For the past two decades, business leaders have focused exclusively on shareholder value. In a time of terrorism and corporate scandal, a much broader vision is imperative, as Yale School of Management Dean Jeffrey E. Garten explains.
The image of the CEO as Alexander the Great has faded; comparisons today are more likely to be made with Charles Ponzi. It may seem like odd timing, then, for an important thinker on corporate leadership and public policy to be issuing a call for CEOs to undertake a serious, committed engagement with a whole range of social, economic and environmental issues — topics that for years have been at the bottom of most top-executive agendas. But that is precisely what Jeffrey Garten, dean of the Yale School of Management, envisions in his latest book. Garten seeks a new kind of leadership from chief executives, yet one that hearkens back to a period in our history that also required people from all walks of life to come together in the pursuit of common goals.In this interview with SMR senior editor David A. Light, Garten speaks of the need to balance regulation and free markets, the historical precedents for business leadership on public-policy questions, and the urgent need for institutions that can manage the progress of globalization. He also discusses the important first step that CEOs must take before they can exert leadership on a bigger stage: restoring their reputations.