re-deployment and re-employment, as well as signalling the market value of learning that can be delivered through education technology at scale”.
The ongoing impact of Artificial Intelligence (AI)
As we shared last year, people both love and fear AI, and it remained a key focus of this year’s discussions. The World Economic Forum’s Future of Jobs Report 2020 says that many businesses plan to reduce their workforce as a result of technology integration.
Vilas Dhar, president of the Patrick J. McGovern Foundation, said that AI holds the promise of making organizations 40 percent more efficient by 2035. “The end goal is to create an artificial-intelligence-enabled society,” said Dhar, with AI being used to create genuine equality. (McKinsey 2021)
“Individuals, employers, and governments must engage together to support skilling efforts,” said Alain Dehaze, CEO of Adecco Group. “You need to stay relevant, as an individual and as a company,” he added.
The amount of technological, demographic and socio-economic change taking place means most professional roles are witnessing some transformation. Roles that didn’t demand an understanding of AI now do and positions that weren’t tasked with data analytics now often are.
For corporate affairs professionals, the future calls for new skills and knowledge. We’re at a ‘tipping point’ in the momentum toward sustainability (Kerrigan and Kulasooriya, 2020). The key to ensuring relevancy in the future, is embracing new skills or knowledge that help us not only survive, but ideally thrive into the future.
Investing in our people
McKinsey’s Liz Hilton Segel said she witnessed louder and with a greater urgency throughout discussions, the case for investing in people.
From a workforce perspective, she suggests “supporting the wellbeing of employees is no longer an advantage, but rather a requirement to ensure the long-term resilience and growth of global businesses and economies”.
A Forum white paper explained, “The disruptions created by the pandemic – such as the large-scale shift to remote working – have demanded new approaches to the employee experience, engagement and motivation, from the onboarding of new talent onward”.
The challenge for corporate affairs leaders now will be how to maintain this level of support and engagement as the pandemic continues.
As one corporate affairs leader perfectly put it last year, “corporate affairs ran into the fire” during the pandemic so to speak. The intensity by which professionals have continued to operate at over such a long period of time is becoming unstainable, particularly in the absence of additional resources. Resilience has been a significant issue for many functions and focus remains on how to support professionals to “come off the tools” and recharge.
Diversity, equity and inclusion
The pandemic, according to the Forum, has created and accelerated inequality in the workplace and beyond, and business leaders have a responsibility to make better choices on inclusive growth, green growth, and strong interconnections globally.
Building back better must ensure society and the future of work are sustainable and inclusive.
“For too long, diversity and inclusion has been presented as a challenge to be ‘solved’,” said Forum Global Shaper George Burton of the Edinburgh Hub. “Looking beyond the doom and gloom, we can envisage a world in which diversity is the solution to the world's most pressing problems – from climate change to COVID-19,” Burton added. (McKinsey 2021)
Corporate affairs professionals will play a increasing role in building back better, particularly in assessing social risks for brands and corporations as pressure mounts for more disclosures and accountability involving diversity and inclusion. As we well know, what used to be considered non-financial assets are now material risks to brands and companies.
Gender parity is at the heart of the recovery
“The pandemic has created a “double-double shift” of at least 20 hours per week of additional work for women at home and is potentially deepening existing gender gaps.” (McKinsey 2021)
In fact, the International Labour Organisation has warned that the pandemic threatened to wipe out “modest progress” on workplace equality in recent decades.
“In a crisis time, you need the most creative ideas and the most differing experiences and perspectives, which is obviously what diversity provides. So, particularly companies need to be ever-vigilant in that they don’t skimp in their focus around diversity,” warned Laura Liswood, Secretary General of the Counsel of Women World Leaders.
Stakeholder capitalism
A year ago the World Economic Forum launched a new ‘Davos Manifesto’ in support of stakeholder capitalism, which says companies should “pay their fair share of taxes, show zero tolerance for corruption, uphold human rights throughout their global supply chains and advocate for a competitive level playing field”.
Klaus Schwab, Founder and Executive Chairman of the World Economic Forum cautioned last year, “We should not do away with the basic engines of growth. We owe most of the social progress of the past to entrepreneurship and to the capacity to create wealth by taking risks and pursuing innovative new business models. “But we must rethink what we mean by ‘capital’ in its many iterations, whether financial, environmental, social, or human. Today’s consumers do not want more and better goods and services for a reasonable price. Rather, they increasingly expect companies to contribute to social welfare and the common good,” he said. (McKinsey 2021)
According to McKinsey, the COVID-19 crisis has shown that companies that commit to stakeholder capitalism perform much better than others because they invest in the long-term viability of the company.
At this year’s event, Schwab stated, “Now we must ‘walk the talk’ to establish a framework of metrics that allow everyone to see that a company is performing according to ESG [environmental, social, and governance] criteria.”
Alexander De Croo, prime minister of Belgium, explained why trust is essential, “Over the past years, all of us on the public side, on the private side, we’ve been talking so much about trust. This is a moment not to talk about trust but to show that we can be trustworthy,” he said. (McKinsey 2021)
With support from 140 CEO’s and collaboration with Deloitte, EY, KPMG and PwC, the World Economic Forum published "Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation", a set of core ESG (environmental, social and corporate governance) metrics and disclosures for companies, which includes four pillars – Governance, Planet, People and Prosperity.
Importantly for corporate affairs professionals, the “G” of ESG, governance, goes beyond simply following legal and regulatory frameworks, it must include setting the company purpose and the inclusion of integrating risk management and oversight, together with transparent reporting.
In summary, the key takeaways include:
- The time to rebuild trust and to make crucial choices is fast approaching as the need to reset priorities and the urgency to reform systems grow stronger around the world.
- 85% of all jobs in 2030 have not been invented yet - the current moment provides an opportunity for leaders in business, government, and public policy to focus common efforts on improving the access and delivery of reskilling and upskilling, motivating re-deployment and re-employment.
- The future calls for new skills and knowledge. We’re at a ‘tipping point’ in the momentum toward sustainability. The key to ensuring relevancy in the future, is embracing new skills, knowledge and technology that help us not only survive, but ideally thrive.
- Supporting the wellbeing of employees is no longer an advantage, but rather a requirement to ensure the long-term resilience and growth of global businesses and economies.
- Gender parity is at the heart of the recovery.
- We must ‘walk the talk’ to establish a framework of metrics that allow everyone to see that a company is performing according to ESG. This is a moment not to talk about trust but to show that we can be trustworthy.