The Weinstein Company declared bankruptcy. Fox News reported a special $50-million line item in its financial statements for settlement of claims. Fortune 500 companies are spending an average of $14 million a year on harassment-related costs. Many other businesses across North America are facing the steep cost of looming litigation and settlements for those who have been sexually harassed in the workplace.

For those who doubt the risks and hard costs attached to moral jeopardy, company balance sheets—and the impact of potential settlements on share price—tell a stark story. That said, it’s a story that does not begin to quantify the soft costs, such as brand and reputational damage, high rates of absenteeism and turnover, productivity loss and the long-term impact that employee mistrust has on morale.

More than ever before, there is public scrutiny of and pressure on management to ensure that the right policies and processes are in place to prevent sexual harassment and, where it does occur, to deal with it in a swift, transparent and decisive way. Business leaders must not only do the right thing, they must be seen doing it.

No such measures will be effective, however, unless they are based on research and as much information as can be gathered. To that end, Navigator has conducted a national online survey to establish baseline data for Canadian decision-makers.

Here are the key findings to this survey report:

1. When asked to assess their own understanding of sexual harassment in the workplace, 66 per cent of Canadians describe themselves as having a good understanding; only seven per cent describe themselves as having a poor understanding.
2. When asked, 82 per cent of Canadians describe the issue as a serious or very serious issue, with only 18 per cent believing it is not serious.
3. Notably, more women (88 per cent) than men (74 per cent) feel it is a serious or very serious issue.
4. A surprisingly high proportion of employed Canadians—two in five—feel that sexual harassment is a serious problem in their own workplace.
5. Approximately 24 per cent of Canadians report that they have experienced sexual harassment in the workplace.
6. Problematically, of those who report that they have been sexually harassed in the workplace, nearly two in five report that the sexual harassment stemmed from a person who had direct influence over their career.
7. Seventy-one per cent of Canadians feel that it has taken far too long for the problem of sexual harassment in the workplace to be taken seriously. When asked if they believe the pendulum had swung too far, 54 per cent agree, and only 18 per cent disagree.

“The one and only social responsibility of business is to increase profits.”
That assertion by American economist and Nobel laureate Milton Friedman framed decision-making for generations of CEOs. Fifty years later, as profitability and social responsibility have converged, Professor Friedman’s vintage theory is the height of corporate fashion—for a whole new set of reasons.

In 2018, social responsibility has become one of the cornerstones of business profitability. The once-narrow focus on shareholder returns has expanded to a broader community of stakeholders. Fairly or not, that stakeholder mindset comes with the full expectation of corporate access, accountability and consultation, as well as with a new frontier of acute corporate risk—moral jeopardy.

Articulating company values and ensuring they are reflected in policies and actions has become integral to long-term business strategy. After all, in an age of social media, misalignment with stakeholders can cause immediate—and lasting—public backlash.

That reality is reinforced by other external pressures.

As political fragmentation continues to compromise the authority of traditional government, private-sector leaders have increasingly been thrust into the breach. While most are motivated by the knowledge that uncertainty is bad for business, they are also responding to public demand for parity between financial and social capital.

That is why the CEOs of bluechip companies, as well as asset and pension fund managers, have recently taken public stands on everything from the environment and the sale of guns to racist violence and LGBTQ rights. Not only that, many have taken steps that would have horrified Milton Friedman at the urging of the investors who own corporate profits.

Larry Fink of BlackRock is a prime example of the new, morally attuned CEO.

The U.S. asset management firm, the world’s largest holder of global equities with a portfolio valued at $6.3 trillion (U.S.), is all about the pure purpose of bottom-line returns. But Fink is among those who understand that without the transparency derived from moral integrity, accountability and shared values, corporations are vulnerable.

So, in an open letter to international CEOs earlier this year, Fink served notice. He observed, “Many governments fail to prepare for the future, on issues ranging from retirement and infrastructure to automation and worker retraining. As a result, society increasingly is turning to the private sector and asking that companies respond to broader societal challenges.”

That same impetus is blurring the traditional definition of “activist investor.” Once derided for their singular focus on short-term returns, activists are also demanding that corporate management reflect broader social values with a view to safeguarding market share and avoiding nasty surprises. Such positions are all the more important at a time when widespread use of robots, pre-programmed algorithms and exchange traded funds (ETFs) have replaced votes with a new degree of investor passivity.

Prior to the emergence of moral jeopardy, corporate life was much simpler.

CEOs had a clear idea of success. In exchange for their reserved parking spots and stock options, they were expected to. deliver steady growth, share price appreciation, compliance with the law and other regulatory requirements.

As business became more global and more competitive, however, managing corporate reputation moved from the public relations department to the board room. To build business brand and foreign market share, it was deemed essential to be widely seen as trustworthy and reliable.

That new layer of scrutiny meant legal and reputational jeopardy started to run along two separate but parallel tracks. Legal and compliance issues were dealt with first, then came the assessment and remediation of the company’s reputation.

The internet, social media and a 24-hour news cycle abruptly changed all of that.

Suddenly, the urgency of containing reputational damage made it equal to legal jeopardy. As the community of self-identified stakeholders grew, so did the risk attached to any failure to respond quickly and decisively.

Just as legal and reputational risks achieved balance, moral jeopardy emerged as an urgent and complex issue in the board room and on stock exchanges. At a time of relative economic growth and historically high stock market valuations, the cost of clean corporate conscience is the cost of doing business. But as we’ve so often seen, recessions and market corrections, much like hangings, have a way of focusing the mind.

IF THERE IS ONE THING we have all learned through the remarkable events of the past several months, it’s the importance of social lenses. Inevitably, different people look at the same social situation and understand it in different ways.

This has created an environment where the threat of moral jeopardy hangs over individuals and organizations in every sector. The shift in values and expectations is playing out in everything from a heightened focus on sexual politics in the workplace to social media and privacy to corporate governance and reporting.

The nature of our work as communicators puts Navigator in the front lines when it comes to the adjustment required to cope with rapid societal change. To underscore the power of the social lens, we’ve attached a pair of 3D glasses to this edition of Perspectives. On every page, you will find an image or an icon that reinforces our editorial focus on the rise of moral jeopardy and
its growing impact.

That concept – and the overall design of Perspectives—showcases the creativity and talent
of Navigator’s in-house digital and design squad, Pinpoint.

We created Pinpoint to ensure Navigator’s clients have access to some of the best and brightest in the business when it comes to the all-important craft of multi-platform message delivery. In an age of social media and short attention spans, it’s essential to use powerful images—on everything from website to campaign collateral—to drive home the message.

We believe this edition Perspectives does just that. And
we hope you enjoy it.

THERE HAS NEVER been a better time to be Canadian.

Donald Trump’s presidency has rocked the world’s confidence in the United States. Brexit has left the United Kingdom in a state of limbo. There is no question that our world is shifting. Tumultuous political change and global risk is all around us. The most stable and respected democracies in the world have been shaken.

In a world filled with uncertainty, Canada, at least for the time being, appears to be an outlier.

Canada offers a welcoming business environment, one that makes it, according to Forbes Magazine, the second-best country in the G20 in which to do business. Over the past decade, Canada’s growth numbers lead the G7. It offers assured preferential access to over half the world’s output of goods and services. Low business tax costs, a competitive R&D environment, and a banking system the World Economic Forum believes to be the soundest in the world undoubtedly make Canada the best country in which to invest and innovate.

Our hospitals, universities and social services are modern and accessible.

It is indisputably cool to be Canadian. We are no longer known only for hockey, cheap beer and apologies. Instead, we are considered compassionate, collaborative, humorous, musical, stylish and pragmatic. Canadian ex-pats all over the world are proud of where they’re from.

Compare this with the situation with our neighbour to the south. The New York Times has said that Americans should be forgiven for looking northward with yearning. This is a first.

All of that said, we are not without our own challenges. In particular, Indigenous communities across this country are suffering. I am hopeful that the government and civil society at large will work to find positive solutions with Indigenous communities, to clear a path forward.

This issue of Perspectives looks at how business and other segments of society can take advantage of Canada’s new place on the world stage. We look at the evolution of our country’s brand, take stock of our regional differences, delve into how we are perceived internationally, and shed light on some of the opportunities we see on the horizon.

Remember: fads, trends and successes are transitory. We are not immune to global challenges, and our domestic circumstances could change in the blink of an eye. We do not know the time horizon on this period of success, but what we do know is that now is Canada’s time and, therefore, the time to take advantage of it is now.

 

French author Marcel Proust is famous for his gentle remembrance of things past, his eponymous character-revealing questionnaire… and his love of madeleine cookies.

GRAHAM FRASER is an award-winning political journalist and Canada’s longest-serving Commissioner of Official Languages (2006-2016).

What is your idea of perfect happiness?
Sitting in an Adirondack chair on a dock by a lake.

What is your greatest fear?
Missing a deadline. Over a decade after leaving journalism, I still have nightmares about it.

What is the trait you most deplore in yourself? 
Clumsiness.

What is the trait you most deplore in others?
Rudeness.

Which living person do you most admire?
My two sons, for their independence and courage.

What is your greatest extravagance?
Expensive coffee.

What is your current state of mind?
Extremely positive.

What do you consider the most overrated virtue?
Tidiness.

On what occasion do you lie?
When an excess of candour would be hurtful.

What is the quality you most like in a person?
A sense of humour.

Which words or phrases do you most overuse?
“On the other hand…”

What or who is the greatest love of your life?
My wife. Marrying her 49 years ago was the best decision I ever made.

When and where were you happiest?
Behind the wheel of a sailboat in the British Virgin Islands.

Which talent would you most like to have?
Hand-eye co-ordination.

If you could change one thing about yourself, what would it be?
I would have athletic ability.

What is your most treasured possession?
A Karsh portrait of my father.