Has COVID-19 changed responsible business and leadership forever?
Will the leadership lessons learnt during the pandemic help with new challenges?
There’s no doubt that the pandemic changed the way organisations were led. In 2020, leaders found themselves having to respond to the crisis at pace, without data or previous experience to draw on, balancing the safety of frontline workers with the need to enable swathes of the UK workforce to work from home.
They also learned how to be visibly more empathetic and humble in their leadership approach, while technological innovation and magnified visibility made them more accessible within their organisations. Leaders were also more exposed to the social problems faced by their workforces and social justice issues such as Black Lives Matter.
However, by the middle of 2021, the context had changed. While the uncertainty continued, fractures, differences and divisions within society had resurfaced. The brief sense of national unity that had been fostered during the first few months of the pandemic started to decline, as the varied experience of COVID-19 – across sectors, generations, geographies and socio-economic groups – became painfully clear.
This article asks a simple question: has the impact of the COVID-19 pandemic changed the nature of responsible leadership for good?
To answer it, we need to consider three things: how we describe what it takes to be a responsible leader; the evidence for a new approach to responsible leadership; and the expectations of responsibility placed on leaders by their various stakeholders.
What does it take to be a responsible leader?
Much has been written over the last 30 years about what constitutes responsible leadership. A literature review uncovers the main characteristics, listed below (Maak and Pless, 2006; 2009), many of which held true during the pandemic:
- Being considerate of a wide range of stakeholder needs: this was very evident during the first year of COVID-19.
- Being values based and purpose driven: purpose and values have come to the fore as guiding principles for decision-making in uncharted territory.
- Aiming to create sustained social impact: we detected a genuine commitment to tackling diversity and inclusion on a sustained basis because of Black Lives Matter and a short-term commitment to mental health and wellbeing as a response to the aftershocks of the pandemic.
- Forging sustained, inclusive and caring relationships with a wide range of stakeholders: there was good intent on the part of leaders, but tensions became increasingly apparent when trying to address whose needs should triumph: the customer or the employee; the family or the colleague; the shareholder or the frontline worker.
What’s the evidence for a new approach to responsible leadership?
Three levels of responsible leadership became apparent during the pandemic:
- Individual: the personal integrity of leaders was a critical factor during COVID-19, with leaders under intense pressure. Many talked about needing to fall back onto their personal sense of right and wrong. They spoke of a new-found humility, born out of having to learn to listen to others.
- Organisational: in terms of role-modelling a response, many felt liberated. People also spoke of ‘taking off their armour’, implying that pre-COVID-19, they were operating in an organisational system that stifled their personal sense of right and wrong.
- Societal: leaders were heavily engaged with health services and government, trying to ascertain what their organisations could do to help society. Communicating far more with the outside world, albeit virtually, they were in the company of like-minded leaders, sharing a common purpose.
However, in 2021, the intense communication with external stakeholders and peers seemed to be decreasing as leaders turned their attention inwards. While ambitions for sustainability, mental health and wellbeing, diversity and inclusion, and community and levelling up remained, the response to community and broader economic or social agendas had changed. The need to keep the business afloat while transitioning out of lockdown meant that internal ‘responsible’ issues still received attention, but engagement with the community beyond the organisation’s boundary was often not as overt.
Stakeholder expectations of responsible leadership
The pandemic has changed the expectations of our various stakeholders, which influences how we now define responsible leadership. These include:
- impatience about the pace of change in areas of sustainability and diversity and inclusion: through COVID-19, people saw the extent of transformational change that can be achieved when necessary and are now questioning why the same pressure cannot be applied to other areas
- the call for greater justice and fairness, amplified through the discontent over post- COVID-19 pay rewards for frontline workers
- a glimpse of a less hierarchical form of organisation, a humbler approach to leadership, with more visibility, empathy and accessibility to senior teams
- exposure to serious social justice issues, including inequality, exclusion, poverty and levels of domestic abuse: leaders cannot now pretend they are unaware that we live in a deeply divided society
- changing mindsets and assumptions about working lives, personal priorities and family life: these blurred boundaries between the personal and the professional are now re-emerging, along with changing life goals.
Is this new approach sustainable going forward?
Many senior leaders impressed through their acceptance of broader societal and organisational responsibilities during COVID-19. This has raised stakeholder expectations of what these individuals can deliver on an ongoing basis.
There is every reason to believe that the leadership lessons from the pandemic should be applied in our present and future challenges. The war in Ukraine has created a situation which one CEO described as meaning: ‘Uncertainty is the new norm’. There is a need for responsible leadership to support fairness and justice, to mitigate public fear on geo-political levels and to address the social and economic fallout of the cost of living crisis.
Yet, despite the triumph of good stewardship during COVID-19, and the expanding list of ‘responsibilities’ that leaders now address, there are signs that many are ‘returning to normal’. Reporting on DAVOS 2022, the journalist Rana Foroohar reported that she came away feeling that the 0.1% was more out of touch with the state of the world than ever, concluding: ‘If the rich don’t give a bit more today, they may have to give a lot more tomorrow.’ (2022) Financial Times. 30 May.
As for levelling up income levels, the Financial Times reported on the same day: ‘UK CEO pay recovers to pre-COVID levels despite cost of living crisis’. It reports that Deloitte has found that the median employee to FTSE 100 CEO pay ratio was 1:81, compared with 1:59 in 2020 and 1:75 in 2019.
Maybe gold-plated responsible leadership was just for COVID-19 after all?
Read our Responsible business through crisis reports.
Professor Veronica Hope Hailey
Veronica Hope Hailey is a Fellow of the Academy of Social Sciences, Chartered Fellow of the CIPD and Emeritus Professor at the School of Management, University of Bath where she was also Dean and University Vice President for 7 years until 2020. She was named among the ‘UK’s Top 10 Most Influential HR Thinkers’ from 2012 to 2017. Veronica is also Associate Faculty at the Forward Institute
Joe is the Organisational Change, Research and Policy Coordinator at the Forward Institute. He articulates the Forward Institute's voice on issues in Responsible Leadership and supports the facilitation of cross sector research in the field. These initiatives are aimed at helping the leadership of legacy institutions create and sustain positive change for their employees, society and the planet.
Katie Jacobs is senior stakeholder lead at CIPD, where she runs the HR leaders’ network. She is also a business journalist specialising in the world of HR and previously edited HR magazine for a number of years.